Fraud charges stayed against Peter­bor­ough’s Shane Smith

The Peterborough Examiner - - Front Page - TODD VANDONK

Shane Smith’s fraud over $5,000 charges have been stayed.

The Peter­bor­ough man, along with five oth­ers, were charged by the RCMP fi­nan­cial crime team in 2014 for al­legedly steal­ing mil­lions, which cost the fed­eral govern­ment more than $200 mil­lion.

“My rep­u­ta­tion has been com­pletely de­stroyed,” Smith said af­ter Jus­tice Bon­nie Croll ruled to stay the charges on Thurs­day in Su­pe­rior Court of Jus­tice in Toronto.

Stayed charges can be brought back to court within one year of the day they are stayed, but it is un­com­mon.

“To be ac­cused of some­thing is one thing, but there is no in­no­cent un­til proven guilty,” Smith said.

“We were com­pletely de­stroyed in the me­dia, fi­nan­cially and per­son­ally when you are sup­pos­edly in­no­cent.”

Croll ruled the case had taken too long to come to trial and that Smith’s rights to trail within a rea­son­able pe­riod of time were vi­o­lated.

In 2016, the Supreme Court set a dead­line of 30 months for Su­pe­rior Court cases to be com­pleted from the time the charge is laid to the con­clu­sion of trial.

Smith was ar­rested al­most five years ago. He said it’s nice to have the weight lifted off his shoul­ders, but he knew he didn’t do any­thing il­le­gal.

“The RCMP made up their minds on some­thing and they worked back­wards to try and put pieces in place to make it look like their de­ci­sion was real,” Smith said.

“It is bit­ter­sweet be­cause I wanted to get them up and ex­am­ine them. I wanted to put the al­le­ga­tions and ev­i­dence in front of them and show what they did was wrong.”

Ac­cord­ing to a RCMP press re­lease in 2014, the in­ves­ti­ga­tion

be­gan in April 2012 when they re­ceived in­for­ma­tion that peo­ple were in­volved in a pos­si­ble tax­avoid­ance scheme.

The RCMP raided Smith’s Spills­bury Dr. home in 2013 as part of the in­ves­ti­ga­tion.

As a re­sult of their in­ves­ti­ga­tion, the RCMP de­ter­mined that since 2004, at least six in­di­vid­u­als en­ticed thou­sands of in­vestors to par­tic­i­pate in an al­leged il­le­gal tax shel­ter. In­vestors were led to be­lieve that they could le­git­i­mately pur­chase a com­pany’s busi­ness losses that could then be used to lower their tax­able in­come, the RCMP said.

“You have a case of CRA want­ing to put an end to this pro­gram, which they did, us­ing the RCMP as the tool to do it and fail­ing to do it be­cause there was no ev­i­dence of a crime at all,” Smith said. “The fact that the CRA doesn’t like it, doesn’t make it il­le­gal or im­moral.”

It was al­leged that many of these losses were fraud­u­lent be­cause the com­pa­nies in­volved with the ac­cused did not have agree­ments for their losses to be trans­ferred over to third par­ties. In other in­stances, the busi­nesses that pro­vided a large por­tion of the losses were con­trolled by the ac­cused. It is also al­leged that these losses were fab­ri­cated. The ac­cused re­ceived a per­cent­age of the al­legedly fic­ti­tious losses.

“What is un­eth­i­cal about putting money into a com­pany, tak­ing the loss from it and writ­ing it off ?” Smith said, adding the es­ti­mated 5,500 clients were in­volved in a joint ven­ture pro­gram.

“Joint ven­tures are not even in the Tax Act. The CRA has no way of stop­ping it from hap­pen­ing, even though they al­low mas­sive cor­po­ra­tions to do this ev­ery day.”

Ac­cord­ing to the RCMP, these busi­ness losses re­sulted in sub­stan­tial il­le­git­i­mate in­come tax re­fund cheques be­ing is­sued to these claimants off the backs of tax­pay­ers. Smith says there are no vic­tims here.

“Our 5,500 clients knew what we were do­ing was le­git­i­mate, le­gal and eth­i­cal. It was just be­cause Rev­enue Canada didn’t like it,” Smith said.

Since 2004, the risk of fi­nan­cial loss by the fed­eral govern­ment be­cause of this spe­cific fraud ex­ceeds $200 mil­lion, RCMP said.

The com­pa­nies used by Smith to run the al­leged scheme in­cluded: In­te­grated Busi­ness Con­cepts (IBC), Syn­ergy Group 2000, Ca­son Global Wealth As­so­ci­a­tion (CGWA) and IBCA 2009.

“Over five years they de­stroyed us and bankrupted us,” Smith said.

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