CRA starts fraud probe into Winnipeg tax company
The Canada Revenue Agency has launched a fraud investigation into a Winnipeg company that boasts it has helped disabled clients and their families obtain millions of dollars in tax refunds, CBC News has learned.
The CRA raided the offices of J & J Canadian Grants Company in September 2010. According to the sworn information to obtain a search warrant, the company and a Winnipeg physician participated in a "scheme" that secured tax refunds for clients who weren't actually disabled.
The allegations are as yet unproven, but form the basis of the CRA’s legal application to search the premises of the company and the physician in order to gather evidence.
A break for the disabled
The Disability Tax Credit (DTC) is intended to give a financial break to taxpayers with severe and prolonged mental and/or physical impairments. If a disabled person has no taxable income, a family member may apply for the credit.
As part of the application process for the tax credit, the disabled person's medical professional must complete the medical application forms and certify impairment.
Once the taxpayer is deemed eligible and can prove the impairment has lasted for years, he or she can apply for the 10-year, retroactive refund.
On average, the maximum an adult with a DTC can be refunded is $15,000. Figures for dependent disabled children are higher.
The search warrant alleges that the company and its principals — John Lopes, 41, Joe Diogo, 41, and James Kussy, 49 — "did commit an offence … by making or participating in, assenting to or acquiescing in the making of false or deceptive statements in disability tax credit certificates prepared for clients" and which were filed with the Canada Revenue Agency between March 2009 and July 2010.
Diogo and Kussy are also alleged to have "wilfully" obtained tax credits for clients who were not entitled to them.
Kussy's lawyer, Scott Newman, told CBC News his client is innocent until proven otherwise and stressed that charges have not been laid.
"These investigations tend to be lengthy," he said. "Fraud cases are usually not easy. Charges would have been laid had it been something open and shut."
The CRA also raided two medical clinics associated with Winnipeg physician Dr. Clarita Vianzon, as well as her residence.
She is alleged to have made "false or deceptive statements" when signing medical forms which certified that the company's clients suffered from serious medical impairments. The search warrant alleges she charged $50 to sign forms, increasing the fee to $100 in April 2010.
Doctor-patient confidentiality
Vianzon is the mother-in-law of company co-owner John Lopes. The CRA alleges that "it appears the directors of J & J are working in concert with a medical practitioner" and that clients were routinely directed to visit Vianzon.
Contacted by CBC News, she referred all questions to her lawyer, Marty Minuk, citing doctor-patient confidentiality. The 72-year-old retired from active practice in November 2010.
According to the search warrant, at least 262 of the people who visited Vianzon have been issued refunds, valued in total at $2.8 million. Another 700 people have seen their DTC applications frozen by CRA while it investigates.
A client of J & J Canadian Grants Company, who will only be identified publicly as "Jenny," confirmed that she has received a tax refund amounting to almost $4,000. She told CBC News that she was sent to Vianzon by J & J Canadian Grants. Though she suffers from a disability, she says she has no idea how Vianzon described her impairment.
According to the search warrant, the disability tax credit certificates signed by Vianzon followed a formula in which it was typically noted that patients were markedly impaired in two basic activities of daily living — walking and dressing.
Some clients interviewed by the Canada Revenue Agency said they were unaware Vianzon was exaggerating the severity and duration of impairments to guarantee larger tax refunds. However, the search warrant also indicates the CRA interviewed clients who arrived for assessments by Vianzon, paid their fee and waited while the doctor filled out forms without examinations or questions about medical history.
J & J Canadian Grants Company charges a commission of 22 per cent on refunds it secures for clients.
If you have more information on this story, or other investigative tips, please email [email protected].