Enforcement Notification - Tax evasion - Halifax business owner sentenced to three years in jail and he and his companies fined over $600,000 for fraud and tax evasion

HALIFAX, NS, Aug. 6, 2021 /CNW/ - The Canada Revenue Agency (CRA) announced today that Mr. Ralston MacDonnell, of Halifax, Nova Scotia, was sentenced to 3 years in jail, and fined a total of $301,511.25. MacDonnell's three related corporations were fined a total of $301,516.25. On May 18, 2021, a Halifax Provincial Court judge found MacDonnell and three of his related companies guilty of seven counts of fraud and four counts of tax evasion. In addition to the court imposed fine, MacDonnell will also have to pay the full amount of tax owing, plus related interest and any penalties assessed by the CRA.

A CRA investigation revealed that MacDonnell operated an engineering firm in Halifax, Nova Scotia, that splintered into three related companies: MacDonnell Security Risk Management Ltd., MacDonnell Group of Canada Ltd., and the numbered company 3182552 Nova Scotia Limited. From 2009 to 2014, MacDonnell and his three companies collected Goods and Services Tax/Harmonized Sales Tax (GST/HST) and Payroll Source Deductions and systematically failed to remit them to the CRA. MacDonnell made several false and deceptive statements in dealings with the CRA, which included the evasion of requirements to pay and the withholding of information. MacDonnell also used cheques knowing that they were drawn from an account that had insufficient funds. During the same period, MacDonnell diverted corporate funds into personal bank accounts unknown to the CRA, to cover personal expenses, including three mortgages, a car lease and other personal spending.

During the period from January 1, 2009, to December 31, 2014, MacDonnell and his three companies defrauded the Government of Canada by collecting and failing to remit GST/HST and payroll source deductions totalling $961,700.55.

All case-specific information above was obtained from the court records.

Tax evasion is a crime. Falsifying records and claims, wilfully not reporting income, or inflating expenses can lead to criminal charges, prosecution, jail time, and a criminal record. From April 1, 2020, to March 31, 2021, there were 36 convictions, with 15 taxpayers sent to jail for a total of 26.2 years. These individuals were sentenced for wilfully evading payment amounts totalling $10,902,950 in tax.

The CRA remains dedicated to maintaining the integrity of Canada's tax system, as well as the social and economic well-being of Canadians during these unprecedented times. The CRA continues to aggressively pursue tax evasion and false claims with all tools available to them.

The CRA is continuously working towards making sure that individuals and businesses report income earned and eligible losses, and claim benefits to which they are entitled, so that important benefit programs can be administered to those who need them. As a result of COVID-19, we are seeing the increased importance of these benefits, and are working to make sure that they continue to be available to Canadians. Any individual or business who underreports income, or claims losses or benefits to which they are not entitled, including ineligible claims for COVID-19 benefits, may have to repay the benefit amounts and may be subject to other possible action.

The CRA has set up a free subscription service to help Canadians stay current on the CRA's enforcement efforts.

Associated Links

Leads Program 
Voluntary Disclosures Program

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SOURCE Canada Revenue Agency