Winnipeg businessmen Jeff Dyck and Neil Friesen plead guilty to tax evasion
A pair of Winnipeg businessmen facing multiple charges have pleaded guilty to two counts of tax evasion related to a business venture that left more than 300 investors out of millions of dollars.
Jeff Dyck faces nine charges, in part for issuing false receipts to investors in relation to a company called One World United. Neil Friesen faces 13 similar charges in relation to his part of the investment venture.
The pair allegedly told investors they could claim tax writeoffs that resulted in $14.7 million of "fictitious losses," according to information to obtain a search warrant filed by the Canada Revenue Agency at the time of its investigation. The losses lessened the investors' tax burden and the CRA ruled those deductions invalid and ordered investors to pay back the writeoffs with interest.
Dyck and Friesen pleaded guilty to two of the charges, laid under the Income Tax Act and the Excise Tax Act, court documents state. The other charges, including two for criminal fraud over $5,000, are still outstanding.
The men pleaded guilty to "willfully evading taxes" and "issuing false receipts for deduction in relation to OWU (One World United)" between 2007 and 2010. They also admitted guilt in "willfully evading taxes" by promoting and issuing false receipts for deductions that resulted in a non-remittance of GST in the amount of $166,387.
Each charge carries a fine of between 50 per cent and 200 per cent of the amount the accused tried to evade and/or a maximum of two years in prison.
Dyck and Friesen allegedly promised annual returns of 10 to 25 per cent, but the scheme collapsed and left more than 300 investors out of millions, according to documents released during the Canada Revenue Agency investigation of the case.
One World United described itself as "a loyalty program that [offered] consumers discount prices and merchants an exclusive loyal member base." Retailers would sign up for the program and members would receive a card that entitled them to discounts at select stores.
Dyck set up company in Las Vegas
Jeff Dyck set up another shopping loyalty program called the Leo App two years ago in Las Vegas. The company's Facebook page shows a number of retailers have signed up for the coupon service, including salon businesses, a golf course and restaurants.
The company ran into controversy last year when Vegas retailers found their businesses advertised in relation to the app even though they did not sign up for it.
The Leo App was launched in Winnipeg in 2012 but no longer appears to be active. Dyck incorporated two businesses, Novosoft Solutions LLC and Local Exclusive Offers LLC, in Nevada last June, according to Nevada state businesses searches.
Calls to Dyck, Friesen and their lawyer have not been returned. Their sentencing hearing will be held April 25.
