Canada Revenue Agency

Canada Revenue Agency

March 05, 2008 14:26 ET

Canada Revenue Agency: Luxury Homebuilders Fined for Tax Evasion

TORONTO, ONTARIO--(Marketwire - March 5, 2008) - 1337526 Ontario Inc., and Tacona General Contracting, of Toronto, each pleaded guilty to one count of GST evasion today. They were fined $150,000 in the Ontario Court of Justice in Toronto. The fine is in addition to any taxes and interest owed, as well as any civil penalties that may be assessed by the CRA.

"Tax evasion takes money away from the services that benefit all Canadians," said William V. Baker, Commissioner of the Canada Revenue Agency (CRA). "The CRA takes action against those who try to avoid paying what they owe."

Both corporations are in the business of building luxury homes. The corporations' director, Mohammed Elbadawi, a Toronto architect, purchased old homes in affluent areas. The homes were demolished and rebuilt.

A Canada Revenue Agency (CRA) investigation revealed that 1337526 Ontario Inc. built and sold two homes in Toronto and one in Brampton. On the sale of these homes, 1337526 Ontario Inc. collected $30,303 GST in 2001 and 2002, but failed to remit the amount to the CRA. The investigation further revealed that Tacona General Contracting built and sold two homes in the Toronto area. On the sale of these homes, Tacona General Contracting collected $123,740 GST in 2001 but failed to remit the amount to the CRA.

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 www.cra-arc.gc.ca/convictions.

Contact Information

  • Canada Revenue Agency
    Peter Delis
    (416) 512-4135