PacNet founder fights Victoria over $2.5m collection bid
The founder of PacNet Services Ltd. is fighting an attempt to collect over $2.5 million from her personally, money the province says the high-profile company owes for tax rebates it received between 2012 and 2015, but for which it no longer qualifies.
Rosanne Day is asking the B.C. Supreme Court to reverse the provincial assessment and to declare she is not personally liable for any alleged failure by PacNet to send back the money, according to documents
filed in court.
Attorney-General David Eby recently cited a lawsuit against PacNet by the province’s civil forfeiture office while discussing concerns about large-scale money laundering in the real estate market. That lawsuit alleges the company was involved in “predatory mail-fraud schemes” and used illicit funds to buy properties in Vancouver, West Vancouver, Gibsons, Keats Island and Delta.
The tax fight between Day and the province involves the Finance Ministry’s international
business activity program. It provided tax incentives to businesses in B.C. but conducting business internationally, including PacNet. The B.C. NDP cancelled the Liberal program in 2017.
At issue is whether or not PacNet should have been considered ineligible for the program between 2012 and 2015 because of sanctions against it by the U.S. Treasury Department’s office of foreign asset control.
The U.S. alleged PacNet was a “significant transnational criminal organization” and basically blocked the company
from doing financial transactions with Americans or using property in the U.S.
The U.S. Treasury dropped PacNet from its sanction list in November 2017, according to Day’s application to the
courts. It also said PacNet sent the province “53 pages of submissions” arguing why it should not have been deemed as “unfit to be registered” with B.C.’s international business program.
In February 2018, the B.C. program cancelled PacNet’s registration and told the company it was unfit, “had been so since January 1, 2012,” and was not eligible for any rebates from that date.
PacNet said it appealed the cancellation of its registration in May. But PacNet said it has been advised that it is likely to be months before the appeal
is considered, its application said.
“At all material times, Ms. Day ensured that any tax liability by PacNet was duly paid. The amount at issue arises from a retrospective determination ... which is in any event the subject of an appeal that has not yet been determined. There is no authority for the proposition a director is personally liable, despite all due diligence, for a retrospective determination and imposition of tax liability in these circumstances.”