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article imageFormer Canadian tax auditors charged in restaurant shakedowns

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By Arthur Weinreb     May 2, 2012 in Crime
Montreal - The RCMP have announced three former employees of the Canada Revenue Agency (CRA) are facing fraud, bribery, breach of trust, and corruption charges after an investigation into wrongdoing began in 2008.
Yesterday, the RCMP in Montreal announced the investigation, code named "Project Coche," has resulted in the arrest of three former CRA officials. The three men face numerous charges including extortion, bribery, fraud, and breach of trust by a public official.
Charged are Francesco Fazio, 55, and Elias Kawkab, 50, both of Ville Saint-Laurent, and Luigi Falcone, 50, of Laval.
It is alleged the men attempted to extort money from restaurant owners in exchange for lower tax assessments.
Fazio was discharged from the CRA in 2011.
It is alleged a restaurant owner was offered a lower tax assessment in 2005 in exchange for a payment of $50,000. The owner refused the offer. As reported by the Globe and Mail, the manager of La Belle Place was told that an auditor discovered undeclared revenue from beer sales. The manager said a CRA auditor told him, "Think about it and when I come tomorrow, you tell me."
The RCMP alleged that Mr. Kawkab, a former CRA team leader, successfully obtained $100,000 from a Montreal restaurant owner “on an agreement that he would erase unreported income.”
Kawkab was also let go by the agency last year. The RCMP alleges the former team leader received a payment of $100,000 from a restaurant in exchange for ignoring the establishment's unreported income. The Montreal Gazette reports the owners of Arahova, a Montreal restaurant, were allegedly told by an auditor that he found $3 million in undeclared income. The owner was given a choice; a hefty tax bill or pay a bribe of $250,000.
The alleged bribe was eventually reduced to $100,000. The owners raised the money by remortgaging a property.
Falcone voluntarily left the CRA in 2009. It is alleged that in 2006, he offered to lower the assessment of a restaurant in exchange for a payment of $50,000. The restaurant owner refused to pay.
RCMP Cpl. Luc Thibault is quoted by CBC as saying:
It is all the same type of pattern that they all [allegedly] did. More charges could be laid in the matter. It's still under investigation, so I can't say much on that, but there could be more charges.
The RCMP believe there are more victims and are asking anyone with information to contact them. The three former officials are scheduled to appear in a Montreal courtroom on June 11.
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