Alberta home builder convicted for tax evasion over unreported income and real estate sales

The Canada Revenue Agency (CRA) announced today that Richard Paolini of Heritage Point, Alberta, was sentenced on August 15, 2025, in the Provincial Court of Alberta, to a conditional sentence order of 18 months, and was fined a total of $197,772.50. Paolini pleaded guilty to one count of tax evasion under the Income Tax Act and one count of tax evasion under the Excise Tax Act. 

A CRA investigation revealed that Paolini, as the sole director and shareholder of 1778390 Alberta Ltd., a residential construction business that operated as Inner City Homes, failed to report funds appropriated from the construction business for his personal use. It was found that he also failed to report earnings from rental income and capital gains from the sale of properties and investments. In total, Paolini failed to report $1,080,180.00 in taxable income on his personal tax returns, evading a total of $299,943.00 in federal income tax for the 2015, 2016, 2017, 2018, and 2020 tax years. 

The investigation also found that the construction business collected $113,369.00 in Goods and Services Tax (GST), which it failed to remit and report in the business’ 2017 corporate GST return.

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

The CRA is committed to fighting tax evasion, tax fraud, and other serious tax crimes. There are serious consequences to breaking the law. Cheating on your taxes affects the services and programs we all rely on to improve our quality of life. Combatting tax evasion, tax fraud, and other financial crimes is important for the protection of Canada’s tax base. While most Canadians obey the tax laws and pay their taxes, the CRA continues to maintain various programs to protect the integrity of the tax system. 

In addition to the court imposed fines and/or jail sentences, convicted taxpayers have to pay the full amount of tax owing, plus related interest and any penalties assessed by the CRA.  

The CRA is dedicated to maintaining the integrity of Canada’s tax system, thereby contributing to the social and economic well-being of Canadians. The CRA continues to aggressively pursue tax evasion, and false claims with all the tools available to it. The CRA works to make sure that individuals and businesses report all income earned and only claim benefits to which they are entitled, so that important benefit programs can be administered to those who need them. Any individual or business who underreports income, or claims losses or benefits to which they are not entitled 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

Reporting suspected tax or benefit cheating in Canada

Voluntary Disclosures Program

Contacts

Media Relations
Canada Revenue Agency
613-948-8366
cra-arc.media@cra-arc.gc.ca

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