KPMG-linked offshore companies ordered documents destroyed amid CRA probe – Business

Five weeks after the federal government demanded KPMG maintain all records in an ongoing tax investigation, a group of offshore shell companies set up by the accounting giant held an “extraordinary” meeting and voted to destroy documents related to the probe, an investigation by CBC’s The Fifth Estate and Radio-Canada’s Enquête has learned.

‘It’s a grey area for enforcement.’
– Jeffrey Kaufman, lawyer

The Department of Justice sent KPMG a “Notice to Preserve Documents” on October 18, 2012, as part of a federal probe into allegations the firm and several of its wealthy clients were involved in a massive tax dodge that had “intended to deceive” the Canadian treasury. 

On November 26, 2012, four Isle of Man shell companies caught up in the Canada Revenue Agency probe passed a resolution that “books, documents and all papers” be “destroyed,” according to records in the Isle of Man obtained by CBC/Radio-Canada.

The DOJ notice did not specifically mention maintaining records outside of Canada.   

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‘Two separate jurisdictions’

Retired RCMP investigator Jeff Filliter said it is unclear what legal weight a DOJ letter might have in this instance. “The difficulty here is that you are dealing with two distinctly different and separate jurisdictions,” he said.

“It’s a grey area for enforcement,” said Jeffrey Kaufman, a Toronto-based lawyer consulted by The Fifth Estate. “You’re dealing with a jurisdiction that may not co-operate, and people hide behind that.”

Kaufman also said KPMG may have no legal obligation to tell the Isle of Man companies about the Justice Department request to preserve documents. “All KPMG is required to do is to comply with laws in Canada and act in the best interests of their clients.”

  • If you have tips on this story please email investigations@cbc.ca or phone Harvey Cashore at 416-526-4704

In a statement to The Fifth Estate,…

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