Tax refund cheque raises concerns about mafia infiltration at CRA

How does a mafia boss, who owed the government $1.5 million in back taxes and was sitting in a jail cell, get a CRA refund cheque for hundreds of thousands of dollars?

Has organized crime infiltrated our tax agency?

Those are the questions being asked today, after an exclusive CBC/Radio Canada report revealed that the Canada Revenue Agency issued such a cheque, in 2007, to the now-deceased Nicolo Rizzuto.

The $381,737.46 cheque was made out to "Nick Rizzuto" and addressed to his house on Antoine Berthelet Avenue in north-end Montreal, a street known as "Mafia row" because it was home to several major players in the city's Sicilian mob.

The cheque is labelled "income tax refund" and is dated Sept. 13, 2007. Rizzuto was in jail then, having been arrested the year prior and charged with extortion, bookmaking and drug smuggling as part of the biggest police crackdown on the Italian Mafia in Canadian history.

Court records show that at the time, he also owed the tax department $1.55 million, which the Canada Revenue Agency tried to collect by getting a tax lien on his home.

CRA was able to recover the cheque, but Radio Canada spoke to a former corruption investigator who can't understand how such a disbursement was even authorized.

"There are checks in place. There are approvals that are required during the whole process," Jean-Pierre Paquette said.

"It's left me rather perplexed about the validity of that kind of rebate or that kind of move by the agency."

Kerry-Lynne Findlay, the federal minister of National Revenue, released a statement on Thursday afternoon, acknowledging that the cheque was sent to Rizzuto "incorrectly" but that the funds had been recovered.

"This Government considers any misconduct by tax officials unacceptable. Those responsible for misconduct must be held accountable," Findlay said in the statement, according to the Globe and Mail.

"We are acting to hold people accountable. We are committed to cracking down on crime and protecting the integrity of our tax system."

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The CRA's Montreal office has been under scrutiny since 2008, after allegations surfaced of employees taking bribes.

To date 6 officials have been charged with fraud or corruption.

The office, according to the Globe and Mail, has also been a subject of Quebec's Charbonneau Commission — the ongoing corruption inquiry into public contracts in the construction industry.

"The Canada Revenue Agency in Montreal was allegedly infiltrated by tax officials who sought kickbacks in exchange for favourable rulings and turning a blind eye to undeclared revenues," notes a Globe overview of the commission.

"One CRA official is accused of helping a construction firm avoid a tax audit that would have exposed a fake-invoicing scheme involving major construction firms."

(Photo courtesy of the Canadian Press)

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