More Poriskyites bite the dust!

[Burnaby49]

The link is to a very recent decision of the Queen's Bench for Saskatchewan re the appeal of three Porisky accolytes from tax evasion convictions.

http://www.canlii.org/en/sk/skqb/doc/20 ... kqb87.html

I particularly liked the part of the decision that said;

[90] Here the applicants argue that they honestly believed they were not receiving income and they were not depriving the Government of Canada of any taxes owing.

[91] The appellants also argue that they did not display a "willful blindness" such that their conduct constituted an intention to deprive or cheat the Government of Canada of the taxes owing. The appellants state that CRA did not correct the appellants' incorrect interpretation of "taxable income" in The Income Tax Act and thus the CRA, in effect, endorsed the appellants' conduct.

[92] This argument is completely without merit.

[93] CRA cannot be held to have endorsed the conduct of the appellants simply because they did not warn the appellants that they were investigating the appellants' withholding of income tax.

[94] In fact, the respondent says that evidence that was seized as a result of the search of the appellants' premises and introduced at the trial disclosed that the appellants were notified of CRA's position that "natural persons" are not exempt from income tax liability. The respondent says that the learned trial judge found the appellants to be willfully blind thus having the requisite intent. Paragraphs 168 and 169 of the trial judgment are as follows:

[168] Lastly, but perhaps most importantly when dealing with the question of intent, I would conclude that the accused were wilfully blind. The court has repeatedly held that a finding of wilful blindness is the equivalent of a determination of knowledge and intent. See for example R. v. Harding, [2001] 160 C.C.C. (3d) 225 (Ont. C.A.). I am mindful of the warnings expressed by the court in Sansregret v. R., [1985] 1 S.C.R. 570, of the dangers of using wilful blindness and how it ought to be applied in a narrow set of circumstances. In my view however, the facts are appropriate here and require determination of wilful blindness.

[169] I specifically rely upon the following facts:

1. Mr. Amell testified that the starting point in this matter was when he began to question the application of the Income Tax Act to him. Further, that he desired to maintain and hold on to his property. He spoke of his entitlements to his property. At that time he knew that he was obligated to pay a tax and was in fact paying those taxes. The filing of his tax returns were perfectly proper.

2. Mr. Amell then went in search of "tax advice" that confirmed his view of the world, confirmed that he was not obligated to pay tax, and basically "told him what he wanted to hear". He then found that in the teachings of Mr. Russ Porisky and the Paradigm Education Group and the advice received from Mr. Doug Lewry.

3. The Paradigm materials and the teachings of Mr. Porisky have no credibility. In my view, they are nothing more than the proverbial "snake oil salesmen". Because the accused were so desirous of receiving "snake oil", Porisky and Lewry obliged by selling them that. To my knowledge, Mr. Porisky has no professional degrees or designations, and is not qualified to offer any professional or legal accounting advice. Paradigm materials, while offering legal and accounting advice, all contain a disclaimer advising that the contents should not be considered legal or financial advice and recommending that the viewer consult an expert. Despite this warning, the accused chose to rely upon this advice. Moreover, the materials and the teachings of Mr. Porisky have no credibility, and it was utterly unreasonable for the accused to attempt to rely upon these teachings. In the Sydel decision supra at paragraph 20, sub-paragraph h., His Honour Judge Meyers quotes Mr. Porisky at one of his lectures as follows: "I am in the building trade. I am not a lawyer. I can't give legal advice. I am not an accountant. I can't give accounting or financial advice. I am just a guy banging nails." With all due respect to those involved in the building trades, one cannot do what the accused has attempted to do here. One cannot credibly say: "I was under a mistaken belief that these payments were not income. I got my legal and accounting advice from a carpenter." I defy any individual to produce any expert in legal or accounting matters that would testify that these teachings are reasonable and legitimate legal and accounting advice.

4. The accused had professional accounting advice from Mr. Reg Campbell, a certified management accountant. Shortly after acquiring the Paradigm materials, the accused consulted with Mr. Campbell regarding those materials. They provided the tapes to Mr. Campbell, who reviewed them. Mr. Campbell advised them against following these teachings and advised them that these steps were not proper or authorized under the Income Tax Act and his knowledge of accounting procedures. The accused completely disregarded this advice from Mr. Campbell, choosing to rely upon the Paradigm materials.

5. The trust examiner employed by the Canada Revenue Agency advised against taking these steps, and reported the matter to the CRA. There is then a series of correspondence between the CRA and the accused. The CRA repeatedly advised that the accused were obligated to make source deductions and obligated to comply with the Income Tax Act. They asked the accused to participate in an advance tax ruling. The accused repeatedly advised the CRA that they were no longer under the jurisdiction or authority of the CRA or the Income Tax Act, and they had no obligation to comply with the Act. In response to the request for an advance tax ruling, they stated that the Department had no authority or jurisdiction over them, and they had no legal obligation to proceed with an advance tax ruling. Throughout the trial, Mr. Amell complained that the representatives of the CRA had no knowledge of the teaching of Mr. Porisky and Paradigm Education Group, and viewed the matter entirely from the Department's perspective, without acquiring any knowledge of the Paradigm perspective. Why did the accused refuse to participate in the advance tax ruling? In my view, it is very clear that the accused knew that the adjudicators appointed for an advance tax ruling would view and decide this matter from their perspective. That is, they would view and decide this matter under the provisions of the Income Tax Act. The accused knew full well that this advance tax ruling from the Department would not be favourable to accused's view of the situation. Quite simply, they had no intent or desire a receive a legal or accounting opinion that did not correspond with their view of the world.

6. The accused also called Mr. Robert Church as a witness. Mr. Church is a public accountant residing in Moose Jaw, who for many years has prepared corporate and personal income tax returns. The accused called Mr. Church to testify that he would not have included certain income from the Corporation to Mr. Doug Amell under Schedule 14 attached to the returns. However, under cross-examination by Mr. Dahlem, Mr. Church agreed that all the funds paid to Douglas Amell by the Corporation were income and had to be declared income. In other words, whether Schedule 14 was used was a matter of academic significance. The accused quickly disregarded this portion of Mr. Church's evidence. Mr. Douglas Amell said that Mr. Church had not read the contract for hire and expressed an opinion on the taxation of funds paid under the contract of hire. Once again, the accused quickly closed their eyes and disregarded legitimate accounting advice.

[95] The learned trial judge considered the limited circumstances in which the doctrine of wilful blindness applies and found that it was applicable to the circumstances of this case. I find this to be a reasonable conclusion for the following reasons.

[96] The appellants developed a scheme that was designed to avoid payment of taxation. They also were well aware that this scheme was a variation of a scheme that had been tested and failed in courts in this country many times. In fact, the case of R. v. Klundert, referred to by the appellants, deals with a similar, although not identical, scheme.

[97] It is also noteworthy that the Court of Appeal in Klundert did not find Dr. Klundert's mistake of law to constitute a defence.

[98] Although Heidi Keyzer and Robert Amell did not testify, the evidence adduced at trial was sufficient for the trial judge to reasonably come to the same conclusion for all three appellants.

[99] The parties had signed their tax returns reflecting no income from the clinic. All parties subscribed to the same beliefs. They identified themselves as natural persons and stopped reporting income received from the clinic.

[100] This was not, as claimed, a misinterpretation of the definition of taxable income in a notoriously complex statute. This was a deliberate self-serving interpretation based upon some theory that had been struck down numerous times in various adaptations by the courts of this country.

[101] If the conduct of the appellants is not wilful blindness, one cannot imagine when that doctrine would ever apply.

[102] I find the conclusions of the trial judge reasonable and in fact agree with those conclusions. The appeal therefore fails on this ground as well.

[103] Accordingly the appeal of conviction is dismissed with respect to all appellants.

[Hilfskreuzer Möwe]

A quick follow-up on the Amells. Their appeal at the Saskatchewan Court of Appeal has been partially successful:

R. v. Amell, 2013 SKCA 48: http://canlii.ca/t/fxctg

In brief, Son Amell bought into Porisky's scheme, and sold that to his dad, Father Amell, and his common law spouse Keyzer. Father Amell was a Moose Jaw naturopath. Both Son Amell and Kezyer worked for him. Eventually the CRA arrived and investigated. All three were found guilty of tax evasion and received prison sentences.

There are a bunch of grounds of appeal. I should note immediately - this appeal was done on actual legal grounds rather than the usual De-Taxer concepts. Allegations that the CRA audit searches and interrogations were unconstitutional were rejected. The CRA had not failed to disclose relevant materials.

Then there are the more interesting appeal headings. Kezyer was not present for much of the trial because she was in the midst of a miscarriage. Son Amell represented her during this time. The Court of Appeal concluded that the trial judge was incorrect to not adjourn the proceedings in response to this actual medical emergency. It did not matter that Son Amell was running the defence, Kezyer had a right to participate in the trial. Retrial ordered for Kezyer.

Son Amell and Father Amell argue their sentences (16 months, 3 months) were too long. The Court of Appeal observes that since Father Amell has served his entire sentence the question is moot. Son Amell's sentence is confirmed, with some very pointed language:

[55] The trial judge estimated Douglas was drawing some $15,000 per month from his business without paying any taxes on that amount. The same time he was drawing this salary, Douglas applied for and received thousands of dollars in GST and child tax rebates. The trial judge found the receipt of these latter funds was “nothing short of morally and legally reprehensible”. This was particularly egregious because these rebates were from programs designed to assist poor children and poor families (p. 8 of sentencing transcript). The trial judge found the scheme to perpetrate the fraud was long-term and premeditated. He saw it not as a case of tax avoidance, but of tax evasion motivated by greed and personal advancement.

...

[58] ... Douglas was the mastermind who dragged his wife and father into the scheme. He very deliberately chose to ignore professional advice and ignore the opportunity to get an advance ruling. He took advantage of social programs not designed for someone earning the amount of income he was drawing from the business. There was no remorse demonstrated until the eve of the sentencing hearing. The trial judge was correct to be sceptical. The federal tax evasion was approximately $190,000 and there was a very significant, but unproven, provincial revenue loss. The summary conviction appeal court judge was correct to uphold the sentence imposed by the trial judge.

Personally, I like it when courts call a parasite a parasite.

Burnaby49's post and the Saskatchewan Queen's Bench case do not cite the original trial decision, which is lengthy and detailed:

R. v. Amell, 2010 SKPC 107: http://canlii.ca/t/2c05t

Last, I noticed that the Court of Appeal and Queen's Bench proceedings feature a controversial legal figure, defence lawyer Doug Christie. Christie died in March, so this January 2013 case would be among his last appearances. Christie had a lengthy history of defending unusually unpopular clients, particularly racists and anti-semites. He has also been a popular alternative for OPCA litigant types who have decided to try a more conventional litigation strategy.

SMS Möwe

[JamesVincent]

One thing I like about some of the judge's decisions that get posted. He very well could have stopped at

[92] This argument is completely without merit.

He didn't have to go into why it's without merit or the particulars that caused him to rule the way he did, once he stated the argument and then slammed the argument he could have been done. But then we wouldn't have the entertainment we do from reading their decisions.