Posted by & filed under Fraud, Taxation.

Description: While delivering a verdict in a tax fraud case on Thursday, Nova Scotia Supreme Court Justice Robin Gogan said “What was being baked here was a scam of epic portions.” Four women from Cape Breton were found guilty of fraud and a variety of violations under the Excise Tax Act. The scheme consisted of creating fictional sales, and then claiming rebates of the related GST and HST. While the group did manage to work the system for about $275,000, another $3 million in requested rebates were prevented by the auditors from Canada Revenue Agency who became suspicious. Sentencing will take place in May.

Date:  February 25, 2022



Discussion points:

1) What caught your attention in this story?

2) Do you think the outcome might have been different if the defendants had been able to secure legal representation?

3) Illustration 7.2 in Wiley’s Financial Accounting: Tools for Business Decision-Making provides a graphic called the Fraud Triangle. One of the elements of the fraud triangle is rationalization. How do you think the participants may have rationalized their behaviour in this matter?

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