A promoter in Longueuil, Que.,has been sentenced to 42 months in jail for running a self-directed RRSP scheme, the Canada Revenue Agency said Wednesday.

In addition to the jail sentence, Jacques Gagné, was fined $616,907.

The fine represents 100% of the federal tax he helped 152 taxpayers evade. Gagné was found guilty of tax evasion in this case in July 2010.

A CRA investigation revealed that, for the 1997 to 1999 tax years, Gagné enabled 152 taxpayers to avoid reporting a total of $3,292,050 withdrawn from their registered retirement savings plans, their registered pension plans, or their locked-in retirement accounts. The schemes enabled investors to evade a total of $616,907 in income tax. Many of the taxpayers involved were recruited through deceitful advertisements published in newspapers.

To make it possible for the taxpayers to benefit from their cash assets without paying the taxes owing, Gagne secured accountant certifications attesting that the shares purchased were in fact a “qualified investment” to a self-directed RRSP. The scheme consisted of using the funds withdrawn to acquire shares from “dummy” corporations, which, in fact, were owned by Gagne, namely 9056-2927 Quebec Inc. (Servitek 2000); 9058-9557 Quebec Inc. (Educamax); Energie GYD Inc.; Les Immeubles RV (1986) Inc.; and 9063-3223 Quebec Inc. (Services Financiers Mackenzie).

IE