Canada Revenue Agency

Canada Revenue Agency

September 15, 2010 14:14 ET

Canada Revenue Agency: Prison "Tax Guy" Sentenced to Two and a Half Years in Tax Fraud Scheme

TORONTO, ONTARIO--(Marketwire - Sept. 15, 2010) - On September 1 4, 2010, Michael Bannon, currently an inmate in the Toronto Jail, was sentenced to 30 months in jail after pleading guilty in the Ontario Court of Justice in Toronto on August 16, 2010, to two counts of fraud over $5,000. Bannon participated in a tax scheme that involved the preparation and filing of false tax returns claiming a total of $1.8 million in fraudulent income tax and GST refunds.

A joint investigation by the Canada Revenue Agency (CRA) and other government bodies revealed that while incarcerated Bannon assisted in the preparation of 1,431 fraudulent personal income tax returns for 178 prison inmates, for the years 1999 to 2007. In doing so, Bannon claimed $704,684 in income tax refunds. Bannon also filed 725 fraudulent GST returns in the names of 295 individuals, the vast majority of whom were prison inmates, claiming refunds of $1.1 million. No income tax refunds were issued by the CRA. Of the $1.1 million in GST refunds claimed, only $90,217 was issued by the CRA. Cheques totalling $58,217 were cashed.

Bannon, who was known as the "tax guy" in prison, advised other inmates that he could prepare and file tax returns on their behalf. He obtained personal information from inmates such as name, social insurance number, date of birth, and addresses, for the purpose of preparing the inmates' personal tax returns. Bannon usually received prisoner canteen goods as payment for completing the tax returns. Unbeknown to the inmates, Bannon changed the address information on the returns filed to post office boxes that were under his control.

Individuals who have not filed returns for previous years, or who have not reported all of their income, can still voluntarily correct their tax affairs. They will not be penalized or prosecuted if they make a valid disclosure before they become aware of any compliance action being initiated by the Canada Revenue Agency (CRA) against them. These individuals may only have to pay the taxes owing, plus interest. More information on the Voluntary Disclosures Program (VDP) can be found on the CRA's website at www.cra.gc.ca/voluntarydisclosures.

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.gc.ca/convictions.

Contact Information

  • Andy Meredith
    Manager, Communications
    416-952-8106