Russell Anthony Porisky - Poriskyite Extraordinaire!

Post by **notorial dissent** » Thu Jan 28, 2016 12:38 pm

And undoubtedly a good deal more entertaining.

Post by **Burnaby49** » Sat Feb 13, 2016 7:26 pm

Yesterday Russell Anthony Porisky and Elaine Gould were convicted on all counts in their indictment for income tax evasion. This is the indictment;

Court File Number: 25339-14
Vancouver Registry

IN THE SUPREME COURT OF BRITISH COLUMBIA
DANS LACOUR SUPREME DE LA COLOMBIE-BRITANNIQE

CANADA,

PROVINCE OF BRITISH COLUMBIA/PROVINCE de la COLOMBIE-BRITANNIQUE,
CITY OF Vancouver /VILLE DE Vancouver.

HER MAJESTY THE QUEEN I SA MAJESTE LA REINE
AGAINST I CONTRE
ELAINE GOULD and I et RUSSELL ANTHONY PORISKY

INDICTMENT / ACTE D'ACCUSATION

Elaine GOULD and / et Russell Anthony PORISKY stand charged that / sont inculpes de ce qui suit:

Count I / Chef I
Russell Porisky, being of the City of Chilliwack, Province of British Columbia, between December 31, 2003 and December 4, 2008, did wilfully evade or attempt to evade the payment of taxes imposed by the Income Tax Act, by failing to report taxable income of Russell Porisky in the amount of$893,937.19, and did thereby evade the payment of $208,681.62 in income tax, contrary to section 239(l)(d) of the Income Tax Act.

Count 2 / Chef 2
Elaine Gould, being of the City of Chilliwack, Province of British Columbia, between December 31, 2003 and December 4, 2008, did wilfully evade or attempt to evade the payment of taxes imposed by the Income Tax Act, by failing to report taxable income of Elaine Gould in the amount of $218,073.22, and did thereby evade the payment of $27,434.56 in income tax, contrary to section 239(1 )(d) of the Income Tax Act.

Count 3 / Chef 3
Russell Porisky, being of the City of Chilliwack, Province of British Columbia, between December 31, 2003 and December 4, 2008, did wilfully evade or attempt to evade compliance with the Excise Tax Act or payment or remittance of the Goods and Services Tax, by failing to collect or remit Goods and Services Tax of$66,133.45 on goods and services sold by Russell Porisky and Elaine Gould doing business as Paradigm Education Group, and did thereby commit an offence contrary to section 327(1)(c) of the Excise Tax Act.

Count 4 / Chef 4
Russell Porisky, at or near the City of Chilliwack, Province of British Columbia, or elsewhere in the Province of British Columbia or other parts of Canada, between December 31, 2000 and December 4, 2008, did counsel, procure, solicit or incite various persons to commit the indictable offence of fraud in excess of five thousand dollars, contrary to section 380(1 )(a) of the Criminal Code, and did thereby commit an offence contrary to section 464(a) of the Criminal Code.

AND AGAINST THE PEACE OF OUR LADY THE QUEEN HER CROWN AND DIGNITY.
ET CONTRE LA PAIX DE NOTRE DAME LA REINE, SA COURONNE ET SA DIGNITE

DATEDTHIS/FAIT LE /'18 day of/jourde January, 2016,at the City of Vancouver I dans la Ville de Vancouver, Province of British c()lWl;ia I Province de la Colombie-Britannique.

Agent for the Director of Public Prosecutions I
Represenrant du directeur des poursuites penales

The jury started deliberations 1:30 yesterday but went for an hour and a half lunch break first. They had another break for supper at 6:30. I was there but, as you'd expect, went pubbing after the day's session. By the time I got home, about 10PM, the jury had decided on their verdict, been dismissed, and were home too. A total of about five hours in deliberations.

And so the deluge begins. I haven't reported on Porisky's trial since my entry of January 27th. But I wasn't neglecting Russ; I was there for much of it including all of last week. I've been writing it all up as it went along but not posting because the court had imposed a publication ban on proceedings until a verdict was rendered. So I have a 23 page Word document, single spaced, to inflict on you. Probably way too detailed but I wanted to record the nuts and bolts of my first jury trial.

I haven't written yesterday's session up yet, a very surprising day where I was blindsided by a totally unexpected visitor to the courtroom which resulted in my temporarily bailing out on Russ and Elaine and skipping lunch to instead rummage through a six-inch thick file that I had pulled from the British Columbia Supreme Court registry. A new Freeman topic entirely by chance! However, the rest is almost done and I'll start dumping it on you today. I'm writing it up as it happened rather than using any hindsight so it will be strictly chronological with individual postings for each day.

Post by **Burnaby49** » Sat Feb 13, 2016 8:31 pm

Monday - February 01, 2016

Although the trial started on January 27th this was my first attendance. Other Poriskyites, other obligations, and a disinclination to sit through hours of Porisky's videos. So I'm just dropping in from time to time.

Before the jury entered the judge said she had an issue to discuss with counsel. A juror had passed a note about something to do with misidentified evidence. The name and number on one piece of evidence didn't match something to do with a photo of the storage room at Porisky's house. Note said probably trivial. Judge asked Crown and Porisky for guidance. Neither seemed to care. So jury came in.

This is my first jury trial and there was a bit of a change of sequence in the opening of the trial day from the normal procedure I'm used to. Normally the sheriff calls out "Court in session, all rise" and the judge walks in. When she sits we all sit again. We did that but when the jury came in we all rose again. Six men, six women. Mix of age but tending around an average of 45 - 50.

We started the day with another Porisky video. A note on Porisky's speaking style. In the videos he's a dynamic, forceful, confidant speaker, nothing like the hesitant uncertain guy I've been reporting in his court hearings. If you are interested you can watch him yourself rather than relying on my description;

https://www.youtube.com/watch?v=oUs2MW6 ... 131B357ACF

In the video we watched (not the one linked) Porisky was going on how the natural man was not taxable. He started by asking himself the question "If we don't pay taxes how can we run the country?" Simple, just print more money that the government can lend to itself so it never has to pay it back. In other words, the current Venezuela solution. Grand if you are willing to put up with 750% annual inflation.

If we don't pay taxes what about roads? Gas tax. He's got all bases covered! If we pay income tax the government just gives it to the international bankers anyhow. Then he got all pious on us. Jesus says we have to render unto Caesar. But what is Caesar? Porisky is the expert on that too "I did ten years of Bible studies." He almost stopped his tax research because of that bible verse but then he realized Jesus was talking about civil servants paying off Caesar. The verse doesn't apply to non-government employment. Whew, he dodged that bullet by astute biblical analysis! Then a comment how all US presidential assassinations were done by private bankers. No context as to why he said that.

The presenter in the video looked a lot like our defendant. Granted a younger, more vibrant version, but apparently the same man. Which puzzled me since our defendant had said, in a prior session, that he needed time, lots of time, lots and lots and lots of time to watch all the videos because he did not know what was in them.

He barreled through all kinds of statutes, bouncing back and forth between them with seeming understanding and authority but too quickly to really determine if it made any sense. Except for one which I know he was bullshitting. His natural person gibberish suffered a severe setback in 2000 when David Kevin Lindsay acted for Thomas Kennedy in this case;

Kennedy v. Canada (Customs & Revenue Agency), 2000 CanLII 22837 (ON SC)
http://canlii.ca/t/1wd1t

The judge reviewed the claim that "natural persons" are not subject to tax and rejected it;

[9] Under s. 2 of the Income Tax Act, the liability to pay income tax is imposed on resident or non-resident “persons”. Under s. 248(1) of the Act, a “person” is defined as follows:

“person”, or any word or expression descriptive of a person, includes any corporation, and any entity exempt, because of subsection 149(1), from tax under Part I on all or part of the entity’s taxable income and the heirs, executors, administrators or other legal representatives of such a person, according to the law of that part of Canada to which the context extends;
In his submissions, Mr. Lindsay emphasized the words “includes any corporation”. By inference, he says, Parliament intended to exclude natural persons from this statutory definition of a “person”. At least, that is what I understand to be the essence of his submission.

[10] Under s. 248(1) of the Income Tax Act, a “taxpayer” includes any “person” whether or not liable to pay tax. Therefore, in Mr. Lindsay’s submission, if someone is not a “person” as defined in the Income Tax Act, then that someone cannot be a “taxpayer” as defined by the Act.

[11] In support of this submission, Mr. Lindsay has drawn my attention to Black-stone’s Commentaries as to the Rights of Persons and to Magna Carta which, as he rightly reminded me, Lord Denning has described as the greatest constitutional document of all time. As Blackstone points out, “Persons are divided by the law into either natural persons or artificial”. He goes on to explain:

Natural persons are such as the God of nature formed us; artificial are such as are created and devised by human laws for the purposes of society and government, which are called corporations or bodies of politic.

[12] It is significant for our present purposes that Blackstone considers both artificial persons and natural persons to be persons although they may have different characteristics (see para. [20] below.

[13] I was also referred to the definitions of “person” in The Business Profits War-Tax Act, 1916, S.C., 6-7 Geo V, c.11 and in The Income War Tax Act, 1917, S.C., 7-8 Geo V., c.28, forerunners of the present Income Tax Act. These statutes contain identical definitions of “person”, in the following terms:

“person” means any individual or person and any syndicate, trust, association or other body and any body corporate, and the heirs, executors, administrators, curators and assigns or other legal representatives of such person, according to the law of that part of Canada to which the context extends;

[14] Unlike its forerunners, the definition of a “person” in the current Income Tax Act does not expressly mention “any individual or person” (see para. [9] above). I am asked by the applicant to infer from this omission, that, in enacting the current definition, Parliament intended to relieve natural persons from their previous statutory obligation to pay income taxes.

[15] Who is a “person” within the meaning of the Income Tax Act? Applying the established rules of statutory interpretation (see para. [8] above), the question may properly be restated: what is the ordinary meaning or common or popular sense of the word “person”? The Canadian Oxford Dictionary (1998), gives as the primary meaning of the word, “an individual human being”. The Nelson Canadian Dictionary of the English Language (1997) gives as the primary meaning of the word, “a living human being”. Dictionaries are a recognized aid to the courts in determining the ordinary meaning or common or popular sense of a word used in a statute in accordance with the general rules of statutory interpretation.

[16] Black’s Law Dictionary (7th Ed.) (1999) gives as the primary meaning of the word “person”, “a human being” and, as a secondary meaning, “an entity (such as a corporation) that is recognized by law as having the rights and duties of a human being”. Osborn’s Concise Law Dictionary (7th Ed.), (1983) defines a “person” as:

The object of rights and duties, that is, capable of having rights and of being liable to duties. Persons are of two kinds, natural and artificial. A natural person is a human being; an artificial person is a collection or succession of natural persons forming a corporation.
…
In the Dictionary of Canadian Law (2nd Ed.) (1995), a “person” is a “natural person” and “includes a body corporate or politic” Blackstone himself made the same distinction between natural and artificial persons and treated them all as persons in the eyes of the law (see para. [11] above).

[17] These definitions taken from dictionaries including dictionaries of legal terms are uniform and clear. A “person” in its ordinary meaning includes a human being or a natural person as well as an artificial person such as a corporation. The primary sense of the word is a natural person; the secondary sense, an artificial person such as a corporation.

[18] The Interpretation Act (Canada) is consistent with this ordinary meaning. Section 35 of that Act defines a “person”, as follows:

“person” or any word or expression, descriptive of a person includes a corporation.
The use of the verb “includes” extends the definition to include a corporation. The definition does not exclude a human being. In the French text of the Act, the meaning is even clearer:

« personne » Personne physique ou morale; Tune ou l’autre notions sont visées dans des formulations générales, impersonnelles ou comportant des pronoms ou adjectifs indéfinis.

A “personne physique” is a natural person; a “personne morale” is a corporation.

[19] I am, therefore, driven to the conclusion that in its ordinary meaning and in its common or popular sense, the word “person” in a statute includes both natural persons and corporations.

[20] I am also driven to the conclusion that there is nothing in the context of the Income Tax Act. or in the authorities to which Mr. Lindsay has referred me, that would support the interpretation that in the Income Tax Act, Parliament intended the word “person” to be used in the narrower sense of comprising only corporations or other artificial persons. The statutory definition of a “person” in section 248(1) of the Income Tax Act includes “the heirs, executors, administrators… of such a person”. Only a natural person who has died has “heirs, executors, administrators…”. A corporation or other artificial person does not. As the English jurist Lord Chancellor Thurlow (1731-1806) is quoted as saying: “Did you ever expect a corporation to have a conscience, when it has no soul to be damned, and no body to be kicked?” J. Poynder, Literary Extracts, (1844) Vol. 1, page 268.

[21] I find that a “person” as defined in s. 248(1) of the Income Tax Act includes both a natural person and an artificial person. It follows that the applicant is a “person” and a “taxpayer”. I also find that he is a person “resident” in Canada. Either a corporation or a person may be “resident” or, indeed, for other legal purposes “domiciled”, in Canada or elsewhere. As a “person”, the applicant has the same rights and obligations as any other “person” under the Income Tax Act. His obligations include the filing of annual income tax returns and the payment of any income tax owing under his returns.

Porisky countered this in the video by saying that nobody was smart enough, and versed enough in tax law except him to understand that Kennedy had really won notwithstanding that he lost. Russ said that he'd deconstruct the judge's comments and found that they meant the exact opposite of what everybody else had assumed they meant.

Russ was big on the hidden meanings buried in statutes like truffles to be sniffed out by the astute. On to natural persons. If you carry on a business as a natural person you aren't taxable. He went into what we in the CRA called REOP, reasonable expectation of profit. If you make a profit as a natural person you really haven't made a profit because that is just the return you make as a natural person. You are worth the profit so it isn't taxable. So you have no REOP no matte how much money you make.

Then some straight-up bullshit. You have to take a civil service exam to work for government and since only civil servants are taxable you're in the clear if you haven't taken the exam. The usual Freeman stupidity that "includes" in statutes means, by some statutory interpretation magic, "includes only". Since the definition of employees in the Income Tax Act included corporate directors only corporate directors are employees under the Act.

He went through section 248 if the Act to prove that natural persons are not included in the definition of persons. Section 248 is the basic definition section of the Act. It's huge. Anything in it is deemed to be the correct interpretation of the word anywhere within the Act unless another definition elsewhere overrides it. Keep in mid that it was impossible to fact-check or even think through what Russ was saying. He was barreling on non-stop and bouncing around between various parliamentary statues and sections within the statutes. He sounded authoritative but none of his audience had any time to think about what he was saying before he was off elsewhere.

A big point for Russ was that the term "natural person" was not included as one of the section 248 definitions. Why not? Because the government did not intend to tax natural persons! I'd have thought, if that were the case on such an important issue, that parliament wouldn't have left it to be concluded from it's absence but would have made a positive statement to the effect that natural persons are not subject to income tax under this Act. But what do I know? Russ said that neither the definition of individuals or the definition of taxpayer specifically included natural persons. The only conclusion that could be drawn from this was that the government did not intend to tax you if you become a natural person.

Then he said that the Income Tax Act CAN'T include natural persons because it would automatically be voided by the Canadian Bill of Right. He provided no support for that comment.

Then Crown stopped the video for a break and I bailed. The Crown was planning to play nine hours of video out of, apparently, over a hundred hours and then spend the rest of the week entering evidence through CRA staff. "I picked up this box from the shelf at the Porisky residence, tagged it, and put it on this shelf of CRA secured storage" kind of thing. I decided to skip all that and sit in when Crown and Russ gave arguments, the part where they say why they are right and the other guy is wrong.

Post by **Burnaby49** » Sat Feb 13, 2016 9:57 pm

Tuesday - February 09, 2016

There was no court Monday because it was a provincial statutory holiday.

This was scheduled to be the first day of defense evidence and I was eagerly anticipating hearing Russell Porisky himself, the giant amongst Canadian tax protesters, demolish the Crown's case with his own vigorous full-blooded defense based on his legal brilliance and amazing depth of income tax knowledge. I was waiting for him to employ the acute legal analysis that had resulted in him alone, amongst all men, determining that Kennedy v. Canada was actually a win for his natural man theory rather than the disastrous loss everybody else considers it. I'm still waiting.

I attended today's session bright and early (actually 10AM, jury trials start late). We went through a quaint custom I've not mentioned before. Every day everybody introduces themselves to the judge, even the defendants, as if it's the first time there for all of them. After we all rose for the judge I anticipated rising again for the jury but, no jury. Instead the judge asked Crown counsel if she had an agenda. Huh? Judge wanted submissions from Crown regarding charges. Charges? He's already charged with income tax evasion and counseling income tax evasion. Then judge said something about mistakes in law. Had the Crown screwed up? Judge said she was not in a position to provide a draft of charges today and wanted advice from both side on what should be in charges. I was totally at sea but then the judge asked Crown what she should say in respect to the Crown's evidence since Porisky and Gould had decided not to give any evidence. WHAT? No defense evidence? After Porisky had demanded, in the December 10, 2015 hearing that his scheduled trial time be increased from four weeks to eight because that was the minimum time he needed to make a full defense? And whose lawyer, in the June 15, 2015 hearing said that Porisky intended to show the jury all of the videos, weeks and weeks of all day viewing of Porisky proving he was a human rights educator, not a tax evader? And then after demanding all of that court time he and Gould waived their right to use any of it in their own defense?

Yes. And it continued throughout today's hearing. The 'charges' under discussion were the judge's charges to the jury before deliberation and it was supposed to be a three way conversation between Porisky/Gould, Crown and the judge on what was to be in them. But Porisky and Gould contributed nothing at all to the discussion. They just sat quietly.

Back to the comment on evidence. Crown said that the judge needn't make any comment about the credibility of Crown evidence since Porisky hadn't chosen to challenge any of it or cross-examine witnesses.

Judge asked if she should comment on rules regarding circumstantial evidence. Crown said yes. Also an issue with counseling fraud charge. Crown said that it should be pointed out to jury that it wasn't necessary for the Crown to prove that anyone had actually committed fraud as a result of listening to Porisky in order to convict, just that he'd counseled income tax evasion.

Judge to Crown, should I instruct that mistakes in law not a defense? So that's what she was talking about earlier. Crown affirmed. Jury needs clear instructions that claims of mistake in understanding tax law not a defense. Apparently Crown saw some difficulty in the fact that Russ sometimes actually interpreted tax law correctly but in a different context. I assume different than his natural man issue.

Then the Crown brought out the big gun on this issue, Klundert. I've written about the Klundert decision here;

viewtopic.php?f=50&t=5876

Where I said;

Time for an update on Mr. Klundert. It took three trials to find the guy guilty of tax evasion, not because his guilt wasn't abundantly clear but because of boneheaded jury instructions by the first two judges. In the first trial Klundert's defence was that he didn't pay his tax because he had a sincere heartfelt belief that he wasn't required to. He was pulling the Porisky "natural person" argument explored in the "The Infection is Heading North" thread;

viewtopic.php?f=8&t=7827

Although this is not a defence in law in Canada (we have no Cheek equivalent) the judge actually instructed the jury that if they believed that Klundert had a sincere belief that he did not have to pay tax he was innocent of tax evasion. So the jury found him innocent.

The Crown appealed this and the appeals court slapped the judge around a bit and ordered a new trial. Klundert used the same defence again. As the appeals court said in respect to the second trial;

[11] At his second trial, despite this court’s ruling, the respondent again took the position that the Act was beyond the powers of the federal government. However, he did not argue that he failed to pay taxes that he knew were owed because he believed the Act to be unlawful and so inapplicable. Rather, he explained his failure to pay taxes as arising from his belief that he was not obligated to pay taxes. Klundert took the position that he was not obligated to pay income tax because he believed the Act does not apply to him. Klundert testified that he is neither a “person” nor a “taxpayer” as defined in the Act.

[12] The “defence” offered by the respondent at his second trial was merely a nuanced version of the defence offered at his first trial, a defence this court held was unavailable to him.

However the judge in the second trial, while stating that Klundert couldn't use this argument, allowed him to use it!

[24] In his charge, the trial judge correctly told the jury that the respondent’s evidence that he was a tax protestor did not provide a defence to the charge of tax evasion and did not go to the issue of Klundert’s intent to evade the payment of taxes. However, when he put the position of the defence to the jury, he stated that it was the position of the defence that:

[A]ny rational person could not have intended to evade by acting in the manner of the accused. They should acquit unless they are satisfied beyond a reasonable doubt that his stated intention to solely protest was not his honest intent.

[25] In so doing the trial judge erred in law. Where as a matter of law a defence is not available to an accused, it must not be put to the jury. Where defence counsel argue such a defence before a jury, the trial judge’s obligation is to clearly and unequivocally tell the jury that defence counsel was in error and that arguments to that effect cannot be relied upon in coming to a verdict.

http://canlii.ca/t/21j7z

So the appeals court ordered a third trial. This time the judge stomped all Klundert's attempts to argue that he really, really, really didn't believe he had to pay tax and the jury found him guilty of tax evasion in 2010. He was ordered by the Ontario Superior Court of Justice to pay a fine of $522,346.73 with respect to the taxation years 1993 through 1997 and in 2011 was ordered to pay a further $101,393.80 pursuant to a conviction for income tax evasion for the years 2000 to 2005.

This is what the first trial judge instructed the jury which resulted in the acquittal being quashed;

[26] About two and a half hours later, the jury returned with three more questions about the mental element of the crime of tax evasion. The trial judge responded:

(1) Please explain the mental elements about the evasion of taxes.

The word evade implies something of an underhanded or deceitful nature. In other words, a deliberate attempt to escape the requirement of paying tax on income that had been earned.
…
(2) Please explain the relevance of being a tax protester.

There is no relevance as long as his belief is honest. You can’t just get up and say I’m a tax protester, therefore I’m innocent. What the Crown has to prove is that his tax protest is a deceitful method of evading taxes and the Crown has to prove that beyond a reasonable doubt. You have heard Dr. Klundert. He said, I didn’t intend to evade taxes, I just intended to protest.

(3) If we find that he was honest in his beliefs, do we therefore find him innocent?

Well remember what I told you, if you believe what he said, if you believe his evidence, the Crown has not proved that he had the specific intent to evade taxes beyond a reasonable doubt. If you feel that he is honest, or if you have a reasonable doubt about it, in other words, I think he is honest, then the Crown has not proved that he had the intention to evade taxes beyond a reasonable doubt [emphasis added].

[27] After a brief discussion with counsel, the jury was recalled. The trial judge told the jury that he misspoke in his recharge when he was explaining the relevance of being a tax protestor. The trial judge corrected his previous instruction in these terms:

As to the answer to question two, please explain the relevance of being a tax protester in this case. You can be a tax protester in this case. You can be a tax protester but if the Crown proves beyond a reasonable doubt that your protest was for the purpose of evading taxes then you may find him guilty. If he is reckless about it and is honest then you would have a reasonable doubt that he did it for the purpose of evading tax. If he is dishonest about it then you may find that the Crown has proved his intent to evade tax beyond a reasonable doubt.

[28] The net effect of the trial judge’s instructions was to tell the jury that a person who refused to pay his or her taxes as a protest could not be convicted of evading the payment of taxes if that protest was made “honestly”. Applied to Dr. Klundert’s evidence the instruction became a direction that a refusal to comply with the Act based on an honest belief that the Act was beyond the powers of the federal government was a defence to a charge of wilfully evading taxes. The jury was told that Dr. Klundert should be acquitted of that charge unless the Crown could prove beyond a reasonable doubt that he did not have that honest belief.

The court of appeal concluded that;

[59] A person’s mistaken belief that a statute is invalid or is otherwise not applicable to that person’s conduct is a mistake of law. It is, however, a mistake of law that is irrelevant to the existence of the fault requirement in s. 229(1)(d). Nor can that kind of mistake of law provide a freestanding excuse for the commission of a crime: Criminal Code, s. 19; R. v. Jones (1991), 1991 CanLII 31 (SCC), 66 C.C.C. (3d) 512 at 516-517 (S.C.C.); R. v. Watson (1999), 1999 CanLII 13906 (NL CA), 137 C.C.C. (3d) 422 at 431-33 (Nfld. C.A.).

[60] There are solid policy reasons for drawing a distinction between an accused who mistakenly believes that he or she is complying with the Act and an accused who knowingly violates the Act, but mistakenly believes that the Act is invalid. The former is trying to comply with the law. Particularly where the law is complex, a mistake concerning the applicable law can logically negate the blameworthiness of the person’s conduct. The latter is not trying to obey the law, but is instead deciding which laws should be obeyed. An acquittal based on a mistaken belief as to the validity of a law would undermine the rule of law.

[61] There can be no suggestion that a person who honestly believes that the Act is invalid has no option but to evade the payment of taxes and then defend a charge of tax evasion on the basis of a belief that the Act is invalid. As Dr. Klundert acknowledged, there were mechanisms in place whereby he could have challenged the validity of the Act without evading payment of taxes owed under the Act. He chose not to pursue any of those avenues. Indeed, even in this case, he did not defend the charge, as he clearly could have, by asking the judge to declare s. 239(1)(d) invalid.

[62] My conclusion that Dr. Klundert’s belief that the Act was invalid is irrelevant to his liability under s. 239(1)(d) is consistent with the conclusion in Cheek, supra, a case involving a tax protestor who refused to pay his income tax claiming that the Act was unconstitutional. In holding that the accused’s belief as to the validity of the Act was irrelevant on the charge of wilfully evading income tax, White J. said, at 612-613:

Claims that some of the provisions of the tax code are unconstitutional are submissions of a different order. They do not arise from innocent mistakes caused by the complexity of the Internal Revenue Code. Rather, they reveal full knowledge of the provisions at issue and a studied conclusion, however wrong, that those provisions are invalid and unenforceable. …

We do not believe that Congress contemplated that such a taxpayer, without risking criminal prosecution, could ignore the duties imposed upon him by the Internal Revenue Code and refuse to utilize the mechanisms provided by Congress to present his claims of invalidity to the courts and to abide by their decisions. …

We thus hold that in a case like this, a defendant’s views about the validity of the tax statutes are irrelevant to the issue of willfulness and need not be heard by the jury, and, if they are, an instruction to disregard them would be proper. For this purpose, it makes no difference whether the claims of invalidity are frivolous or have substance [emphasis added].

[63] Dr. Klundert’s evidence as to his beliefs concerning the validity of the Act were irrelevant to his liability under s. 239(1)(d). The jury should not have heard that evidence. Having heard it, the trial judge should have told the jury that it was irrelevant to Dr. Klundert’s culpability.

And concluded;

[65] The instructions to the jury reveal error in law. That error went to the heart of the only issue in dispute on the tax evasion charge. The acquittal cannot stand.

[66] The acquittal was entered by a court composed of a judge and jury. Having concluded that the Crown appeal must be allowed, this court’s only option is to order a new trial: Criminal Code, s. 686(4)(b)(ii).

[67] At the new trial, Dr. Klundert will not be allowed to advance the “protestor” defence as I have held it is not a defence in law to the charge. That was the only defence advanced at his first trial. On the retrial, however, Dr. Klundert can advance any defence that is legally available to him.

However, notwithstanding these clear instructions, the judge at the second trial allowed the defense to put forward the mistake in law defense. This generated another trip to the appeals court, another acquittal quashed, and a third trial ordered.

Crown called these case Klundert 1, 2 and 3. She said that the instructions to the jury in Klundert 1 and 2 were in error and grounds for appeal. Klundert 2 was correct that a defense does exist in mistake in law in evasion cases but very limited and an honest intent to protest tax laws is not valid. So Klundert 2 a clear error. Klundert 3 finally got it right. Klundert 3 was good law on how to instruct the jury regarding any attempts by the defendant to claim that he'd made an honest mistake in understanding the law. I think Crown might have made this comment just to tweak the judge that the instructions that she was to give on the issue of mistakes in law had to be correct according to the Klundert standard to be appeal-proof.

Crown submitted that Porisky's beliefs were no different than Klundert's so there was no defense for Porisky and Gould in mistake in law. Additionally there was no evidence entered by Porisky or Gould that supported a claim of mistake in law. So judge asked, is it your submission that I should instruct the jury that mistake in law is not a defense? Yes.

Another point regarding taxes. Crown said that jury needed instruction from judge that not only was there unreported income but also that there was taxes owing.

Judge said that she would provide draft of the charges to jury at 9:30AM tomorrow and the jury could come in at 2PM. Crown will start with closing statement then Porisky then charge to jury and done.

Courtroom was packed this time. Started slow with only three spectators then young people started swarming in. The largest group was about 20 teenage girls in private school uniforms. I suppose they were on a day's outing to see how courts actually worked.

Post by **Burnaby49** » Sat Feb 13, 2016 10:28 pm

Wednesday - February 10, 2016

Started late today. The morning was scheduled to be spent with Crown, Porisky, Gould, and judge working on judge's charges to the jury. Little there of general interest so I skipped it and was in the court at 2:00 for the start of the afternoon session. Today was to be Crown's closing arguments with Porisky tomorrow. He barely participated yesterday and seemed very low today so, after not giving any evidence he may not bother with closing arguments either. We'll see. He was aggressive in his pre-trial hearings about the defense he was going to mount and his statement to the jury but he seems defeated at the moment. I'll only find out when his turn comes.

Six other spectators today. I'm guessing all lawyers based on their chit-chat. None returned after break.

Crown had two issues before jury brought in. One was Porisky and Gould's decision not to enter any evidence. Judge, Crown and idle spectators like me knew it but the jury didn't. So Crown wanted the judge to inform the jury. Second issue was some exhibit that needed the judge to rule that it could go before the jury. So ruled.

Then the jury came in. Warm in the courtroom but one guy dressed in anticipation of a blizzard. Winter coat and big scarf. Judge asked Porisky, then Gould if they planned to enter evidence. Two "no my lady" responses and that was done.

On to Crown's closing arguments. I was jotting down notes but the Crown lawyer talked for close to two hours and some of it technical so I can't give a transcript as much as bullet points of the parts that interested me. I make no claim to getting all of it. In fact in the GST discussion I didn't even bother.

A general thanks to the jury for doing their civil duty then; Ladies and Gentlemen this is my chance to show you why it is clear that Porisky and Gould (I'll call them P&G from now on) are guilty. This will be a long explanation not because of complexity but because of volume of evidence. All you need here is to apply your life experience and common sense to the evidence and charges. As the finders of fact it is your view of the evidence that matters. It is up to her ladyship to instruct you on the law.

Then Crown summarized evidence on charge 1. This charge was;

Count 1 I Chef 1

Russell Porisky, being of the City of Chilliwack, Province of British Columbia, between December 31, 2003 and December 4, 2008, did wilfully evade or attempt to evade the payment of taxes imposed by the Income Tax Act, by failing to report taxable income of Russell Porisky in the amount of $893,937.19, and did thereby evade the payment of $208,681.62 in income tax, contrary to section 239(l)(d) of the Income Tax Act.

So only Russ up to bat at the moment. Earned income in 2004-2008 and evasion occurred by not reporting it. He is also guilty of GST (goods and services tax) fraud as shown in count 3 and, as we will show in count 4, he committed the indictable offense of fraud.

This is count 3;

Count 3 I Chef 3
Russell Porisky, being of the City of Chilliwack, Province of British Columbia, between December 31, 2003 and December 4, 2008, did wilfully evade or attempt to evade compliance with the Excise Tax Act or payment or remittance of the Goods and Services Tax, by failing to collect or remit Goods and Services Tax of $66,133.45 on goods and services sold by Russell Porisky and Elaine Gould doing business as Paradigm Education Group, and did thereby commit an offence contrary to section 327(1)(c) of the Excise Tax Act.

For those of you interested in what the GST is here is Wikipedia's explanation,

https://en.wikipedia.org/wiki/Goods_and ... x_(Canada)

and count 4;

Count 4 I Chef 4
Russell Porisky, at or near the City of Chilliwack, Province of British Columbia, or elsewhere in the Province of British Columbia or other parts of Canada, between December 31, 2000 and December 4, 2008, did counsel, procure, solicit or incite various persons to commit the indictable offence of fraud in excess of five thousand dollars, contrary to section 380(1 )(a) of the Criminal Code, and did thereby commit an offence contrary to section 464(a) of the Criminal Code.

The indictment ended on a very regal note.

AND AGAINST THE PEACE OF OUR LADY THE QUEEN HER CROWN AND DIGNITY.

Back to Crown arguments. All of the offenses related to Paradigm Education Group. Porisky head of Paradigm and Gould assisted him. Turn to the evidence. Neither P or G called evidence. Regardless of that you job is the same. It is your view of the evidence not mine that is important. You heard from 14 current or former CRA auditors (I did not attend those trial sessions).

(A note regarding next part of Crown submission. The Crown mentioned a specific CRA employee involved in Porisky's file. I prefer not to name people unless necessary so we'll call the employee the Grand Inquisitor, GI for short;

GI works for Investigations in the Vancouver CRA office. That's the group that goes after tax evaders. I saw him testify on behalf of the CRA in another case. An excellent witness. Answered only what was asked and thought answers through before making them. Organized, calm, and business-like. I have no doubt he was the same here.

GI was not involved in the search but he inventoried the seized evidence and created spreadsheets based on the seized evidence. Judge - Can you slow down. Good point. I couldn't keep up either.

Next evidence to review is admissions. These are two documents P&G signed. These contain facts you can take as given. They relate to some items found in evidence. Last evidence is affidavits. There were four from GI. Then a run-through of exhibits I didn't bother to record.

How should you approach the evidence? Follow the money. What Money? The money that went through Paradigm. You may be inclined to view Paradigm as a hobby of Porisky but it was much more than a hobby. The sheer volume and scale of Paradigm's activities indicate otherwise.

(another note - Porisky operated Paradigm two ways, through his own efforts as a speaker and motivator and through "educators" like Denise Eddy who was just convicted in Edmonton of income tax and GST evasion and counseling fraud;

viewtopic.php?f=50&t=9899#p221925

And Edwin Sigglekow, convicted in Grande Prairie, Alberta on the same three counts;

viewtopic.php?f=50&t=9894#p177714

The educators were essentially franchise operations which ran relatively independently of Porisky but followed his game plan as laid out in his huge set of manuals and videos. Porisky kept detailed records of all of them since part of the money he made was a cut of the fees and sales that the educators made. In fact the Canada Revenue Agency located and identified them all through the records contained in Porisky's seized computer.

The Crown discussed the evidence contained in the individual folders that Porisky kept for each educator which the Crown claimed showed that Paradigm was run as a business. It had three sources of income.

1 - Sales of products (manuals, courses, etc. Even "Shift Happens" T-shirts!. I've seen one)
2 - Educator's fees
3 - Conferences

Crown picked Debbie Anderson as an example of an educator. This is Debbie;

viewtopic.php?f=50&t=10747

Debbie also organized the annual Paradigm Tax Evasion Dinner and Dance!

viewtopic.php?f=50&t=10305

Crown said that Debbie was a presenter in the "Tough Love" video that you saw. Crown went through evidence in Debbie's folder showing records of her relationship with paradigm. Educators had different levels of compensation they paid to Paradigm based on the number of students they managed to recruit. First ten had resulted in one level of payments, next ten another and so on. Documents showed that educators also sold products with income flowing up to Paradigm.

The minimum revenue Paradigm earned was the money Porisky put in the bank accounts since he had no other sources of income during the years in question. GI spreadsheets showed that Paradigm generated over a million dollars in profits during the years under indictment. None reported. Crown told jury that they didn't have to trust us or GI. The basic information that GI used in the spreadsheets was included in evidence and they could check it out themselves.

Crown asked for afternoon break a bit early at 2:50. Normally 3:00.

Before Crown proceeded after break judge said that the jury had selected a foreperson. He introduced himself as number 223. Coat and scarf guy had to move because he was sitting in the front row right hand seat which was apparently the designated seat for the foreperson.

When we got started again Crown resumed rambling through the arrangement of exhibits. No doubt the jury needed to know this but we don't so I didn't bother to record it.

The Crown told jury how the CRA had allocated whatever expenses they could verify. They had allowed 20% of household expenses (power, property tax, etc) because that was the estimate of how much of the household was allocated to Paradigm operations. Allowed 50% of all dining and entertainment expenses because that is a statutory maximum under th Income Tax Act. So then rhetorical question; Where did the profits go? To pay P&G's living expenses and acquire assets. P&G had bought a condo on Yale Road in Chilliwack and a house on Willow Drive along with their own home. Also purchased gold and silver which was part of the seized evidence. There was no evidence of any mortgages on the real estate and gold and silver purchased for cash.

Then a discussion of income allocation. Crown told jury that if they agreed that both P&G worked for Paradigm then they would have to determine an allocation of the income and profits between the two of them.

(Note - this was critical for count 2;

Count 2 I Chef 2
Elaine Gould, being of the City of Chilliwack, Province of British Columbia, between December 31, 2003 and December 4, 2008, did wilfully evade or attempt to evade the payment of taxes imposed by the Income Tax Act, by failing to report taxable income of Elaine Gould in the amount of $218,073.22, and did thereby evade the payment of $27,434.56 in income tax, contrary to section 239(1 )(d) of the Income Tax Act.

If Gould worked for Paradigm and made a taxable income from it then she evaded tax since she did not file any tax returns during the years in the indictment.)

Crown noted how Gould's name was on the Paradigm business card contact number and emails and brochures showed that she was involved. The emails showed that she was receiving and taking orders for products and she booked conference rooms and catering. At a minimum Gould was primary contact and conducted day to day operations for Paradigm although she was not an educator. Crown estimated, and suggested, that 20% of Paradigm profit be allocated to Gould.

Crown said - You do not need to estimate amount of taxes evaded, only that some taxes were evaded on the 2004 to 2007 period. While Crown does not have to prove amount of taxes evaded I'll run you through some of the Crown's calculations. So Crown went through some of P&G's reconstructed income tax returns showing the estimated taxes they would have paid had they filed. I think the lawyer said that 20% of the purchased assets were in Gould's name and this was the source of the 20% allocation.

Then another rhetorical question. What did Porisky and Gould pat in taxes? Nothing. They did not file at all in the 2004 to 2007 period except for Porisky filing his 2004 return in which he reported no income. The evidence however showed that they filed in prior years. This showed deliberate intent not to file in years in the indictment.

At this point the sheriff, who was sitting a few feet away from me gave me an accusatory look. I'd been tapping my pen on a book that I used as a support for my notepad.

Then a lot of talk about count 3; GST evasion. Frankly I wasn't interested and didn't bother recording it. I spent my entire working career as an income tax auditor and GST is a total mystery to me. Crown claimed that $66,149 in GST evaded.

Now 4;00, quitting time. Crown said one final point before break. It was clear that Porisky did not remit GST owing. Paradigm publications said that Paradigm followers did not have to pay GST. This, at best, was a mistake in law which did not serve as a defense.

Then judge outlined schedule for next few days. Crown will conclude tomorrow morning then Porisky/Gould will close. Court will then recess until Friday morning when the judge would instruct the jury then deliberations. This would probably start before lunch on Friday and jury would be sequestered until such time as they arrived at a verdict or determined that they could not arrive at a verdict. Jury would continue on Saturday. Then court recessed for the day. I'll be back tomorrow morning to see what Porisky does, if anything. He seems dispirited.

So the trial was scheduled for six weeks and will, apart from deliberations, be concluded in two weeks. Works for me.

I don't want to leave the impresssion that the Crown's statement was disjointed and random. The statment flowed logically but I was only picking out sometimes unconnected segments. Basically Crown was going through the charges sequentially and tying them to the evidence. So first Russ was reviewed in respect to income tax evasion. Then Gould was considered in respect to evasion. After that the Crown connected Russ to GST evasion leaving just count four, Russ's aledged counselling fraud, to be considered tomorrow. Then it's Porisky and Gould's podium.

Post by **Burnaby49** » Sun Feb 14, 2016 1:55 am

Thursday - February 11, 2016

Today there were two other spectators at the start of the hearing. One was GI, the CRA employee I'd mentioned yesterday. So I had a chat with him about the Doerksen trial, the one where I'd heard him testify. The trial was held this summer and I sat in for about two weeks of it however it was adjourned until, unfortunately, this week so it conflicted with Porisky. In addition the two trials were being held in different courthouses about a mile and a half apart. So I had to pick one of the two and I bailed on Doerksen. So I asked GI how Doerksen was going. Almost done, might well be concluded today. A trial by judge and decision expected fairly quickly. Might even be written reasons for judgment which we won't get with Porisky since trial by jury.

Before jury entered courtroom the judge wanted to give a ruling on something she called the Crown's Aid. The issue was whether or not it should be allowed in the jury room during deliberations. This turned out top be a four page document restating GI's evidence in respect to the amount of taxable income earned by Paradigm and the amount of GST owing. The purpose of this document was to give some guidance as to where the numbers in the calculation came from. The judge had decided to allow it and read her ruling out. This is a complex trial and the aid will assist members of the jury to deal with the evidence more intelligibly. So I will allow it and tell the jury in my charges that it is not evidence but a summary for their assistance.

Then jury let in and Crown resumed closing arguments. On to count four. Throughout this trial you have been exposed to Porisky's teachings. You have watched three videos which show the evolution of these theories. Crown discussed videos separately;

1 - Introduction to Human Rights (2004) - There is a set of Paradigm publications under the same name. Same contents as video. This was an early introduction to Porisky's theories to attract new students. I believe it is this video I located on You Tube;

2 - The Holistic Analysis of the definition of Person in the Income Tax Act (2007) - This falls in the other end of the spectrum from an introduction. It is detailed and specific. Crown quoted from Porisky intro - Is a natural person as defined in (he cited a specific Canadian legal dictionary which i missed) included in the definition of person in section 248(1) of the Income Tax Act? This is the video I partly watched a few days ago.

3 - Tough Love (2005) - This one slightly different in nature from the others. More business support than education. Debbie Anderson gave her advice on how to run business of Paradigm educator. Video was made for other educators.

Then Crown ran through Porisky theory as (I think) given in a brochure. Taxpayers are artificial persons. Natural Persons are not taxable. Natural persons represent a federally created artificial person. You can avoid tax by taking contract for hire. Paradigm can sell you a copy. Money earned by a natural person not subject to tax. Crown said that not only does it have no legal logic it makes no common sense. Porisky is not on trial for holding his beliefs for sharing his beliefs. He is on trial for actively encouraging fraud through the Paradigm system. The judge will instruct you that none of the Paradigm beliefs are valid law.

He promoted an educational program to encourage evading taxes. Paradigm offered what they called a legal alternative to paying taxes. The Crown suggests that this constitutes counseling fraud.

The Paradigm teachings were really a defense against tax evasion charges because it taught that if you followed Paradigm the Crown couldn't charge you with evasion because it couldn't prove that you have a guilty mind. It was just a defense if caught. The various disclaimers that Porisky put in his publications do not distract from his views. He says to consult experts then gave his views with 100% certainty.

Then Crown brought up Eva Sydel. I said in my December 18th posting that the Crown said;

There are some legal documents we seized which we want to enter, including the Sydel case, which go to mens rea but we will need your ladyship's permission to enter them.

Well they apparently got permission. This is an awkward topic for Russ because Eva was (I believe) the first Poriskyite to face a tax evasion trial and she lost. Badly. This is the decision where the judge demolished Porisky's fable of tax-free natural persons;

R. v. Sydel, 2006 BCPC 346
http://canlii.ca/t/1p2m1

I touched on the Sydel decision here;

viewtopic.php?f=50&t=10271&p=178436#p178436

Where I said;

A bit of background is necessary. Eva Sydel, dentist and Poriskyite, was the first of Russell Porisky's crew to end up in court on tax evasion charges and to say she lost badly would be like saying Custer had a bit of a setback at the Little Big Horn. She actually forced the court to impose a jail sentence on her and, after she destroyed her life and lost her dental practice, found a new career as an obsessed serial litigant. She's discussed here;

viewtopic.php?f=50&t=7827

Her conviction set the stage for all the Porisky/Paradigm trials to follow, endangering Porisky's gravy train so it behooved (never used that word before!) him to show his followers why the decision was wrong and his theories were still correct. In 2006 he coughed up a 56 page detailed analysis of why the entire Sydel decision was just a judicial mockery. Given the number of Poriskyite followers who have been convicted since this magnificent piece of legal analysis was penned the only rational explanation is corruption in the courts.

While I won't go into detail (read it yourself if you are interested) his overriding point seems to be that Parliament has, for more than eighty years, failed to use clear and unequivocal words to directly include "natural person" in the definition of "person" in the Income Tax Act. This clearly means, to anyone with an IQ higher than that of a turnip, that natural persons were deliberately left out of the definition because Parliament had decided that natural persons are not taxable.

Seems pretty conclusive to me. Of course a devil's advocate might bring up the alternative view that it was not included because Porisky fabricated the whole natural person scam, along with inventing an entirely imaginary new category of "person", long after the definition of person was included in the act. Also it could be concluded, as the courts have had no problem doing, that the definition of person is all-encompassing so there is no such thing as a natural person to include or exclude for tax purposes. But I suppose that's just me nit-picking.

Porisky also went into great detail to show how the lazy crown counsel just assumed, for purposes of arguing a criminal case, that the word "includes" is a term of expansion that adds to a definition instead the actual common sense understanding of the word which clearly means only those things specifically mentioned after the word "includes" in the definition.

I'll give my own example to show how absurd the crown's position was. Let's say that your granny's recipe for chocolate chip cookies says to include baking powder. The crown's ludicrous understanding of the meaning of "includes" would open the door for the recipe to have other ingredients like chocolate chips, flour, sugar, raw garlic, whatever, in it. This is so imprecise as to be meaningless, who can make sense out of it? In Porisky's legally incisive definition of "includes" granny's chocolate chip cookies recipe would contain nothing but baking powder. Now isn't that far more logical?

Porisky concluded with the sobering thought that if Sydel's guilty conviction was allowed to stand the CRA was going to go on to the next phase of their program; charging all our children with criminal tax evasion for not paying taxes on their allowances. That clearly follows.

This is the 56 page rebuttal to the Sydel decision that Russ wrote up telling why Judge Meyer totally screwed it up by finding Sydel guilty.

http://www.mediafire.com/view/4968k522c ... cision.pdf

Today Crown said that Porisky testified at the Sydel trial defending her use of his system so he was aware that his holistic analysis was put before the court at her trial. There is evidence that Porisky paid at least part of Sydel's legal fees to retain Doug Christie. There are cheques supporting this.

Crown noted that Debbie Anderson said in Tough Love that Doug Christie would be a guest speaker. He'd represented Sydel in court. Crown made a quote from Porisky's 56 page master work given above that essentially said that only someone versed in the Paradigm theory could give qualified advice about it.

Crown said that Porisky's analysis of the Sydel decision clearly showed his knowledge of law and his refusal to accept that he was wrong. You will have no trouble concluding that Mr. Porisky was saying in his video that it didn't matter if Paradigm was right or wrong. It was an excuse to evade. This is wrong. Believing you are right is not an excuse to evade. If evidence supports my case I ask you to find him guilty.

Then it was Porisky's turn to demolish the Crown's case in closing argumets. He and Gould faced the jury and said "Elaine and I thank you". Then he mumbled something and they sat down. I think he said something along the lines of "We hope you come to the right conclusion that supports us" but I'm not sure. I asked two other people in the public seating but they didn't hear either. Porisky seemed entirely dispirited, defeated. Basically all that he has said in the past three days is "no Your Ladyship" when asked if he had any comments on anything.

Jury was then excused until tomorrow. It was 10:55 so judge said break until 11:15 then she and parties would discuss the charges to the jury, probably until 12:30, then conclude for the day.

Back at 11:15. The purpose of the remaining time was to review judge's instructions. She had given them a draft yesterday and wanted their suggestions regarding revisions. Judge said one thing that caused me some concern. I thought I heard her say that this part of the trial was off the record. Did this mean that I couldn't report on it? I queried counsel after session on this and I'd apparently misheard. It had to be on record but I was partly right about not reporting it. The publication ban precluded any reporting until the jury had arrived at a verdict.

The Crown had done a very thorough job of reviewing the charges and had a significant number of suggestions, mostly trivial. Typos and wording. Paragraphs 39 to 41 were redundant so Crown suggested they be struck. One thing that was of some significance was that judge planned to say that all evidence entered at trial would be available in the jury room. Crown corrected this because a copy of the Canadian Income Tax Act had been entered into evidence but this would not be available to jurors. So Crown wanted that noted to jury. The reason was that the jurors were not to interpret the law themselves. It was the judge's job to instruct the jury on law. So the sentence about all evidence available changed to say that if the jury required any clarification about the law they were to come back into open court and ask the judge.

In another part the judge had written to say to the jury "you must ask yourself two questions" but Crown pointed out that after that comment the judge only brought up one question. Judge said she couldn't remember now what she was thinking but she'd revise it.

Crown was dredging deep, they mentioned citing the Stewart case as a basis for determining what constituted a business. I remember Stewart very well, a case that caused much wailing and despair in the Canada Revenue Agency. It involved REOP (Reasonable Expectation of Profit). If a business lost money year after year the CRA generally disallowed the loss being applied against other income on the basis that there was no business since there was no profit potential. In general the CRA had a point since there was a lot of abuse on the issue. People going to Spain for the winter and trying to write it off on the basis that it was research for a book, trying to deduct hobbies or personal expenses. So what was a reasonable expectation of profit? Whatever a CRA auditor said it was!

In itself Stewart was a totally trivial case but it made it to the Supreme Court and demolished the REOP concept. Here were the facts;

The appellant, an experienced real estate investor, acquired four condominium units from which he earned rental income. The properties were part of a syndicated real estate development, and were sold on the basis that the purchaser would be provided with a turnkey operation, that management would be provided, and that a rental pooling agreement would be entered into. All units were highly leveraged with the appellant paying only $1,000 cash for each unit. The appellant was provided with projections of rental income and expenses in respect of each of the properties. The projections contemplated negative cash flow and income tax deductions for a ten�year period. However, the actual rental experience ended up being worse than what had been set out in the projections. For the taxation years 1990 to 1992, the appellant claimed losses, mainly as a result of significant interest expenses on money borrowed to acquire the units. These losses were disallowed by the Minister of National Revenue on the basis that the taxpayer had no reasonable expectation of profit and therefore no source of income for the purposes of s. 9 of the Income Tax Act , and that the interest expenses were not deductible pursuant to s. 20(1)(c)(i) of the Act. Both the Tax Court of Canada and the Federal Court of Appeal upheld the decision.

The SCC said;

The “reasonable expectation of profit” test should not be accepted as the test to determine whether a taxpayer’s activities constitute a source of income for the purposes of s. 9 of the Income Tax Act . In recent years, this test has become a broad�based tool used by both the Minister and courts independently of provisions of the Act to second�guess bona fide commercial decisions of the taxpayer and therefore runs afoul of the principle that courts should avoid judicial rule�making in tax law. The test is problematic owing to its vagueness and uncertainty of application; this results in unfair and arbitrary treatment of taxpayers.

In sum, whether a taxpayer has a source of income from a particular activity is determined by considering whether the taxpayer intends to carry on the activity for profit, and whether there is evidence to support that intention. In this case, the taxpayer purchased four rental properties which he rented to arm’s length parties in order to obtain rental income. A property rental activity which, as here, lacks any element of personal use or benefit to the taxpayer is clearly a commercial activity. As a result, the appellant satisfies the test for source of income and is entitled to deduct his rental losses. Section 20(1) (c)(i) of the Income Tax Act , which permits the deduction of interest on borrowed money for the purpose of earning income from a business or property, is not a tax avoidance mechanism and, in light of the specific anti�avoidance provisions in the Act, courts should not be quick to embellish provisions of the Act in response to tax avoidance concerns. In addition, since a tax motivation does not affect the validity of transactions for tax purposes, the appellant’s hope of realizing an eventual capital gain and expectation of deducting interest expenses do not detract from the commercial nature of his rental operation or its characterization as a source of income.

Stewart v. Canada, [2002] 2 SCR 645, 2002 SCC 46
http://canlii.ca/t/51sg

As you can guess the Supreme Court allowed Mr. Stewart's appeal and the CRA somehow adjusted to the new reality. So I assume Stewart was brought up here to show that Paradigm fell within the Supreme Court's guidance as to what constituted a business.

On to other revisions. Something in present tense should be in past, an "or" should be an "and". A significant one came up. A sentence implied that some issues were already determined to be fact when they are not. It is one of the duties of the jury to determine if they are facts.

Crown did 45 minutes of detailed nit-picking all of which seemed to be accepted by judge. But when P&G were asked if they had any comments or suggestions they said no.

Crown asked if revised copy would be available tomorrow before court. Judge said she would drop a revised copy off at the registry which would be available at 9AM. This would allow for one further check before 10AM opening. We closed on that note. I'll skip the pre-opening parsing and be there at ten.

There was a change in focus for the Crown today. Yesterday it was evidence-evidence-evidence. Today Crown counsel went to intent and actions of defendants.

Post by **Burnaby49** » Sun Feb 14, 2016 6:00 am

Oops. I'm going to post out of sequence because I just found another write-up in my notebook that I'd missed on a first review. Only a week ago and already forgotten. Not a particularly memorable session.

Friday - February 05, 2016

Before the jury came in the Crown and judge discussed any possible prejudicial effect of Denise Eddy's guilty plea yesterday. This is Denise;

viewtopic.php?f=50&t=9899

Crown said that she doubted that the jury would have heard about it. CRA planned to announce news on Monday and Crown said she would try and see if she could get them to hold off a few days. Seemed entirely pointless to me. All of the Poriskyites who have gone to trial have lost. Every one. Here's the list that I've compiled;

viewtopic.php?f=50&t=10250

Porisky and Gould are in it. Any juror can find all of this information in a few minutes so I fail to see how one more case will tip it into prejudicial.

Jury came in. Another video session. We got to see the last half of a DVD of Porisky's interpretation of Income Tax Act. It started with him joking to the audience who responded with laughter. I wondered how many of the jolly seminar crowd ended up facing criminal charges.

Porisky is big on punctuation and grammatical construction. Meanings can be changed by punctuation. A comma changes everything!

He had some nonsense about how the current definition of "person" in the Income Tax Act does not include natural persons since that phrase is not used in the definition however it was clearly included in the 1917 version of the Act although "natural persons" was not used in that one either. But you could infer that natural persons were included as persons in the 1917 Act and infer that it is not in the current one. That proved that the government originally intended to tax natural persons by not putting them in the 1917 edition but they later changed that to make natural persons non-taxable by not taking them out of the definition they already weren't in. He said this was obvious. My thought was; if the government did not wish to tax natural persons why didn't they make a section in the Act saying exactly that rather than hiding it in inferences that only Russ could tease out of the wording? All to deep for me.

He said that if parliament had wanted natural persons to be taxable they would have specifically included it in the definition of persons. Next he seemed to say that employees weren't taxable because employee-employer contracts were covered by provincial legislation so employees were outside of federal jurisdiction and the feds had no right to tax provincially regulated income. However he was babbling so relentlessly that I couldn't really follow. Thirty-five years in the CRA enforcing the Income Tax Act didn't prepare me to face the onslaught of Russ! Statutes, sections, subsections, clauses, came gushing out in an unstoppable torrent! Then break so I buggered off. The jury had to watch it but I didn't. Pointless anyhow since, apparently unlike the seminar crowd,I was too dim to understand the brilliance of it all.

Post by **Burnaby49** » Mon Feb 15, 2016 3:06 am

Friday - February 12, 2016

On to the last day. I was expecting the day to start with Porisky giving his closing statements, an impassioned plea why he and Gould were just two human rights educators assiduously seeking the truth with no intent to defraud the fiscal. Not quite yet. Another delay. The parties were still fine tuning the judge's charges to the jury. The Crown was being very, very thorough.

Crown said that there was no instructions to the jury that P&G are not required to give evidence and no inference should be taken from their decision not to testify. Noted.

Judge should instruct jury that they should only decide on the basis of law as given by judge and no other source. Noted.

Crown made numerous suggestions on wording (evasion instead of fraud). I sort of dozed through the many fine-tuning points. The instructions are huge, paragraph 159 on page 35 was the last one I caught. Beats me how a jury can remember all this. P&G had, as usual, no comments. Then Judge said that court would be in session until 9:30 tonight. Maybe, but I won't be here. I already have plans to go pubbing this afternoon to either;

a) prematurely celebrate the defeat of the Paradigm Kingpin himself and get really drunk or
b) prematurely mourn the escape of the Paradigm Kingpin himself and get really drunk or
c) Just get drunk

Break time. Now, unfortunately I have to confess to the most abject, total, humiliating failure I've ever had as a Quatloos reporter. At break I heard Crown counsel say "I wonder what David Lindsay was doing in court today". WHAT? Didn't you see him, he was sitting behind you? David Kevin Lindsay was sitting right behind me and I didn't see him! This David Kevin Lindsay?

David-Kevin: Lindsay: The Unlicensed Man
viewtopic.php?f=48&t=10022

Debbie Anderson - Poriskyite Social Director on Trial
viewtopic.php?f=50&t=10747

Jean-Serge Brisson
viewtopic.php?f=50&t=10201

Yes, him. I went to the Brisson seminar almost solely to meet Lindsay and he was in the same courtroom today! My only excuse is that I was in the courtroom early and didn't look around at who was coming and going. He left before break. Counsel said she'd seen him when she came into the courthouse lobby this morning. He was arguing with the sheriffs and she heard him asking where courtroom 12 was. So I bailed on Porisky and scurried down to the basement to find Lindsay. Courtroom 12 was tiny, the smallest courtroom I've seen. The lobby outside of it was crowded with men hanging about, I'd say generally between ages 30 and 60. I had difficulty getting into the court because the door was completely blocked with more onlookers who couldn't get a seat. I pushed my way through them and got in but there were only 10 spectator seats, all taken. Lindsay was in one of them busily taking down notes. No room for me to even hang about so I went up to the court daily lists and got the name of case in courtroom 12 to check into later and then went back to Porisky. Public seating filled with girls. Looked early teens at best. They were commendably quiet. It was now 11:00 and court was adjourned yet again to 11:30. So I went hustled back to courtroom 12 less than a half hour after I'd left it. Lobby empty, nobody there, and the door closed with note "This courtroom is closed to the public". I'm guessing that the crowd got disruptive and were thrown out.

So I thought I'd go check on Michael Millar. This guy;

viewtopic.php?f=50&t=10834

When we'd last met Millar he wanted to schedule an all day session to berate the Crown for not telling him who or where he was. The judge agreed to set a day aside to try and get all his quibbling straightened out. Today was that day and I'd had to miss his hearing because of Porisky. So I went down to Millar's hearing to find the courtroom empty. Apparently the judge had stomped on him in the first hour or so and it was all over. So back yet again to Porisky.

This time things got moving. Before jury entered judge asked if any other business. Yes, Porisky had something to say to the judge. Finally, a comment from Russ! Then he just apologized for he and Gould giving a joint statement to the jury yesterday. Fine, no problem.

Time for the jury. Each juror was given a printed copy of the Judge's charges in a three-ring binder. Then judge and jury went through it with judge reading it out aloud after warning that if there were differences between what she said and what is in binder what she said is correct. That got revised later when she realized (I think the Crown noted it) that she'd made a mistake in the oral summary and the binder was correct.

I'll just give the basic important points as I heard them. I couldn't get most of it because the judge just drove through it reading verbatim and there was no way I could keep up.

- I am the sole judge of law and you must accept law from me without question. You cannot use other sources, either the Crown, Porisky and Gould or elsewhere.

- It is not my role to express guilt or innocence. You must base your decisions only on the evidence presented in this courtroom. You must disregard any guidance from TV, newspapers, internet commentators (Hi judge!) Face Book or elsewhere. I thought judge doing a great job of instructing on the role of a judge but all of the kids left after a few minutes.

- Presumption of innocence. Crown must prove beyond reasonable doubt. The burden of proof is on the Crown.

- Admissions. There were some admissions between parties. These must be taken as true.

- Judge went through evidence. Noted that the CRA summaries of evidence (schedules, spreadsheets, tax calculations etc.) not challenged by defendants. If you want to review Income Tax Act you will do so in open court.

- Explained the difference between direct and circumstantial evidence. You may rely on both. You can take each type of evidence into consideration. As an example did P&G have knowledge of the seized documents? They were seized from their home so you might assume that they were aware of them.

- Then the killer blow. Mistake in law. Judge instructed that certain mistakes may negate a willful evasion charge but persons holding a view of the law that believes that the income tax law does not apply to them is not a mistake. The theories presented in the Paradigm program cannot be used as a defense of mistake in law. I'd note that since Porisky made no defense at all he can't be assumed to have relied on either Paradigm or mistake in law.

- Did P&G have income in the relevant years for which taxes are payable? Long explanation of what income and expenses are in the Income Tax Act right down to how taxable income is determined. Judge noted that "income" is not defined in the Act and so is given it's normal usage. I was once told in a course why it isn't defined. Back in simpler days the government thought that it could put a definition of income in the Income Tax Act that would cover everything nicely. As soon as they did the best legal minds in the income tax legal community worked night and day to find ways that their clients could legally receive money which would be generally considered income but which was outside of the definition. As fast as the government plugged these loopholes tax lawyers and accountants thought up new ones. So the government gave up and took the definition out of the Act. Judge said "I instruct you as a matter of law that if the income calculated is les than the basic exemption then tax is not payable. If it exceed the basic exemption tax is payable. If P&G's income exceeded the basic amount did they voluntarily perform the Act of not filing returns beyond a reasonable doubt? Did P&G know that tax was imposed on them by the Act and did they attempt to avoid it?

- Judge stuck the knife in again. People can make mistakes however a mistake in law is not a defense, only a mistake about facts. What they believed about persons in the Income Tax Act and Contracts For Hire is irrelevant to determining guilt since these are not a defense to evasion.

- Willful blindness. Judge explained concept. Relates to knowledge. Does not inquire in order to determine proof. If P&G did not enquire from other then they can be considered to know beliefs wrong. If they knew or were willfully blind then Crown has proven intent even if they believed that they were right. If you conclude at this point that P&G knew, or should have known, that their actions deprived the government of revenue you must find them guilty.

Note - If you'll recall it was the Crown's position that the Paradigm system wasn't set up for the purpose of determining a legally correct interpretation of the provisions of the Income Tax Act but as a pre-made justification for people engaged in evasion or considering evading tax. It was essentially a backup excuse to use if they were caught to allow them to claim that they were innocent of the criminal charge of income tax evasion because they had studied the Paradigm system and believed it to be a valid interpretation of the Income Tax Act. The judge has now shut out that defense entirely for P&G as have past judges in other Poriskyite trials.

Then on to the GST (goods and services tax) evasion charges. I won't go into detail because they essentially mirror the income tax instructions. It turns out that this is where REOP (reasonable expectation of profit) comes in. I gave an explanation of the Stewart case in a prior day's posting and said how it ended the use of REOP for income tax issues. However it appears to be a valid concept for GST issues. As I understood what the judge said (could be wrong, I don't know GST and I was getting way behind at this point) If P&G had a reasonable expectation of profit then GST applied to them. Seems odd putting it that way but what do I know?

- In your deliberations you must ignore Porisky's statements in the videos that he is a natural person or his claims that he could structure his business to avoid GST tax. He had "GST not applicable" printed on his invoices but whether GST applies is not dependant on whether somebody says that it applies. It is determined by the Excise Tax Act.

I can see why judge and Crown so nitpicking about charges to jury. They are very detailed and the one thing that comes across is how they hem the jury in. They cut off possible defenses and they require the jury accept certain things as fact. They also say that if the jury makes certain findings based on the evidence they must find P&G guilty.

At this point the judge started discussing the four hallmarks of fraud but I couldn't keep up so I let that one go while I finished prior charges.

Then on to charge four in the indictment. Porisky counseling fraud.

- Crown does not need to prove that anyone committed fraud as a result of Porisky's service. Just that he counseled fraud. Did he counsel others to evade taxes through deceit, falsehoods, or other means?

- As a matter of law the material laid out in the Paradigm teachings is incorrect. You must reject this as being correct. Porisky's beliefs about the natural man and Contracts for Hire and Paradigm's belief that you could arrange your affairs to avoid tax are not a defense. Even if you believe that he believed in it that is still not a defense. If you decide that his actions were (I missed this part. I think believe that his actions were based on his Paradigm beliefs) you will have little difficulty in concluding that Porisky's actions would incite others to not pay tax.

At this point I gave up. I couldn't print legibly any more and even keep up with the bullet points. Fortunately she was almost done anyhow.

Next the judge summarized the closing statements of Porisky and Crown. She said this was oral only and not in the charges binders.

Crown - In counts 1 and 2 the Crown claims that P&G evaded income through Paradigm. Paradigm brought in over $1,000,000 in five years. They applied Paradigm beliefs and did not report any income and thereby evaded income tax.

In count three he evaded GST through fraud.

In count 4 Crown alleges that Porisky counseled fraud through the Paradigm alter ego. He did this through thirty educators and eight thousand students.

Porisky had said so little there was no need to summarize it so the judge quoted Porisky's comments verbatim and I got the line that eluded me yesterday. He said "We hope you endeavour to come to a conclusion that comes to the highest and best good. Thank you."

Then some housekeeping about how jury operated. Jury excused but judge said not to start deliberatio0ns until she queried Crown and Porisky if she'd missed anything or erred in charges. If so they would be called back. Jury and judge left and Crown worked away busily writing something up. The two Crown counsel were busy conferring about charges but Porisky and Gould just sat passively staring ahead of them. Seemed defeated. Crown told Sheriff a couple of comments to make to judge. Not many problems, misspoke a few times between text and oral instructions. One I'd noted myself even without a copy of the charges. Judge had left out "is guilty of an indictable offense" in one sentence. Not having the text I didn't know what was missing but the sentence, as spoken, was incomplete.

Jury was called back in but couldn't come because somebody was in the washroom. They eventually returned and judge made the corrections. Then she thanked the jury and told them not to start deliberations until after they'd had lunch. They would be given an hour and a half for this and then they would deliberate until 6:30 when they got another hour and a half for dinner. They would then continue until 9:30 then done for the day.

Crown - I have a question. Is their lunch together or separate? Together. And, at 1:30, we were done.

I had planned to go to the Red Burrito, a Mexican place I liked on Robson street for lunch before meeting my friend at the Moose pub at 3:00 but bailed on that to go to the court registry to pull the file for the case David Lindsay was attending. The Vancouver Supreme Court courthouse is so screwed up that it was faster for me to exit the building at the south end near our courtroom, walk all the way around the building and enter again from the north than it was to go to the registry internally. As I was at the northern entrance the entire jury came out escorted by a sheriff and walked past me heading off to lunch. Right behind them were the two Crown counsel and two CRA staff doing the same thing. I spent the next hour and a quarter in the registry and just had time for a burger at McDonalds before I started boozing. It turned out that the case was one that we've already touched on lightly in Quatloos so I'll post what I found in the registry later on that discussion.

So how'd my pubbing go? We have a policy of one beer in each pub then move on so we went to;

The Moose
The Morrissey
Yaletown Brewery
Red Racer
The Railway Club
Steamworks

Then home by 10:00 to find an email waiting for me saying that the jury had decided by 9:20 and found P&G guilty on all counts. Masses of evidence, complex tax law, over a hundred hours of video, four charges with two defendants, over thirty pages of judges instructions, and it took the jury less time to decide than I spent having an evening's pubbing. When you knock off the three hours for lunch and dinner they deliberated about five hours. That's impressive efficiency.

Jeffrey · Post by **Jeffrey** » Mon Feb 15, 2016 4:12 am

the jury had decided by 9:20 and found P&G guilty on all counts.

There's nothing on Google News about the conviction which is weird because there were plenty of articles about Porisky getting a re-trial.

At break I heard Crown counsel say "I wonder what David Lindsay was doing in court today".

They're so familiar with Lindsay that they recognize his face and remember his name?!

At this point the judge started discussing the four hallmarks of fraud but I couldn't keep up so I let that one go while I finished prior charges.

Sounds like it would be interesting to have heard.

Post by **Burnaby49** » Mon Feb 15, 2016 8:02 pm

Jeffrey wrote:
the jury had decided by 9:20 and found P&G guilty on all counts.
There's nothing on Google News about the conviction which is weird because there were plenty of articles about Porisky getting a re-trial.

At break I heard Crown counsel say "I wonder what David Lindsay was doing in court today".
They're so familiar with Lindsay that they recognize his face and remember his name?!

At this point the judge started discussing the four hallmarks of fraud but I couldn't keep up so I let that one go while I finished prior charges.
Sounds like it would be interesting to have heard.

Crown counsel recognized Lindsay because he made a fuss at one of Debbie Anderson's hearings trying to get the court's permission to represent her. Same Crown counsel in Anderson and Porisky.

I've checked Google and not a word about Portisky and Gould's convictions. It's like nobody but me has the slightest interest anymore, as if they are of no significance whatever in the Freeman/income tax world. Even the Canada Revenue Agency hasn't bothered to put them up on their scoreboard yet;

http://www.cra-arc.gc.ca/nwsrm/cnvctns/bc/menu-eng.html

Post by **notorial dissent** » Mon Feb 15, 2016 9:42 pm

I think Russ's problem is that he really is yesterdays news.

Post by **Burnaby49** » Sun Feb 21, 2016 1:18 am

The news is out about Porisky and Gould, I got it from an entirely reliable source, a bartender. It was a very pleasant day in Vancouver. That, in itself, is unusual. We've had one of the rainiest winters I can remember. So I took advantage of the weather to walk to my favorite brew-pub, Callister Brewing, maybe five miles or so from our house.

http://www.callisterbrewing.com/

I was sipping on a Dunkelweizen when the guy behind the bar said "I heard that they convicted those to tax evaders, the ones claiming they are natural persons. Huh? I've never told anyone there that I'm Burnaby49 on Quatloos or that I'm an ex tax auditor. I'm just an old guy swilling beer and rambling on about all the pubs he's been to in England. So I asked him "Do you mean Porisky and Gould?" Yes indeed, he'd heard it on the news today. He was befuddled how anyone could believe anything that stupid.

JurisEquity · Post by **JurisEquity** » Wed Feb 24, 2016 5:59 pm

Chilliwack couple convicted again in retrial of income tax evasion scheme

http://www.theprovince.com/news/chilliw ... story.html

Chilliwack couple convicted again in retrial of income tax evasion scheme
http://www.ottawacitizen.com/news/chill ... story.html

The sentencing is today.

Post by **Burnaby49** » Wed Feb 24, 2016 6:19 pm

JurisEquity wrote:Chilliwack couple convicted again in retrial of income tax evasion scheme

http://www.theprovince.com/news/chilliw ... story.html

Chilliwack couple convicted again in retrial of income tax evasion scheme
http://www.ottawacitizen.com/news/chill ... story.html

The sentencing is today.

Not today. If you check the Supreme Court of British Columbia's daily hearing list you'll find a dozen hearings scheduled for courtroom 71 at 2:00.

http://www.courts.gov.bc.ca/supreme_cou ... telist.pdf

Ten of them, including Porisky and Gould, have FXD beside the names which means "to fix a date". So it is just a hearing to schedule the sentencing hearing.

Post by **Burnaby49** » Wed May 25, 2016 8:00 am

We're in the home stretch; the sentencing hearing for Porisky and Gould was today (May 24th, date on posting is May 25th because I finished writing this at 1AM) and I was there. For reasons I'll explain they didn't end up getting sentenced but the next hearing will see it done. About half a dozen spectators apart from me. A bunch of young people, Porisky's family, and a CRA auditor, one of the Investigations staff who worked on the file.

Each side was to submit a sentencing submission, Crown to convince the court to give Porisky life without the option, Porisky to convince the judge he'd suffered enough and should walk. Crown went first. Counsel said she had voluminous materials to file and asked the judge if she'd seen the pre-sentencing report. No. It was provided last Friday but not yet made it to the judge. So we adjourned to allow the Crown to get photocopies of it to give to the judge.

This is a description of a pre-sentencing report;

Deciding on a Sentence

Sentencing decisions are made by the judge based on:
The law in relation to minimum and maximum sentences in the Criminal Code of Canada and Youth Criminal Justice Act
decisions of higher courts on similar cases.

Judges are also guided by decisions of other judges at the same or lower court levels. They may also consider the victim impact statement, witness statements and victim and witnesses’ testimony when determining the sentence.

Finally, the judge can also request a pre-sentence report. A pre-sentence report is prepared by a probation officer to help the court learn more about the person to be sentenced. The probation officer will usually speak to the person about their education and family background, health concerns and prior convictions. The probation officer may also contact the offender’s family and friends or any other people suggested by the offender who may be able to help the court understand the person and their situation.

Copies of the report will be sent directly to the court, Crown counsel and defence counsel before the sentencing hearing.

http://www2.gov.bc.ca/gov/content/justi ... g-sentence

Judge back in ten minutes. The sound was actually very good for once and I heard everything clearly. A good thing too since courtroom 53 is huge. I've been to two jury selections in it and it can uncomfortably hold over 100 people.

The Crown had a fourteen page submission on sentencing. There were five cases attached. Meads v Meads, the star of the show, wasn't one of them. Not surprising since it's 188 pages. Crown said she had a chart outlining all of the Paradigm students and educators. She took the judge through the Crown's written submission covering the sentencing recommendations for Porisky's tax and GST evasion convictions and his counseling fraud conviction. Gould only had an income tax evasion conviction.

First Porisky's evasion sentencing. Crown was seeking minimum fine of 100% of taxes evaded. The Crown had presented schedules to the jury showing the CRA's calculations and counsel said the judge should accept the Crown's submission on taxes evaded. This would result in a fine of $193,330 for Porisky for income taxes evaded and $38,241 for Gould. In addition, in relation to count three, GST evaded, Porisky should pay a fine of $66,149 for 100% of GST evaded. Crown said that jail sentences were appropriate for both Porisky and Gould.

First Gould. Crown wants six month jail term. However since she already served this as a conditional sentence after her first trial Crown only want one day of actual jail. To those of you not following the story Porisky and Gould were convicted and sentenced on exactly the same offenses in 2012. Here is the decision;

R. v. Porisky & Gould, 2012 BCSC 67
http://canlii.ca/t/fppg9

The trial had been by judge only. Porisky appealed this. One of his basis for appeal was that he had not been given the right to a jury trial. In what I consider to be a very poorly thought-out decision the British Columbia Court of Appeal agreed with him, quashed the convictions of both Porisky and Gould, and ordered a retrial. That was what we just finished. Lot of good it did them.

As a result of the first trial both Porisky and Gould served some of their sentences before getting an interim release pending their appeal decision. Since Gould served a longer sentence that the one Crown was now asking the court to impose on her she would only serve one symbolic day even if the court agreed with Crown's submission.

In respect to Porisky the Crown wanted eighteen months on each of the three evasion convictions to be served concurrently. However Crown wanted him hit with four years on the counseling conviction to be served consecutively after the evasion sentences. He'd spent 202 days in custody after his prior convictions before his interim release and Crown conceded that he should get a 2 for 1 credit on that for a total of 404 days served.

The maximum sentence for counseling fraud is one half the maximum sentence for being convicted of fraud which is fourteen years. So Porisky faced a possible maximum of seven years.

Crown ran through aggravating and mitigating factors that the judge should consider. However, before I report them, I'll confess to an abject failure on my part. Crown went through her presentation at a relentless pace for an hour and a half less a break. There was no way I cold keep up so what you read is what I could scribble down of the deluge. It gives a sense, but not the details, of the Crown's presentation. I believe that the Crown's submission is a public document and I'll try and get a copy. Till then you have to be satisfied with the following.

Aggravating - Nature and gravity of offenses. Deliberate acts. Duration of time they occurred. Crown discussed Meads v Meads. This is Meads;

Meads v. Meads, 2012 ABQB 571
http://canlii.ca/t/fsvjq

Crown - Meads can only be described as a treatise, basically a library on caselaw. Porisky's scheme falls squarely in the parameters of the OPCA offenses as described in Meads.

This was a very large and sophisticated scheme.

Degree of responsibility of offenders - Porisky was the mastermind of the Paradigm scheme. He continued it even after he knew his students were being pursued by the CRA for civil and criminal investigations.

Effect on community - There were approximately 800 Paradigm students and 30 educators.

Almost no mitigating factors Neither Porisky or Gould face family circumstance that would mitigate proposed jail terms. At the time of the prior trial they had two dependant children but this has changed. In any case since Gould has been recommended for very little jail time there is no problem regarding Porisky serving a sentence. There are indications of financial insecurity faced by Porisky and Gould but this has been brought on by their own actions.

Their decision to stop paying taxes was deliberate and continuous. He left his employment to pursue this. Crown discussed how the entire Paradigm scheme was just window dressing for tax evasion. This was a fall-back excuse to evade evasion charges if they were caught by claiming they had no mens rea.

Mens Rea. As an element of criminal responsibility, a guilty mind; a guilty or wrongful purpose; a criminal intent. Guilty knowledge and wilfulness. A fundamental principle of Criminal Law is that a crime consists of both a mental and a physical element.

Paradigm teachings were the antithesis to the rule of law. Porisky's culpability is high because his home was full of caselaw that accurately showed he was wrong but this was ignored. He has a very high moral culpability.

Deterrence is necessary to do more than just eliminate his profits through a fine. A jail sentence for tax evasion is necessary for deterrence. The probation officer commented on both defendants in the pre-sentencing report under "Attitude and Understanding" where they denied any guilt to probation officer although convicted twice on the same offenses.

Eighteen months for Porisky would be the same sentence as Eva Sydel. Porisky testified at the Sydel trial and published an extensive analysis of the result but his continuing to evade after her conviction requires at least the same sentence as Sydel as a minimum sentence.

I first wrote about Sydel here;

viewtopic.php?f=50&t=7827#p131049

A real true believer. A dentist who essentially destroyed her life following Paradigm. She lost her practice, was estranged from her family, and went on into a relentless pursuit of justice in increasingly bizarre court cases where she claimed conspiracies by Jews, masons, the CRA, judges, everybody was out to get her.

This was the decision on her tax evasion charges

R. v. Sydel, 2006 BCPC 346
http://canlii.ca/t/1p2m1

Not exactly good news for Porisky because it totally rejected all of Paradigm's claims. So Russ, as damage control, came up with a 56 page document showing why Judge Meyers was wrong in convicting Sydel. This is Porisky's analysis;

http://www.mediafire.com/download/4968k ... sion.pdf#!

Note that Sydel was convicted in mid 2006 but Paradigm continued for at least two more years after Russ cooked up his analysis showing that he was still right notwithstanding Sydel's unfortunate conviction.

Back to Crown - The Crown was seeking to impose, by court order, a payment plan on the fine. The Crown made no submission on the amount in the payments or the time to pay under the plan. They asked for a clause that the whole unpaid sum became due immediately if a payment was missed.

The bulk of the prior part of the submission related to Porisky's tax evasion conviction. Now the Crown moved on th the counseling fraud conviction calling this the "heart of the sentencing". Parliament views large-scale fraud seriously. Crown wanted the counseling sentence consecutive to the evasion sentence because they were two separate issues that could have been done separately to the exclusion of the other. So they were not linked.

Nature and gravity of fraud offense - Videos describe how he was acquitted of charges in the 1990's. He touted that experience to show the credibility of the Paradigm scheme and used it for marketing purposes. The making of a court order that he was a natural person gave rise to the whole Paradigm scheme. He devised the entire scheme. Overall aim was to evidence lack of mens rea on part of students. This aspect was not stressed in the prior decision, these submissions differ on that. A ballpark figure on amount of tax evaded from counseling can be determined from the known sentencing decisions of counselors and students. While there were 800 students and 30 counselors there are 31 known decisions based on the Paradigm scheme. We calculate $4,500,000 of taxes evaded from these 31 decisions.

I discussed the 1999 case that Porisky won to some extent here;

viewtopic.php?f=50&t=10485

where I said about Russ getting off;

He actually got off of this one. Absolutely nothing to do with how he presented his case. He was charged with not filing his 1994 to 1997 income tax returns but the judge wasn't convince that the Crown had done a thorough enough search to prove he hadn't filed. The CRA had checked the records in the Vancouver and Burnaby-Fraser tax offices, the two possible offices where somebody like Russ, who lived in Chilliwack B. C., would be assumed to have filed his returns. But judge said they hadn't checked every tax office in Canada. Who knows, a local Vancouver area carpenter might have flown to Montreal or Halifax, filed there, and flown home. It's possible! So Russ was acquitted. I assume this only encouraged him.

The comment about him being a natural person may have come up in this transcript. I'm not going though it this late at night to check. I have to be up early for yet another court hearing. The Poriskyite trials are relentless.

http://www.mediafire.com/download/zz892 ... 000%29.pdf

Back to Crown;

Responsibility - Porisky acted in a very deliberate manner. He said himself that he had a choice. He sought his own scheme to hamper Crown's ability to collect tax and he bears all of the responsibility for the scheme. The high point was his analysis of Judge Murphy in the Sydel decision. This was not surprising since his livelihood was at stake. He persisted even when his followers were in trouble. This high level of moral culpability needs high deterrence.

His pre-sentencing report shows that he is still defying the court and the CRA. His only regrets in the report are the stress of his financial insecurity and as a result of his convictions.

Break. Crown resumed;

Effect on community - Impact cannot be overstated. The impact on the people involved on being in the criminal justice system Scope of fraud incredibly high. Crown referred to paragraph 70 in Meads and read this out verbatim;

[70] These Reasons in many instances identify reported caselaw that comments on OPCA litigants, OPCA gurus, and their misconduct. It should be understood that the reported caselaw is the proverbial tip of the iceberg. The vast majority of encounters between this Court and OPCA litigants are not reported. These litigants and their schemes have been encountered in almost all areas of law. They appear in chambers, in criminal proceedings, initiate civil litigation based on illusionary OPCA rights, attempt to evade court and state authority with procedural and defence-based schemes, and interfere with unrelated matters.

[71] OPCA strategies as brought before this Court have proven disruptive, inflict unnecessary expenses on other parties, and are ultimately harmful to the persons who appear in court and attempt to invoke these vexatious strategies. Because of the nonsense they argue, OPCA litigants are invariably unsuccessful and their positions dismissed, typically without written reasons. Nevertheless, their litigation abuse continues. The growing volume of this kind of vexatious litigation is a reason why these Reasons suggest a strong response to curb this misconduct.

[72] Beyond that, these are little more than scams that abuse legal processes. As this Court now recognizes that these schemes are intended for that purpose, a strict approach is appropriate when the Court responds to persons who purposefully say they stand outside the rules and law, or who intend to abuse, disrupt, and ultimately break the legal processes that govern conduct in Canada. The persons who advance these schemes, and particularly those who market and sell these concepts as commercial products, are parasites that must be stopped.

[73] A critical first point is an appreciation that the concepts discussed in these Reasons are frequently a commercial product, designed, promoted, and sold by a community of individuals, whom I refer to as “gurus”. Gurus claim that their techniques provide easy rewards – one does not have to pay tax, child and spousal support payments, or pay attention to traffic laws. There are allegedly secret but accessible bank accounts that contain nearly unlimited funds, if you know the trick to unlock their gates. You can transform a bill into a cheque with a stamp and some coloured writing. You are only subject to criminal sanction if you agree to be subject to criminal sanction. You can make yourself independent of any state obligation if you so desire, and unilaterally force and enforce demands on other persons, institutions, and the state. All this is a consequence of the fact gurus proclaim they know secret principles and law, hidden from the public, but binding on the state, courts, and individuals.

[74] And all these “secrets” can be yours, for small payment to the guru.

Crown commented on paragraph 87 of Meads which covered the Paradigm scheme and the "good slave" comment in paragraph 91. This is what Meads said about Porisky and Paradigm;

1. Russell Porisky and the Paradigm Education Group

[87] Typically, this Court has learned about gurus and their activities from the perspective of an outside observer. For example, in court, justices see litigants identify certain persons who provide assistance or guidance to an OPCA litigant. Some gurus have appeared before justices of this Court and have directed (or appear to direct) the OPCA litigant’s conduct, or attempt to represent the OPCA litigant.

[88] Recently, a more complete window into the operations of an OPCA guru and his customer base has been provided by the trial and conviction (R. v. Porisky, 2012 BCSC 67 (CanLII), 2012 D.T.C. 5037 [“Porisky Trial Decision”]) and sentencing (R. v. Porisky, 2012 BCSC 771 (CanLII) [“Porisky Sentencing Decision”]) of Russell Porisky and Elaine Gould for tax evasion and counseling others to commit fraud. R. v. Sydel, 2006 BCPC 346 (CanLII) also reports on the Porisky operation but from the perspective of one customer, a dentist. These cases provide many details on how an OPCA scheme operates.

[89] Porisky operated a business, named “The Paradigm Education Group”, that advanced a concept that it was possible for a potential taxpayer to:

... structure their affairs so that they were a “natural person, working in his own capacity, under a private contract, for his own benefit”. Paradigm taught that money earned under this arrangement was exempt from income tax.

(Porisky Trial Decision, at para. 1)

[90] Porisky claimed this was in response to a banking conspiracy:

He founded what he eventually called The Paradigm Education Group to “create a structure that everyone could work together in to save the country from a foreign parasite”. The foreign parasites were the international bankers who were, directly or indirectly, responsible for the income tax system.

(Porisky Trial Decision, at para. 38)

[91] Porisky taught that the Canada Revenue Agency had tricked persons into believing there was an obligation to pay tax, and further that taxation is slavery, serfdom, and contrary to the Canadian Bill of Rights: para. 111. Justice Myers helpfully isolates representative examples of the alternative reality and rhetoric Porisky directed to his customers in the Appendix to the trial decision. It is typical that a guru will frame his or her arguments in a conspiratorial context, and claim that the potential customer has been cheated. The state is an enemy and oppressive. A few sample passages illustrate Porisky’s perspective on the world:

... When I was a good slave I dismissed my thoughts because I was taught that I was incapable of understanding the superior wisdom of my elected officials. The more I studied though, the freer my mind grew and the clearer it became. They never had some kind of superior wisdom as I had been taught, in fact it became painfully clear that many of them could not or would not even think for themselves ...

...

As far as propaganda goes, the “National Post” article was a great textbook example of promoting a victim mentality. It seems to stimulate sympathy for our poor federal government, while painting everyone who doesn’t submit to their national plundering program as a criminal. Nevertheless, it was a great read, I laughed, I cried and I’ll definitely want to read it again when I feel like being shamed into feeling that I should waive my natural rights so our government can keep its trough full enough to ensure their fiscal mismanagement can continue unabated.

...

This mental shift toward total government dependence is what will allow the implementation of the banker’s ultimate agenda, a New World Order run by a One World Government that they control.

...

... The choice is yours, but consider this, ignorance may be bliss, but it costs you plenty.

[92] I will not review the basis on why Porisky’s “natural person” scheme is incorrect, as this question is thoroughly dissected in reported cases including: R. v. Klundert, 2008 ONCA 767 (CanLII) at para. 19, 93 O.R. (3d) 81, leave denied [2008] S.C.C.A. No. 522; R. v. Lindsay, 2011 BCCA 99 (CanLII) at para. 27, 302 B.C.A.C. 76, leave refused [2011] S.C.C.A. No. 265; R. v. Pinno, 2002 SKPC 118 (CanLII) at paras. 12-13, 15-16, [2003] 3 C.T.C. 308; Kennedy v. Canada (Customs and Revenue Agency), 2000 CanLII 22837 (ON SC), [2000] 4 C.T.C. 186, 2000 D.T.C. 6524 (Ont. Sup. Ct. J.); and Porisky Trial Decision at paras. 58-61.

[93] Porisky and Paradigm advanced this scheme on a commercial basis. Porisky operated a website, and sold instructional materials such as books and DVDs: Porisky Trial Decision, at para. 39. Porisky also conducted seminars where he changed a fee (at para. 39), and provided levels of training and exams (at paras. 101�105). Paradigm operated as something of a pyramid scheme; Porisky also qualified “educators” to further proselytize his approach: Porisky Trial Decision, at paras. 39, 106. At least one of these educators is now also the subject of criminal litigation: R. v. Lawson, 2012 BCSC 356 (CanLII), at para. 21, as are other participants in the Porisky tax evasion ring: R. v. McCartie, 2012 BCSC 928 (CanLII). Many other persons who used Porisky’s techniques have already been convicted of tax evasion: Porisky Trial Decision, at para. 63.

[94] Additionally, and in what can only be described as an exercise in pure arrogance, Porisky demanded 7% of the next two years income from his subscribers in exchange for his or his educator’s assistance: Porisky Trial Decision, at para. 40. The tax liberator had become a tax collector.

[95] The pseudolegal basis for Porisky’s claims is very representative of how OPCA arguments are rationalized and explained by their proponents. Statutes, caselaw (often foreign or obsolete), legal platitudes and definitions (again often foreign or obsolete), political ideology, and conspiracy, were strung together into a loose cloud that pointed to a desired result. Justice Myers eloquently described this process at para. 67 of the trial decision:

Mr. Porisky’s analysis picks and chooses snippets from various statutes and cases, and attempts to create logical links where none exist. It is, in effect, legal numerology.

[96] It is important at this point to again stress the audience for Porisky’s ideas. That was not the courts, government actors, but his clientele. What mattered was that his customer base believe and then pay for his services.

[97] Porisky was convicted and sentenced for having personally evaded taxes, and having aided and abetted the evasion of income tax. Justice Myers rejected a disclaimer by Porisky that his ideas, materials, and advice were for “educational purposes only”: Porisky Trial Decision, at para. 98. Porisky had gone so far as to prepare (unsuccessful) legal arguments for one of his clients who had been sued for tax evasion. Porisky then analyzed that result, and told his subscribers why the client’s conviction was “ambiguous” and “... just another desperately needed bowl of propaganda pabulum for public consumption, to keep the masses asleep and enslaved ...” [sic]: paras. 118�121.

[98] In total, Porisky’s guru activities led to substantial tax evasion, which was difficult to quantify with precision: Porisky Sentencing Decision, at paras. 38�40. He had approximately 800 “students” who applied his scheme: at para. 40. A 4.5 year prison sentence was ordered: para. 57.

In Crown's submission there is no question that the intent was to draw people into an OPCA scheme. Community impact more broad than in Knox Contracting decision.

This is the Knox Contracting decision, a Supreme Court of Canada case. I'm not going to analyze it but if readers are in the mood, go nuts!

Knox Contracting Ltd. v. Canada, [1990] 2 SCR 338, 1990 CanLII 71
http://canlii.ca/t/1fstz

The Crown cited these paragraphs from Knox;

It is fitting and appropriate that the s. 239 offences be considered as criminal law. The Income Tax Act is a major source of funds for the federal government. Its provisions are applicable to most adult Canadians. The vast majority pay their income tax by way of payroll deduction with little or no opportunity for evasion or misstatement. Those who do evade the payment of income tax not only cheat the State of what is owing to it, but inevitably increase the burden placed upon the honest taxpayers. It is ironic that those who evade payment of taxes think nothing of availing themselves of the innumerable services which the State provides by means of taxes collected from others.

The entire system of levying and collecting income tax is dependent upon the integrity of the taxpayer in reporting and assessing income. If the system is to work, the returns must be honestly completed. All taxpayers have the right to know that it is a criminal violation to commit any of the offences described in s. 239. The Act imposes a public duty. A breach of that fundamentally important public duty should constitute a criminal offence.

This was a seminal case. Not only were taxes diverted through Porisky's scheme there was an increased need for expenditures by both the CRA and Justice.

Prior cases had conditional sentence orders (essentially jailed at home) for evaders and jail time for counseling. Crown went through range of prior counseling jail terms. One counselor who did not get a jail term imposed had special circumstances because he was caring for a wife with brain cancer.

Porisky's recalcitrance and continued belief call for a higher sentence. There has been a reduction in mitigating circumstances since the first trial plus an increase in the understanding of the OPCA phenomena since the last trial. Then a bit of a general speech about deterrence and done.

Crown asked that, as part of court order, a DNA sample be required. Crown was also seeking forfeiture of all property made under the scheme. They also wanted instructions on the return of materials seized. Porisky and Gould had no position on this and the Crown wanted the forfeiture of all Paradigm material.

Judge asked Porisky and Gould if they wanted time to consider the preceding or continue. If they wanted time we'd break for lunch. They wanted to continue. Their submissions were admirably terse and to the point;

Gould - I would like to leave this to your discretion.

Porisky - I also would like to leave this to your discretion.

And that was it from them. Judge said that given the material she'd been given "I can't decide now so we will have to reconvene for sentencing." Judge was out of town on another case for the next month or so but she wanted to be personally available to impose sentences so the parties got together and decided that they could all make the end of July. So judge said that she would give her reasons for sentences and the sentences on July 29th, 10:00, this courthouse. And done by noon.

So I went down the street to the Moose and had an order of wings and a Goose Island Honkers Ale. I know it seems like I'm at the Moose at every opportunity but I blame the court. They keep scheduling these hearings for Tuesday when a full order of excellent wings is on for half price, $3.00. So I took my time and enjoyed lunch. Tomorrow I'll probably be back at the Ovaltine Cafe.

This time I didn't make the same boozy mistake as yesterday. I had an iconic Vancouver lunch, corned beef hash and coffee at the Ovaltine Cafe, just down the block from the courthouse. The Ovaltine is virtually unchanged, inside and out, since its opening in 1942 and is a Vancouver landmark. One of the very few classic 1930's and WWII greasy spoons left in Vancouver.

It still has its original neon sign from 1942.

I always sit at the counter just behind where the new owners are standing

viewtopic.php?f=50&t=11111&p=228057#p228057

Post by **notorial dissent** » Wed May 25, 2016 1:02 pm

The Moose and Ovaltine, neat building too, sound like really nice places for a downtown snack. Hey, good half price wings is a good thing.

Post by **Burnaby49** » Fri Jul 29, 2016 8:01 pm

Russell Porisky and Elaine Gould were sentenced this morning and I, of course, was there. I'll do a full posting on it today but for the moment I'll just give the sentences and do the colour commentary later.

Both Porisky and Gould were charged and convicted on income tax evasion in 2012. Porisky was also charged and convicted on counseling tax evasion. They both appealed and had their convictions overturned and a retrial ordered. They were tried on the same charges as 2012 and again convicted on all charges. The 2012 trial was by judge only, their 2016 trial was by jury. Today was sentencing on their recent convictions.

Sentences

Elaine Gould - Six months for tax evasion. In addition the minimum fine of 100% of income tax and GST evaded. This was $38,141. Gould was given credit for the six months she'd served on her original 2012 convictions. So she was sentenced to one day in jail to be served immediately.

Russell Porisky - He was given an eighteen month jail sentence for income tax evasion and a four year jail sentence for counseling income tax and GST evasion. Sentences to be consecutive. He was given credit for 404 days served. This was twice the 202 days he actually served after his 2012 conviction before he was released after his successful appeal. In addition he was fined the minimum 100% of income tax and GST evaded of $193,333. He was also required to give a DNA sample. Jail sentence to start immediately.

Court ordered that all fraud related property to be forfeited. Judge declined to waive victim surcharge. Fines to be paid in 24 months. Payment schedule to be arranged.

Astute followers of Porisky's saga will note that he had been originally sentenced to a four year jail term in 2012. Today the judge increased this by eighteen months. She said that Justice Myers, the 2012 trial judge, did not have the benefit of the information that was now available on the size and seriousness of the Paradigm tax evasion scheme or the extent of Porisky's culpability. Since the 2012 trial there have been a large number of convictions of Paradigm students and educators and a much better understanding of the amount of tax that Porisky's followers attempted to evade. This warranted a greater sentence than that originally imposed.

The judge placed considerable weight on the fact that Porisky kept the Paradigm scheme going even after his followers were being pursued, civilly and criminally, by the CRA. She felt that this increased his culpability by leading people on when it was clear that the Paradigm scheme did not work.

Dr. Caligari · Post by **Dr. Caligari** » Fri Jul 29, 2016 8:51 pm

Astute followers of Porisky's saga will note that he had been originally sentenced to a four year jail term in 2012. Today the judge increased this by eighteen months.

If the sentences are concurrent, how is this an increase?

Post by **Burnaby49** » Fri Jul 29, 2016 9:09 pm

Dr. Caligari wrote:
Astute followers of Porisky's saga will note that he had been originally sentenced to a four year jail term in 2012. Today the judge increased this by eighteen months.
If the sentences are concurrent, how is this an increase?

My mistake! I meant consecutive. I'll change it.

Post by **Burnaby49** » Sat Jul 30, 2016 1:23 am

Finally sentencing. Porisky's family was here, I assume five of their seven children, all adults. This time two sheriffs, there were three after the sentence was read. Only one Crown counsel instead of the usual two.

Judge had written reasons which I assume will be released soon. She took about 45 minutes to read them out in court. Since she moved briskly from a prepared document there was no way I could keep up with all of it so I skipped a lot of the boilerplate, case citations, history, things that I can check when the decision is on CANLii.

The judge listed the offenses. You can read them here;

viewtopic.php?f=50&t=10485&start=20#p222626

The judge listed the penalties under the Income Tax Act for the various tax evasion convictions. This is the section covering tax evasion. Both Gould and Porisky were charged under this section;

239 (1) Every person who has

(a) made, or participated in, assented to or acquiesced in the making of, false or deceptive statements in a return, certificate, statement or answer filed or made as required by or under this Act or a regulation,

(b) to evade payment of a tax imposed by this Act, destroyed, altered, mutilated, secreted or otherwise disposed of the records or books of account of a taxpayer,

(c) made, or assented to or acquiesced in the making of, false or deceptive entries, or omitted, or assented to or acquiesced in the omission, to enter a material particular, in records or books of account of a taxpayer,

(d) wilfully, in any manner, evaded or attempted to evade compliance with this Act or payment of taxes imposed by this Act, or

(e) conspired with any person to commit an offence described in paragraphs 239(1)(a) to 239(1)(d),

is guilty of an offence and, in addition to any penalty otherwise provided, is liable on summary conviction to

(f) a fine of not less than 50%, and not more than 200%, of the amount of the tax that was sought to be evaded, or

(g) both the fine described in paragraph 239(1)(f) and imprisonment for a term not exceeding 2 years.

Prosecution on indictment

(2) Every person who is charged with an offence described in subsection 239(1) or 239(1.1) may, at the election of the Attorney General of Canada, be prosecuted on indictment and, if convicted, is, in addition to any penalty otherwise provided, liable to

(a) a fine of not less than 100% and not more than 200% of

(i) where the offence is described in subsection 239(1), the amount of the tax that was sought to be evaded, and

(ii) where the offence is described in subsection 239(1.1), the amount by which the amount of the refund or credit obtained or claimed exceeds the amount, if any, of the refund or credit to which the person or other person, as the case may be, is entitled; and

(b) imprisonment for a term not exceeding 5 years.

This is the section under the Excise Tax Act that they were charged under;

327 (1) Every person who has

(a) made, or participated in, assented to or acquiesced in the making of, false or deceptive statements in a return, application, certificate, statement, document or answer filed or made as required by or under this Part or the regulations made under this Part,

(b) for the purpose of evading payment or remittance of any tax or net tax payable under this Part, or obtaining a refund or rebate to which the person is not entitled under this Part,

(i) destroyed, altered, mutilated, secreted or otherwise disposed of any documents of a person, or

(ii) made, or assented to or acquiesced in the making of, false or deceptive entries, or omitted, or assented to or acquiesced in the omission, to enter a material particular in the documents of a person,

(c) wilfully, in any manner, evaded or attempted to evade compliance with this Part or payment or remittance of tax or net tax imposed under this Part,

(d) wilfully, in any manner, obtained or attempted to obtain a rebate or refund to which the person is not entitled under this Part, or

(e) conspired with any person to commit an offence described in any of paragraphs (a) to (c),

is guilty of an offence and, in addition to any penalty otherwise provided, is liable on summary conviction to

(f) a fine of not less than 50%, and not more than 200%, of the amount of the tax or net tax that was sought to be evaded, or of the rebate or refund sought, or, where the amount that was sought to be evaded cannot be ascertained, a fine of not less than $1,000 and not more than $25,000, or

(g) both a fine referred to in paragraph (f) and imprisonment for a term not exceeding two years.

(2) Every person who is charged with an offence described in subsection (1) may, at the election of the Attorney General of Canada, be prosecuted on indictment and, if convicted, is, in addition to any penalty otherwise provided, liable to

(a) a fine of not less than 100%, and not more than 200%, of the amount of the tax or net tax that was sought to be evaded, or of the rebate or refund sought, or, where the amount that was sought to be evaded cannot be ascertained, a fine of not less than $2,000 and not more than $25,000, or

(b) both a fine referred to in paragraph (a) and imprisonment for a term not exceeding five years.

And this is the section of the Canadian Criminal Code covering counseling fraud. Porisky was charged under this section;

Counselling offence that is not committed

464 Except where otherwise expressly provided by law, the following provisions apply in respect of persons who counsel other persons to commit offences, namely,

(a) every one who counsels another person to commit an indictable offence is, if the offence is not committed, guilty of an indictable offence and liable to the same punishment to which a person who attempts to commit that offence is liable; and

(b) every one who counsels another person to commit an offence punishable on summary conviction is, if the offence is not committed, guilty of an offence punishable on summary conviction.

This is how Wikipedia describes indictable offenses in Canada;

In many common law jurisdictions (e.g., England and Wales, Ireland, Canada, Hong Kong, India, Australia, New Zealand, Malaysia, Singapore), an indictable offence is an offence which can only be tried on an indictment after a preliminary hearing to determine whether there is a prima facie case to answer or by a grand jury (in contrast to a summary offence). In the United States, a crime of similar severity and rules is called a felony, which also requires an indictment.

Since Porisky and Gould were both charged with indictable offenses the maximum penalties applied.

Judge said that that they were convicted on a jury trial so deciding on the facts to base sentencing was up to the judge. All of the offenses related to Paradigm, the "brainchild" of Mr. Porisky. He set up an organization to teach others to defraud the government of Canada and to evade income tax and GST. He did this through educators, a website, educational materials, and seminars. Porisky and Gould derived their income from educators and students. The material seized demonstrated that Porisky taught the Paradigm theory on a large scale with at least 30 educators and 800 students. His nonsensical scheme lacked common sense. Describing the Paradigm scheme is logically impossible and this gave credence to it (I assume that she meant that it was so complex sounding that income tax neophytes were impressed with how authoritative it sounded and didn't realize that it was just worthless gibberish). Judge ran through the basics of the scheme, very basic. Mr. Porisky's tortured logic taught that money was exempt from tax. His nonsensical theory taught that the Crown would be frustrated in proving fraud because of a claimed honest intent to follow the law. Judge said that a history of Porisky and Gould's activities was given in the Crown's submission.

The Crown referred to both videos and written materials in their submission. Porisky touted his 1990 win to give himself credibility. It is impossible to precisely calculate the amount defrauded through Porisky's scheme. Judge said that these was an estimate of $11,500,000.

Note - I wrote that the judge said 1990 but I'm not aware of a 1990 case. He did have a 2000 win and I'm guessing the court was referring to that. He got off on a failure to file tax returns charge on a technicality. As I said in a prior posting;

To get started here are the transcripts from his very first tax trial, back in 1999. Failing to file tax returns. He was employing his "I'm not me" dual personality defence routine even then:

.........

He actually got off of this one. Absolutely nothing to do with how he presented his case. He was charged with not filing his 1994 to 1997 income tax returns but the judge wasn't convince that the Crown had done a thorough enough search to prove he hadn't filed. The CRA had checked the records in the Vancouver and Burnaby-Fraser tax offices, the two possible offices where somebody like Russ, who lived in Chilliwack B. C., would be assumed to have filed his returns. But judge said they hadn't checked every tax office in Canada. Who knows, a local Vancouver area carpenter might have flown to Montreal or Halifax, filed there, and flown home. It's possible! So Russ was acquitted. I assume this only encouraged him.

You can read this yourselves in the transcript of the hearing on page 84;

http://www.mediafire.com/view/zz8928b82 ... _1999-2000

The judge said that there were 31 known Poriskyite sentencing decisions. Neither Porisky or Gould made submissions or gave evidence at their trial. Judge went through a pre-sentencing statement prepared by their probation officer. They have seven children, all by previous marriages. Gould served a six month provisional sentence in 2012. Porisky is 57 (I think she said 57) and started Paradigm in 2002. They are in financial difficulty because of costs associated with the court matters and custody and is earning less in construction than he did in the past (he is a carpenter when he's not Canada's top tax expert). Porisky said that he attempted to work with the CRA on his tax issues. He served some time in 2012.

Position of Parties

Crown - Given Porisky and Gould's financial circumstances Crown recommended for both that the court impose the minimum fine of 100% of tax and GST evaded. Crown recommended Porisky be given eighteen months concurrent penal sentences for charges 1, 2 and 3, the tax evasion charges. Crown recommended four years for the counseling fraud charge to be consecutive to the eighteen month evasion sentences for a total of five and a half years. This to be reduced by 404 days to give him double time for the 202 days served in 2012. Crown recommended that Gould be given six months. Since she had already served a six month conditional sentence on these charges Crown recommended one day in jail for her.

Defense - Defense made no submissions in respect to sentencing.

Judge agreed with the minimum fines. This left the jail time to consider. For guidance the Judge went through the same cases that Justice Meyers had reviewed when he sentenced Porisky and Gould in 2012. I didn't bother to note them, they will be in the published decision.

The judge said that she was not bound by Judge Meyers' decision on sentencing. There had been new information on the Paradigm scheme since the 2012 trial. The amount of the fraud was clearer now and the extent of the resources expended by the CRA to respond to this was much greater than Meyers could have known.

The Crown had listed alleviating and mitigating circumstances. Judge said that Porisky and Gould's financial problems were not mitigating factors because they were caused by their offenses. A lot of aggravating circumstances I couldn't get down. I'll get it later when decision is released. The Crown commented on Porisky's analysis of the Sydel decision. Eva Sydel was one of the first Paradigm criminal convictions and Porisky put out an extensive paper after the decision showing why the judge was wrong and he was right. This is his 56 page paper refuting Judge Meyers' legal analysis in the Sydel conviction;

http://www.mediafire.com/view/4968k522c ... cision.pdf

Judge said that he had a high degree of moral culpability. He continued running Paradigm even after his followers were convicted. Denunciation and deterrence wee the main principles of sentencing the judge considered. Judge considered, as aggravating factors, that this was a large sophisticated multi-year enterprise. Porisky was the mastermind (judge's word) and both continued after knowing about the CRA criminal and civil pursuit of their students and educators.

Judge said that she agreed with the Crown that jail time was necessary for both. The offenses were grave. The judge accepted the Crown's sentencing recommendations regarding the fines and jail sentences.

She told Gould to stand. She said that she was accepting the Crown's recommendations on the fine and jail term and a $38,141 fine. Jail term netted out to one day with time served.

Then she told Porisky to stand. She said that his moral culpability was higher than any Poriskyite (my word) yet convicted. His counseling fraud was extensive so the sentence imposed by judge Meyers no longer fit. So she gave him a cumulative jail time of five and a half years. Four years counseling fraud and eighteen months for tax evasion to be served consecutively. She impose a $193,333 fine. By this time there were three sheriffs.

Judge said that she gave the following ancillary orders. Porisky was to give a DNA sample. Crown had requested this and judge agreed.

Additionally the judge ordered the forfeiture of all fraud related property seized. She imposed the victim surcharge on Porisky. She asked if anything further.

Crown requested guidance on fines. What time is to be given to pay them? Judge said 24 months in monthly installments with an acceleration clause making it all due if a payment was missed.

Neither Porisky or Gould had anything to say during this.

Sheriff asked judge if she wanted Gould taken into custody immediately to cover her one day. Yes. Then Porisky was cuffed with his hands behind his back and frisked by sheriffs before being escorted to the lockup.

Gould was very composed and asked how long she would be in jail. Just today. She asked if she was to be handcuffed and put her hands behind her back. Not necessary. A female sheriff suggested that she give family members her scarf and anything else that she didn't want to take to jail. When I left Gould was taking off her earrings and other jewelry.

Quatloos!

Russell Anthony Porisky - Poriskyite Extraordinaire!

Re: Russell Anthony Porisky - Poriskyite Extraordinaire!

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Re: Russell Anthony Porisky - Poriskyite Extraordinaire!