During an investigation by Canada Revenue Agency, it was revealed that Faiz prepared false tax returns and false donation claims. During the years 2004 – 2008, he falsified documents on behalf of his 52 clients which understated their federal taxes by $575,971, thereby increasing their tax refunds.

The names of four charities on the falsified donation slips were City Chapel Ministries International, Destiny Ministries International Christian Mission, Pan African Canadian Multicultural Centre and Ave Development Foundation. They had their charity status revoked by CRA.

Canada Revenue Agency found that Khan also filed fraudulent tax returns of his own from 2004 – 2007 by not reporting income from his business and included false donation claims. He evaded a tax payment of $249,000 when he failed to report $984,594 to Canada Revenue Agency.

Mr. Hersey owned a company that sold insurance products and investment vehicles, Professional Insurance Management Inc.  He controlled a second firm, Global Export Consulting.  This second firm provided logistical support to Envision Global Charity, a charity operating in Cuba, which Hersey helped found.

In 2003 and 2004 the two companies produced income for Hersey in the amount of $187,395.  The income, not reported on tax returns, was used for living expenses, legal judgments and loans and was shared with Hersey’s wife.

Mr. Hersey was the financial advisor and tax preparer for two individuals.  These individuals invested $326,000 through Hersey and subsequently discovered that their investments were worthless.  False charitable donation receipts were provided by Hersey totaling over $43,000 under the name of Envision Global Charity, a charity which Hersey helped found.  Hersey included the false receipts when he prepared the tax returns for the two individuals.  Envision Global Charity’s charitable status was revoked effective August 18, 2007, after a CRA audit of the organization.

CRA penalties and/or prosecution can be avoided by filing outstanding tax returns and/or reporting previously undisclosed income under the Voluntary Disclosure Program.  The Program is open to all, provided that the CRA has not initiated any action or investigation against the taxpayer.

CRA and the RCMP investigation revealed that Mr. Ankomah the operator of Tax Help Centre prepared false personal income tax returns on behalf of 23 of his clients. Mr. Ankomah charged a fee and overstated charitable donation receipts from various charities on his clients’ income tax returns. During the 2003 to 2006 tax years, Ankomah issued $331,716 in fraudulent charitable donation receipts, and in doing so, helped his clients claim over $134,124 in non-refundable tax credits.

Taxpayers that claim false receipts are subject to serious consequences. Taxpayers should understand that the charity has to be registered with CRA and that the donation receipt should equal the funds that were paid to the charity. For example, if you gave $500.00 to a charity and the charity gave you a receipt for $5,000, then you are participating in a fraud in order to obtain non-refundable tax credits. The taxpayer should have known that they are participating in a fraud. The taxpayer will owe the taxes due plus penalties and interest. In addition, if convicted, the court may fine an additional 200% of the tax evaded and sentence them up to a five year jail term. If the taxpayer applies under the voluntary disclosure program before CRA commences and investigation, then penalties and prosecution will be waived.