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CRA raid from Panama Papers targets oil businessman


May 4, 2018  


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The first glimpse of the Canada Revenue Agency crackdown on Canadians using offshore havens to evade taxes has been revealed through documents filed in a Calgary courthouse.

According to the Toronto Star, the 40-page “information to obtain search warrant” — made available to the public Wednesday — led to Valentine’s Day raids in Vancouver, Calgary and Richmond Hill on a Canadian oil businessman.

The raids come two years after the release of the Panama Papers, which leaked 11.7 million documents from the offshore law firm Mossack Fonseca. A collaboration of hundreds of journalists, working through the International Consortium of Investigative Journalists, published thousands of reports revealing the inner workings of the shady world of tax havens, which cost government coffers billions of dollars each year.

One of those raids took place at 2703 Willoughby Rd. in West Vancouver, a sprawling $4.6-million mansion with a swimming pool overlooking English Bay where Chinese-Canadian businessman Wentao Yang lived with his wife Rong Catherine Lu.

CRA investigators allege Yang evaded more than $850,000 in income tax and HST in 2016.

No charges have been laid and the CRA allegations have not been proven in a court of law.

In response to an interview request from the Toronto Star Thursday, Yang sent an email statement: “As a Canadian and a member of the community, I take these allegations very seriously and intend to address them in the fullness of time.”

The CRA documents allege Yang committed three offences: “acquiescing in the making of false or deceptive statements” on his T1 tax form; “wilfully evading the payment of taxes” in 2016; “wilfully evading remittance” of GST/HST.

 

According to the CRA allegations, Yang purchased oil and gas companies in Canada “using capital pooled through his investor contacts in China.”

The CRA zeroed in on the purchase of Calgary-based Long Run Exploration Ltd. by Yang’s company Calgary Sinoenergy Oil Investment Corp. Investigators allege that Yang was paid more than $2.6 million in “consulting fees” that he did not declare on his tax return.

Besides his West Vancouver mansion, the CRA also raided his $1.13-million house in Calgary and his accountant’s office in Richmond Hill, seeking banking records, cheques, mortgage documents, contracts and business documents, according to the search warrant request. The CRA also asked to seize computers, hard drives and SIM cards.

 

Yang’s company in the BVI, Sinoenergy Oil Investment, made eight electronic transfers during the month of June 2016 for $305 million to his company in Calgary, Calgary Sinoenergy Oil Investment Corp, the documents allege. The Calgary company then transferred $11.5 million to a Hong Kong bank account controlled by Marquee Financial Services Inc. — a Cayman Islands-based company with a defunct website and no other presence — which then paid out $2.6 million to Yang and Lu in Canada.

The couple owned a house in Markham, which they sold for $1.76 million in 2016.

 

Another oil company Yang is affiliated with, Sequoia Resources Corp, declared bankruptcy in March with debts of over $21.3 million, according to bankruptcy documents.

News reports at the time stated the company owned 2,300 wells, almost 200 facilities and nearly 700 pipeline segments in Alberta, and the bankruptcy might result in almost 4,000 orphaned wells that the government would have to pay to clean up.

(Toronto Star)

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