Conditional jail sentence and fine for Springwater investment advisor guilty of tax fraud
November 27, 2019
Canada Revenue Agency
The Canada Revenue Agency (CRA) announced that on September 26, 2019, Joern Scholz (Scholz), also known as John Scholz, of Springwater, Ontario, was sentenced to a conditional jail sentence of two years less a day, including 12 months of house arrest, curfew for the remainder of the sentence, and to 200 hours of community service. He also received a fine of $445,789, representing 100% of the amount of GST/HST evaded. Scholz was found guilty by a jury on April 13, 2019, in the Hamilton Court House of one count of fraud over $5,000 under the Criminal Code for the evasion of federal income tax and goods and services tax / harmonized sales tax (GST/HST).
A CRA investigation revealed that Scholz operated an investment counselling business, and did not report any of the commission fees received from his clients on his individual tax returns for the taxation years 2011 to 2013 inclusive. By failing to report taxable income totalling $2,149,730 for these years, Scholz evaded a total of $605,355 in federal income tax. Scholz also did not file GST/HST returns for the periods ending in 2011 to 2015 inclusive, thereby evading the remittance of GST/HST totalling $445,789.
All case-specific information above was obtained from the court records.
The CRA would like to acknowledge the significant contribution of the Ontario Securities Commission to this investigation.
Under the income tax and excise tax laws, being convicted of tax evasion can include fines ranging from 50% to 200% of the evaded taxes and up to five years in jail. Being convicted of tax fraud under section 380 of the Criminal Code carries a sentence of up to 14 years in jail.
The Voluntary Disclosures Program (VDP) gives you a chance to correct inaccurate or incomplete information, or disclose information not previously reported in a tax return you previously filed or to file a return that you should have filed. If you file a VDP application and it is accepted by the CRA, you will have to pay the taxes owing. However, you will also be eligible for relief from prosecution and, in some cases, from penalties and some of the interest that you would otherwise be required to pay. For more information, go to Canada.ca/taxes-voluntary-disclosures.
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Paul N Murphy
Senior Communications Advisor
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