Brampton tax preparer sentenced for fraud

The Canada Revenue Agency (CRA) announced that Aurelius Carlton Branch of Brampton, Ontario, was sentenced on February 27, 2020 in the Ontario Court of Justice in Newmarket to four and a half years in jail, and to fines totalling $394,772. Branch pleaded guilty on November 21, 2019 to two counts of fraud under the Criminal Code of Canada.

A 28-month CRA investigation revealed that Branch and his partner, Lawrence Watts, operated Fiscal Arbitrators, a Canada-wide tax preparation firm that promoted a tax protester scheme based on a fraudulent concept of a “created person,” leading clients to believe they could legally file tax returns claiming large false business losses, even though no such businesses existed. The fictitious losses enabled 241 clients to receive or attempt to receive approximately $10 million in federal tax refunds. Branch, a former CRA employee from 1976 to 1980, knew that the scheme was fraudulent, and used his knowledge of the Income Tax Act and of CRA operations to assist his clients with obtaining unwarranted refunds.

Branch also failed to file his individual income tax returns for 2009 and 2010 and failed to report $926,213 of business income he derived from Fiscal Arbitrators, resulting in the evasion of $245,643 of federal income tax.

Criminal charges were laid against Branch and Watts on November 27, 2012. Watts was tried and ultimately convicted on October 22, 2015, and subsequently sentenced to six years of incarceration and a fine. Since Branch could not be located, a Canada-wide arrest warrant was issued on January 29, 2013, and Interpol published a “Red Notice” on April 12, 2013, identifying Branch as wanted for prosecution in Canada. In co-operation with Costa Rican authorities, Branch was arrested on September 21, 2017 and was extradited to Canada on February 26, 2019 with the assistance of the Royal Canadian Mounted Police.

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

Willfully failing to follow tax laws could result in serious consequences, including reassessments, the imposition of civil penalties and criminal tax investigations and prosecutions resulting in the imposition of court fines and jail time. Under the income tax and excise tax laws, persons convicted of tax evasion will face fines ranging from 50% to 200% of the evaded taxes and up to five years imprisonment. If convicted of fraud under Section 380 of the Criminal Code, an individual can face up to 14 years in jail.

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Contact

Paul N Murphy
Senior Communications Advisor
416-952-8105