Fiscal Arbitrators Owner Sentenced to 6 Years in Jail
The owner and operator of Fiscal Arbitrators, Lawrence Watts of Markham, Ontario was sentenced in the Newmarket Ontario Superior Court of Justice to six years imprisonment plus a fine of $149,129. Watts had been found guilty by a jury of one count of fraud over $5,000 under the Criminal Code of Canada on October 22, 2015. A 28-month CRA tax investigation found that Watts, claimed false business losses on income tax returns he prepared on behalf of 241 of his tax return clients. Those fictitious tax losses allowed his tax return preparation clients to receive or attempt to receive approximately $10 million in federal income tax refunds. The tax fraud by Fiscal Arbitrators was to entice Canadian taxpayers with the promise of a large income tax refund. Fiscal Arbitrators would charge a fixed fee for the preparation of the T1 tax return and would also charge a percentage of any income tax refund obtained. Fiscal Arbitrators generated the fraudulent tax refunds by claiming false business losses and using tax loss carry back rules to claim refunds for income taxes previously paid by the taxpayers. DSC Lifestyles Services was also involved in the tax fraud scheme and would refer their clients to Fiscal Arbitrators for a percentage of the tax refund proceeds. Reports on CTV’S W5 stated that as many as 1,800 Canadian were involved in the Fiscal Arbitrators program.