A West Vancouver man was recently fined $650,000 and sentenced to 29 months in jail by a British Columbia court for tax evasion, according to the Vancouver Sun.
The man, who is in his 60s and named Michael Scholz, was convicted in June 2020 of three tax-related offences under the Excise Tax Act and two criminal offences of falsifying documents, court records show.
In a statement, the Canada Revenue Agency said Scholz will have to pay a penalty of $644,975.71 in addition to jail Time.
The investigation found that Scholz falsified documents used to support illegal tax credits related to the title, construction and design of the Home, and falsified a lease agreement used to reduce the valuation of the home, thereby reducing the amount of taxes payable, the Revenue Agency said.
Court documents show that Scholz obtained a building permit in 2010 and planned to build a large 10,000-square-foot house on a vacant lot at 1071 Groveland Road, valued at approximately $3 million.
The land on which the house is located is registered to 1071 Groveland Properties Ltd. In July 2009, Scholz’s wife used Scholz’s money to buy 100 percent of 1071 Groveland Properties Ltd. for $1.475 million.
Construction of the house began in 2010 and the budget in question was increased from $3 million to $6.1 million and the floor area increased to 11,000 square feet.
From the start of construction, Scholz filed HST/GST tax returns and continued to do so until after completion and occupancy in late 2012.
In November 2012, IRS officials began reviewing Scholz’s GST/HST returns and in January 2013 informed him that his GST/HST refund had been denied and he was required to return it. The IRS assessed his house to be valued at $6.8 million and will use that to calculate the GST/HST he will have to pay.
In order to qualify for the GST refund, Scholz then falsified documents claiming that he and his wife were joint trustees of the property. Scholz then falsified documents declaring that he was the 100% beneficiary of the property.
In addition, Scholz falsified a lease in which Scholz was the tenant and the landlord was 1071 Groveland Properties Ltd. for a 20-year term.
In addition, he misrepresented his residence to IRS officials after moving into the completed home in order to continue filing his GST tax return.
Scholz holds degrees in business and law and was a partner in a law firm for 23 years, court documents show. He owned two multimillion-dollar companies engaged in the acquisition and management of commercial buildings. He has also acquired two hotels and is a board member of several public companies.
The Canada Revenue Agency said that in the year from April 2019 to March 2020, there were 32 tax fraud convictions across the country and 13 taxpayers were sentenced to jail, involving a total of $7.4 million in intentional tax evasion.
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