Canada Revenue Agency

Canada Revenue Agency

March 02, 2010 16:34 ET

Canada Revenue Agency: Two More Years of Jail for Toronto Tax Preparer

TORONTO, ONTARIO--(Marketwire - March 2, 2010) - Paul Leo-Mensah, of Etobicoke, was sentenced to an additional two years in jail as a result of an appeal heard in the Court of Appeal for Ontario, in Toronto, on February 3, 2010. On April 21, 2009, he pleaded guilty to one count of fraud over $5,000 and two counts of tax evasion. On May 28, 2009, he was sentenced to time served plus one day, and fined $145,760. Leo-Mensah was given credit on a two-for-one basis by the sentencing judge, due to pre-trial custody, and served 11 months in jail. The Canada Revenue Agency (CRA) appealed, arguing that the original sentence was too lenient given the seriousness of Leo-Mensah's offences.

In sentencing Leo-Mensah to two years of additional jail time, the Ontario Court of Appeal stated that "the magnitude of the fraud, the breach of trust, blatant abuse of the charitable donation scheme under the Income Tax Act and Mr. Leo-Mensah's pivotal role in the scam, the sentence imposed falls below the range that has been established by this court for large scale fraud cases." The Appeals judge further stated that, while the Court is normally reluctant to re-incarcerate an offender once a sentence has been served, "reincarceration is warranted where the original sentence was so far below that which was required that the interests of justice require the court intervene".

A CRA investigation had previously revealed that Leo-Mensah, a tax preparer in Etobicoke, provided his clients with false charitable donation receipts totaling $11,699,104 from a number of churches and similar charitable organizations. He prepared and falsified 801 income tax returns for approximately 300 different individuals. In doing so, these individuals understated their federal tax payable. As a result, the CRA issued refunds totaling $3,275,749 based on the false figures. Leo-Mensah collected over $972,630 in fees from his clients once the refunds were received, and paid a portion of his fees to associates, including officials of the charitable organizations. Leo-Mensah himself retained approximately $561,693 that he did not declare as income in 2004 and 2005.

"Tax evasion costs all of us," said Carl Gomes, Assistant Director, Enforcement Division at the Toronto West Tax Services Office of the Canada Revenue Agency. "The job of our investigators and auditors is to make sure that all Canadians pay the tax they owe so that those who do pay their fair share are not burdened by those that do not. The CRA actively works to detect, deter and correct wilful non-compliance. "

Schemes involving false or inflated charitable donation receipts and tax preparer fraud are both being investigated as part of Project Trident, a CRA-wide enforcement project that helps protect the tax base by prosecuting key players in fraudulent tax schemes and reassessing related tax returns. Project Trident targets three types of fraud: identity theft, charities-related fraud, and tax preparer fraud. For more information, visit

Taxpayers who receive a refund to which they are not entitled to will have their income tax return adjusted. They will then have to pay back all outstanding amounts. The CRA is continuing its efforts to recover overpayments made to taxpayers in this particular case.

Individuals convicted of Criminal Code offences of fraud or uttering forged documents face a maximum jail term of 14 years. When individuals or corporations are convicted of tax evasion, they have to pay the full amount of tax owing, plus interest, and any penalties the CRA assesses. In cases of gross negligence, the Income Tax Act and Excise Tax Act allow the CRA to assess a penalty of up to 50% of the unpaid tax or the improperly claimed benefit. In addition, the court may, on summary conviction, fine them 50% to 200% of the tax evaded, and sentence them to a jail term of up to two years.

The information in this news release was obtained from the court records. 

Further information on convictions can also be found in the Media Room on the CRA website at

Contact Information

  • Canada Revenue Agency
    Andy Meredith
    Communications Manager
    (905) 615-2838