Surrey lawyer gets house arrest for tax evasion
Failed to report $1.28M of taxable income related to legal services for real estate transactions
A Surrey lawyer has been sentenced to eight months of house arrest for tax evasion for not reporting $1.28 million of taxable income related to real estate transactions, according to the Canada Revenue Agency.
Baldev Singh Ghag was sentenced on Jan. 10 after pleading guilty to one count of tax evasion. The CRA says he failed to report money he earned providing legal services for real estate transactions between 2005 and 2008. He must also pay a fine of $418,865.
In a news release, the agency said Ghag was the principal of two corporations, Baldev S. Ghag Law Corp. and Ferengi Trading Corp. He provided real estate legal services through his law corporation and did real estate lending through Ferengi Trading.
Ghag maintained and controlled the finances for both corporations, but the CRA says an investigation found he “intermingled the banking between his corporate and personal accounts,” resulting in large amounts of money ending up in his personal accounts that he did not report as taxable income.
Reached by telephone at his law office, Ghag said he made an error in filing his taxes and is now trying to make things right. He said he co-operated fully with investigators and pleaded guilty “as early as I could.”
In May 2018, CRA reported it had found nearly $600 million in unpaid taxes in the real estate sector in British Columbia and Ontario over the past three years.
The federal agency began examining real estate transactions more closely starting in 2015 and says there continue to be “compliance risks” in real estate transactions in the high-priced Vancouver and Toronto markets.
B.C. civil court documents for a separate and unrelated case show that Ghag is in the business of private mortgage lending.
In court documents, two people claim they signed loan documents drawn up by Ghag in 2012 but didn’t understand the loan was a mortgage against their home and that they were the principal borrowers.
In a response, Ghag said he fully explained the terms and conditions of the mortgage to the borrowers, who indicated they understood.
None of the allegations has been proven in court, and a trial is set for June. The Canada Revenue Agency says there are “compliance risks” in the high-priced Vancouver and Toronto real estate markets.