$34 million fake charity donation tax fraud linked to Brampton, Ontario business
Published March 22, 2024 at 10:20 am
A Brampton man has been sentenced to three years behind bars for claiming millions in fake charitable donations on tax returns for his clients.
Festus Bayden pleaded guilty in February to one count of fraud over $5,000 after a Canada Revenue Agency (CRA) investigation into two tax preparation businesses, including Bankay Financial Services Inc. in Brampton.
The scheme goes back decades to the 2004 to 2006 tax years, when Bayden told clients they could get a larger refund or reduced taxes if they made a charitable donation.
But the amount paid was significantly less than what was actually claimed on their tax returns. The Brampton man also profited from the scheme as he would charge his clients approximately 10 per cent of the value of the fake donations.
The court heard Bayden claimed more than $34 million in false charitable donations on individual income tax returns for over 30 of his clients.
“Bayden then provided his clients with false charitable donation receipts in the names of various charitable organizations to which he was connected,” the CRA said in a release.
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The Brampton man was charged but fled the country before he could be prosecuted, but returned to Canada and was taken into custody on June 13. He has since pleaded guilty to the charge and was sentenced to three year in prison.
His partner at the time, Eric Armah, was also sentenced to three years in prison in 2011 after pleading guilty to a fraud charge.
The CRA says tax promoters are individuals or businesses who promote or sell schemes that “break or bend” Canadian tax laws, including the Income Tax Act and the Excise Tax Act.
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