Sep 22 2000

The "Tash" Tax scam

By Lynne Robson, CBC News, Montreal

Kiryat Tosh, Montreal (HN) - Hundreds of people and businesses in Quebec are under suspicion as part of a huge tax scam. It involves a charity connected to the ultra-orthodox Jewish community "Tash". And it involves 60 million dollars worth of phony tax receipts.

It's a tight knit tight-lipped community. And no one wants to talk about the huge tax fraud scandal whirling around this neighbourhood. Leaders of this Tash Hasidic community created a charity to raise money for new homes. In fact it was a scam to cheat the government. And it was a secret until Joseph Goodstep blew the whistle. He owns a large construction company in Montreal. He invited a rabbi to his office to describe the charity tax deal, then he tape-recorded the conversation.

This is how the plan was described: if a man gave for example 100 thousand dollars, the charity would give him 80 thousand dollars back. That would leave the charity with 20 thousand dollars. But the organization issued tax receipts for the entire amount. So the entire amount could be claimed on provincial and federal tax returns -- a maximum tax savings for the donor of 53 thousand dollars. Goodstep told Canadian tax officials. That triggered a two year investigation.

Some experts suggested that not only they pay a penalty, such as fines and jail but they be banned from carrying on this type of activity under another front organization.

That's not what happened here. The Hasidic charity was stripped of its right to issue tax receipts. But the community leaders faced no criminal charges. The case however is not closed for donors to the scheme. Revenue officials say hundreds of people here and in Montreal will be investigated and may face big fines.