Opposition blasts alleged $500K COVID aid fraud
OTTAWA — Opposition parties say they are troubled that the Canada Revenue Agency paid nearly $500,000 in COVID-19 rent subsidies to a numbered company that claimed to have leased four properties that landlords say it never actually rented.
“For months, Conservatives called on the Trudeau government to ensure necessary aid programs had safeguards to prevent this exact type of fraud. Canadian taxpayers deserve to know how much Liberal incompetence has cost them through fraudulent COVID-19 benefit claims,” Conservative MP Jake Stewart said in a statement.
He added that National Revenue Minister Diane Lebouthillier and the CRA “need to get to the bottom of the extent of this fraud, and give Canadians the answers they deserve.”
NDP national revenue critic Niki Ashton echoed similar concerns about perceived “loopholes” in COVID-19 aid programs and said her party would pressure the Liberals for answers.
“These allegations of fraud are troubling and a reminder that the aid programs created by the Liberals contain loopholes that have enriched the wealthy. The Liberals pretended to close these loopholes, but more examples are piling up of large, profitable companies taking advantage of the aid while increasing dividends to shareholders,” Ashton said in a statement.
On Thursday, National Post revealed that the CRA is clawing back $482,160.97 worth of Canada Emergency Rent Subsidy (CERS) sent to a numbered company despite it never having filed corporate income tax, payroll remittance, or employee records to the CRA.
In court records, the CRA said the company and its sole director, Anthony Tzoumis, applied for the CERS in December to help cover six months of rent on four different leased commercial properties. But after the aid cheques were flagged as suspicious by Scotiabank, the CRA looked into the company only to discover that none of the four leases seemed legitimate.
In court documents, the CRA says all four of the company's alleged landlords said they had never rented to Tzoumis and the numbered company. Furthermore, RBC told the CRA that it had no records of the bank account Tzoumis claimed he used to pay his four leases.
On Wednesday, Tzoumis told the National Post he'd sold the numbered company in January. He also confirmed that he had applied for CERS “before that” but accused CRA of making the mistake of sending the company the funds requested.
Tax lawyer James Rhodes said he was “shocked” that the agency agreed to pay out half a million dollars to a numbered company for which it basically had no records at all.
According to Joseph Devaney, director at accounting information website Video Tax News, this case is just the first of many as the CRA now faces the task of recouping money from illegitimate COVID-19 aid claims from programs designed to get money out the door quickly.
“CRA did a reasonable job of balancing expediency against verification, but now that things are opening up, they've got to deal with the messy consequences of lower quality and fraudulent claims” he said.
CRA declined to comment on this specific case, citing legal confidentiality obligations.