NEW FOCUS ON FRAUD
While much attention in the fight against corruption has been focused on the Charbonneau Commission, Revenue Quebec has quietly increased the amount of time and money it spends investigating fraud. Monique Muise reports the investment is paying off: For e
Follow the money. It’s an oft-repeated expression among both professional and amateur investigators; the theory being that the best way to get to the bottom of any scheme or conspiracy is to figure out who was paying whom — and who those people paid in turn.
In Quebec, no one knows how to follow the money better than the provincial revenue agency — which may explain why Revenue Quebec suddenly seems to be popping up everywhere as police forces, specialized anti-corruption bodies and public inquiries attempt to expose and eliminate dirty backroom deals in the province’s construction industry.
Revenue Quebec employees were there in April, for instance, when Quebec’s permanent anti-corruption unit (UPAC) descended on the offices of Frank Catania & Associates in Brossard. They were also there on Wednesday morning, when the Sûreté du Québec fanned out across the province and searched the homes of several unnamed construction bosses, along with the offices of a handful of engineering firms and local suppliers in Montreal, Laval, Quebec City, Beauce and Saguenay. SQ Sgt. Ron McInnis said that the pre-dawn searches, which involved 140 officers and took several hours to complete, were just another phase of an ongoing investigation into billing irregularities that cheat the provincial revenue department of taxes.
So crucial is Revenue Quebec’s role in many these types of probes that UPAC actually employs 15 people from the agency full-time in its offices, explained the unit’s official spokeswoman, Anne-Frédérick Laurence.
“They contribute to our investigations because they have additional information concerning fiscal matters,” she said.
According to Laurence, UPAC was not involved in Wednesday morning’s crackdown, which was part of an investigation being organized solely by the SQ and Revenue Quebec. She would not confirm if UPAC was notified in advance of the raids.
The revenue agency’s interest in the construction sector is by no means a simple by-product of the work being done by police. The agency has, within its own offices, undertaken a major reorganization over the past three years, devoting more resources than ever before to inspecting the financial records of construction companies and related businesses.
“Since 2009-10 … the number of interventions (in the construction sector) has grown by 37 per cent,” said a Revenue Quebec spokesman, Stéphane Dion.
“In 2009-10, we’re talking about 32,211 interventions. In 2011-12, it was 44,224 interventions.”
Revenue Quebec has also been beefing up its workforce, and in 2009 unveiled an ambitious plan to add 1,085 employees to its ranks by the end of 2014. It is currently about two-thirds of the way there.
According to Dion, the reason for the changes is simple: His office, like UPAC and the SQ, is following the money.
“Construction is the main sector for fiscal fraud in Quebec,” he said. “We estimate that, globally, we lose $3.5 billion each year through all sectors, but in the construction sector alone — residential or non-residential — it’s $1.5 billion.”
The new set of priorities appears to be producing significant results. Since 2009, the total amount of money recuperated by the agency and funnelled into provincial coffers has jumped by 74 per cent said, Dion said, a trend that is expected to continue in 2013.
“An interesting statistic is that for every dollar that Revenue Quebec invests in fighting tax evasion (or false billing), we recover nearly $11,” he added.
There are limits to the agency’s ability to co-operate with other bodies, however. Revenue Quebec by law cannot open its files to other investigations except in particular cases where police are looking for specific information. In 2011, UPAC head Robert Lafrenière said his unit is fully aware of those restrictions.
“They are not a buffet,” he quipped.