The RCMP has announced to have arrested six people in connection to a large investment fraud that allegedly risked defrauding the federal government up to $200 million. According to an elaborate statement issued by the RCMP, the fraud scheme involved deceiving thousands of investors to illegitimately purchase a company’s business losses and then use them to offset their income and lower their income taxes.
The investigation revealed that sometimes the businesses were legitimate but the companies did not have agreements for their losses to be transferred over to third parties. Whereas in other cases, the businesses were owned by the six accused and the losses were made-up. According to the RCMP, the groups activates resulted in “substantial” illegitimate income tax refund cheques since 2004, which were issued to these claimants, “off the backs of taxpayers.” It was added that “since 2004, the risk of financial loss by the government of Canada because of this specific fraud exceeds $200 million.”