After losing over $ 2 million in Ponzi scheme, this man fights the CRA to get his taxes back

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For a year and a half, 70-year-old Bill Janman has studied Canadian tax laws in all their complexity as he battles the federal government to recover tax money after losing millions in a Ponzi scheme .The final chapter in his fight came on Monday, when he presented 700 pages of documents on his case and took the witness stand in Calgary at the Tax Court of Canada.

Janman and his wife lost over $ 2 million after investing in Base Finance. Along with hundreds of others, they collectively lost around $ 137 million.

Arnold Breitkreutz, his company, Base Finance, and office manager Susan Elizabeth Way were fined and sanctioned in 2019 by the Alberta Securities Commission, which described the case as “one of the worst frauds in Alberta ”. The commission also described Breitkreutz and Way as having committed “fraud by deceiving investors and exploiting a Ponzi scheme”.

Both were arrested by the RCMP and face charges of fraud over $ 5,000 and theft over $ 5,000 for allegedly using the funds raised to pay other investors. Their trial is scheduled for next year.

Janman and his wife were never able to get their money back and have since attempted to amend their 2006-2011 and 2014 tax returns because they included fraudulent T5s from Base Finance. A T5 slip shows the different types of investment income.

Instead of showing ROI from those years, T5s should show a loss due to fraud.

Janman knows the millions invested in the scheme are gone, but he wants the Canada Revenue Agency to recognize victims of fraud and allow them to make changes to previous tax returns.

The CRA says the couple are “out of time”

However, the CRA contends that the couple is too late – that the deadlines have passed for the couple to file their notice of objection or request an extension of time to do so. The last deadline was in the spring of 2017.

“They’re each out of time for all tax years,” Adam Pasichnyk, the federal government lawyer representing the CRA, said at the hearing.

Going back and changing those tax returns would result in a collective refund of around $ 200,000, according to Janman. He said the CRA offered a partial settlement for about half that amount, but rejected it because Janman said he had done nothing wrong and was entitled to his full refund.

In court, Janman repeated his argument that there was no reason for him or his wife to file an objection with the CRA, as it was not until 2018 that authorities started releasing their conclusions in Base Finance.

WATCH | Bill Janman says most fraud victims give up their fight with the CRA, but he won’t:

Janman knows that the money he and his wife invested in a Ponzi scheme is gone, but he wants the Canada Revenue Agency to recognize victims of fraud and allow them to amend previous tax returns. 2:16

“We are not fortune tellers and we do not have a crystal ball or the ability to see the future. If we had done that we would have known that Base was a Ponzi scheme in 2005, not invested any extra money and not be here today, ”he said.

“We couldn’t have objected in any of the years because we just didn’t know Base was a Ponzi scheme. ”

Janman represents an informal group of around 300 other victims who lost money in the fraud case, most of whom are elderly.

“There are people like us who have resigned. I just got angry and decided to carry on, ”said Janman, who represented himself and his wife at the hearing because he said they didn’t. not the money for a lawyer.

“Our case here today represents an insignificant amount for the Canada Revenue Agency. For us this is a big problem. “

According to the Alberta Securities Commission, Arnold Breitkreutz and Susan Elizabeth Way told investors their money would be secured by mortgages on properties in the province, but their invested funds were spent or loaned to others. . (David Horemans / CBC)

Judge Kathleen Lyons will render a ruling next week on certain aspects of the case. Another hearing will be scheduled in the future.

Base Finance investors believed their money was secured by mortgages on real estate in Alberta. Instead, it was loaned to a man to buy oil and gas assets in the United States or used to buy properties for personal use, authorities said.

Some investors received so-called interest payments in order to maintain the facade of a legitimate investment transaction, but the payments actually came from new investor money.

Base Finance has been placed in receivership and the process is still ongoing.

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