A Canadian man who helped set up more than 400 offshore corporate structures over a decade to help his wealthy clients with wealthy clients escaped paying billions of dollars in taxes, the CBC reports. Terry Donaldichuk, 52, has been sentenced to 21 months in prison. The names of his alleged clients have not been made public, but the CBC says they are all “wealthy Canadians with offshore accounts or shares holdings,” according to court documents and an unnamed source within the Canadian Revenue Agency.
Last week, Donaldichuk admitted to cheating the government out of $32 million in taxes. He also faces a lifetime ban from ever working in the tax administration industry. The revenue agency told the CBC that it has “turned a blind eye to the problem.” “You look at this and say why do we have to go through a whole trial and a tax enforcement lawyer here to fight this thing, we should just close the government off immediately and just throw it out the window,” Canada Revenue Agency prosecutor Edward Guy told the CBC. “There’s no point. That would be very, very unpopular with the population right now.”
Donaldichuk initially went to the Canada Revenue Agency with his suspicions that some of his clients might be hiding money offshore, but he was met with skepticism from the tax office. He is said to have described his investigation as “just a hobby,” and Canada Revenue Agency told the CBC that he initially exaggerated the activity of his investigation to support the charges. Donaldichuk was eventually placed on a special tax task force.
When he pleaded guilty in September, Donaldichuk said he entered into the scheme with “no specific intention to evade any tax.” He also took responsibility for “failing to plan and to anticipate” his investigation in 2007 and 2008, but he denied deliberately using elaborate tax avoidance schemes to evade Canadian taxes.