Toronto resident sentenced to five years in prison for GST/HST fraud
Toronto, Ontario, November 17, 2017 – The Canada Revenue Agency (CRA) announced that Alexander Wiafe of Toronto, Ontario was sentenced on November 8, 2017 to five years in prison and, in lieu of a forfeiture order, was fined $96,000. If the fine remains unpaid after five years from his release from custody, Wiafe may also face an additional 18 months of incarceration. Wiafe had previously pleaded guilty on August 8, 2017, in the Ontario Court of Justice in Toronto, to one count of fraud over $5,000 under the Criminal Code.
A CRA investigation revealed that Wiafe, as director and sole shareholder of Wiafco Industries Ltd. (Wiafco), filed eight quarterly Goods and Services Tax/Harmonized Sales Tax (GST/HST) returns for the filing periods from March 13, 2013 to December 31, 2014 claiming refunds for purchases that were either fictitious or not incurred by the company. By filing his fraudulent returns, Wiafe claimed a total of $997,842 in GST/HST refunds to which he was not entitled, and received two refund payments totaling $106,057 which he used both for personal expenditures and also to further the fraud.
Although Wiafco was purportedly in the business of importing and exporting used clothing, detailed analysis of its records and inspection of its business premises did not reveal any legitimate commercial activity or source of funds. In fact, Wiafco’s invoices and banking records were falsified, and Wiafe paid for leasing Wiafco’s business premises and equipment with the refunds he received from filing his first two fraudulent GST/HST returns.
All case-specific information above was obtained from the court records.
Tax cheating is a crime. Falsification of records and claims, wilfully not reporting income, or inflating expenses can lead to criminal charges, prosecution, jail time, and a criminal record. In 2016-2017, of the 37 convictions, 24 taxpayers were sent to jail for tax evasion for a total of 607 months.
If you have made an omission in your dealings with the CRA, made a tax mistake or left out details about income on your tax return, the Agency may give you a second chance to correct your tax affairs and avoid criminal prosecution. The Voluntary Disclosures Program (VDP) may give you the opportunity to come forward, make things right, and have peace of mind. Disclosures that are made before the CRA launches an enforcement action such as an audit or criminal investigation may only result in you having to pay taxes owed plus interest. That being said, the VDP is currently under review. Changes will be announced in the Fall of 2017. More information on the VDP can be found on the CRA's website at www.canada.ca/taxes-voluntary-disclosures.
Further information on convictions can be found in the CRA Newsroom at canada.ca/cra-convictions.
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