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Toronto Man Earns 5 Years in Prison for Claiming $1M in Fraudulent Tax Refunds

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A man from Toronto was recently sentenced to a 5-year prison stay for claiming about $1 million in fake tax refunds.

According from the CRA, Toronto resident Alexander Wiafe filed 8 quarterly GST/HST returns and claimed refunds for expenses that were fraudulent or fictitious. He fraudulently claimed almost $1 million worth of Goods and Services Tax and Harmonized Sales Tax refunds for about a year.

The CRA Speaks

The Canadian Tax Revenue Agency says that Wiafe was also fined $96,000 plus an additional 18 months in custody if he fails to pay the fine within 5 years of his release aside from being convicted of fraud over $5,000.

Alexander Wiafe is the sole shareholder and the director of Wiafco Industries Ltd. He filed 8 separate quarterly GST/HST returns between the 13 of March 2013 and 31st of December 2014. He claimed that they were for purchases for Wiafco but those purchases were proven to be not incurred by the company and are fictitious.

Engineered Fraud

Wiafe made a claim of $997,842 in refunds and was able to receive 2 payments amounting to a total of $106,057. He used both those to pay for his personal expenses and the rest to help himself continue the fraud.

Wiafco Industries Ltd is in the business of importing and exporting used clothing, or so they claimed. An inspection of the business? premises did not support this claim. The inspection did not reveal any legitimate commercial activity that could be source of income in the company?s place of business.

The CRA revealed that Wiafco?s banking records and invoices were falsified and that the money used for the lease of the business? premises plus the funds used for equipment was from the 2 initial fraudulent claims that Wiafe was able to pull off.

Tax Return Fraud

There are various types of tax return fraud in Canada but the majority are via malicious email links wherein the target is sent a fraudulent email telling them that they are qualified to receive a tax refund. The email would ask targets to provide personal details or ask them to log-in to a fake website via a link in the email. Doing so will allow fraudsters to phish for information that they can use to commit more fraud. Wiafe?s method goes beyond that because he simply pretended to have a legitimate business and was able to fool the CRA.

Alexander Wiafe was eventually found out but this only means that there are certainly more like him who are defrauding CRA or could be trying to hatch a scheme to target you or your business. This is why it is very important to be informed about the different types of scams so you would know what to look out for same as it is equally important to report possible fraud to authorities so that they can be stopped.

Want the help of a private investigation team to expose fraud? Contact us at Haywood Hunt today!

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