MONTREAL – After four years of investigations and police raids, several former federal tax officials at the Canada Revenue Agency are facing fraud and corruption charges over alleged extortion attempts.
Three ex-employees of the Canada Revenue Agency are accused of extorting payment from restaurant owners in exchange for lower income-tax assessments.
The agency’s Montreal offices have been under intense scrutiny since 2008, after the office and the RCMP began investigating the conduct of a handful of CRA employees.
Other employees have been fired or suspended in recent years and questions have been raised in news reports about links between some officials and players in Quebec’s construction industry.
These mark the first arrests.
An RCMP spokesman said the three Montreal-area men, arrested Tuesday, were expected to appear in court on June 11. The three are Francesco Fazio, 55, and Elias Kawkab, 50, of Montreal, and Luigi Falcone, 50, of nearby Laval, Que. Fazio and Falcone were both tax auditors while Kawkab was a team leader.
They face a dozen charges between them – including extortion, bribery of officers, fraud against the government and breach of trust.
The investigation, dubbed Project Coche (“Project Checkmark,” in English) started in 2008 after a Canada Revenue Agency complaint to the RCMP.
“After the CRA investigation, they brought us in to look at these three individuals in particular,” said Cpl. Luc Thibault of the RCMP. “The investigation started in 2009.”
All three face charges that stem from a similar alleged scheme.
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Fazio is accused of offering a lower tax bill to a Montreal restaurant owner in exchange for $90,000 between July and October of 2005. He was allegedly rebuffed by the restaurant owner.
Kawkab is accused of receiving $100,000 in bribes from a Montreal restaurant owner between June 2007 and August 2008 in exchange for allegedly erasing unreported income.
The RCMP probe into Falcone allegedly revealed that he offered a lower, falsified tax notice – before even conducting an audit – to an eatery owner in exchange for $50,000. The owner allegedly refused to pay the bribe.
None of the allegations have been proven in court.
None of the three men work for the Canada Revenue Agency anymore. Kawkab amd Fazio were let go in 2011 while Falcone resigned in 2009.
Thibault notes that the investigation is ongoing and other charges are possible.
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