Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

KPMG clients dodged taxes for years after CRA detected offshore 'sham'

KPMG clients dodged taxes for years after CRA detected offshore 'sham'

After amassing a fortune selling scrap metal in South Africa, Peter Cooper immigrated to Canada in the mid-1990s with his sons Marshall and Richard and their families.

They settled in Victoria, purchased luxurious homes and became permanent residents — qualifying for Canadian health care and other social services.

But that also meant they would eventually have to start paying tax on their investment income from $25 million in offshore accounts.

Instead, in December 2001, Peter and his sons signed up for a massive offshore tax dodge designed and run by the Canadian accounting firm KPMG and paid virtually no income tax for more than a decade, according to documents filed in the Federal Court of Canada and the Tax Court of Canada.

Unreported documents obtained by the CBC’s The Fifth Estate and Radio-Canada’s Enquête show that even after it was discovered they were using KPMG’s offshore tax dodge, Peter Cooper and his sons continued using the scheme, which Canada Revenue Agency auditors had called a “sham” that involved “deception.”

The KPMG scheme involved setting up shell companies for Canadian multimillionaires and billionaires in the Isle of Man, a British crown dependency in the Irish Sea. A client would purport to give away their wealth to one of the shell companies and then get back regular tax-free “gifts” from income earned when the money was invested abroad.

Through their lawyer, the Cooper family declined to comment.

In 2015, Marshall Cooper said KPMG approached his family to sign up for the tax dodge, and that questions should be directed towards the accounting firm.

The scheme involved at least 25 well-heeled Canadians.

The Coopers are “just the tip of the iceberg,” said Dennis Howlett, the former head of Canadians for Tax Fairness, a group that advocates against offshore tax secrecy.

The House of Commons finance committee rebooted a long-dormant probe into Isle of Man shell companies last month after CBC/Radio-Canada reported on suspicious money transfers unrelated to the Coopers.

During hearings into the KPMG Isle of Man companies back in 2016, the Liberal chair of the finance committee abruptly blocked testimony — before MPs were able to know how much money the government might have lost in revenue or the names of all the KPMG clients behind those shell companies.

Lifestyle ‘not supported by the income he reported’


In the case of Peter Cooper, who died in 2016, documents filed in Federal Court and Tax Court state he had access to a fortune of more than $25 million offshore and owned a $4-million mansion across the street from the Royal Victoria Yacht Club.

Yet the CRA says in court filings that he paid little or no income tax between 1999 and 2010.

In 2001, Cooper received a $250 cheque from a federal government program to help low-income Canadians with home heating costs. The documents state that every year from 1999 to 2010, both he and his wife claimed and received GST rebate payments — a tax credit for individuals and families with low or modest incomes.

His sons also benefited from government tax credits, court records show. Richard Cooper claimed a $9,000 home renovation tax credit in 2009 and Marshall Cooper paid $3,049 in total income taxes between 2002 and 2011, while receiving tax credits worth $5,420 over the same period.

At the same time, the Coopers were secretly receiving what added up to millions of dollars in what KPMG had called tax free “gifts” from their offshore investments from their family fortune.

At some point, the CRA observed that Peter Cooper’s “lifestyle was not supported by the income he reported,” the agency says in its court filings.

Deception ‘part of the plan’


It all seemed to come to an abrupt end for KPMG and the Coopers when CRA auditors discovered the confidential Isle of Man scheme in 2010.

In 2012, aside from having to pay back taxes and interest, the Coopers were assessed nearly $4 million in penalties for what the CRA termed “gross negligence.” The agency stated the KPMG scheme was a “sham” and that “deception was part of the plan” to not declare income in Canada and instead label the money as tax-free gifts.

But despite the CRA unearthing the KPMG offshore scheme, the Cooper family continued to use it for several years without tax officials realizing, the documents filed in Federal Court show.

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Satirical Sketch Sparks Political Spouse Feud in South Korea
Indonesia Quarry Collapse Leaves Multiple Dead and Missing
South Korean Election Video Pulled Amid Misogyny Outcry
Asian Economies Shift Away from US Dollar Amid Trade Tensions
Netflix Investigates Allegations of On-Set Mistreatment in K-Drama Production
US Defence Chief Reaffirms Strong Ties with Singapore Amid Regional Tensions
Vietnam Faces Strategic Dilemma Over China's Mekong River Projects
Malaysia's First AI Preacher Sparks Debate on Islamic Principles
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
Russia's Fossil Fuel Revenues Approach €900 Billion Since Ukraine Invasion
Alcohol Industry Faces Increased Scrutiny Amid Health Concerns
U.S. Goods Imports Plunge Nearly 20% Amid Tariff Disruptions
Italy Faces Population Decline Amid Youth Emigration
Trump Accuses China of Violating Trade Agreement
OpenAI Faces Competition from Cheaper AI Rivals
Foreign Tax Provision in U.S. Budget Bill Alarms Investors
Russia Accuses Serbia of Supplying Arms to Ukraine
Gerry Adams Wins Libel Case Against BBC
EU Central Bank Pushes to Replace US Dollar with Euro as World’s Main Currency
U.S. Health Secretary Ends Select COVID-19 Vaccine Recommendations
Trump Warns Putin Is 'Playing with Fire' Amid Escalating Ukraine Conflict
India and Pakistan Engage Trump-Linked Lobbyists to Influence U.S. Policy
U.S. Halts New Student Visa Interviews Amid Enhanced Security Measures
Trump Administration Cancels $100 Million in Federal Contracts with Harvard
SpaceX Starship Test Flight Ends in Failure, Mars Mission Timeline Uncertain
King Charles Affirms Canadian Sovereignty Amid U.S. Statehood Pressure
EU Majority Demands Hungary Reverse Anti-LGBTQ+ Laws
Top Hotel Picks for 2025 Stays in Budapest Revealed
Iron Maiden Unveils 2025 Tour Setlist in Budapest
Chinese Film Week Opens in Budapest to Promote Cultural Exchange
Budapest Airport Launches Direct Flights to Shymkent
Von der Leyen Denies Urging EU Officials to Skip Budapest Pride
Alcaraz and Sinner Advance with Convincing Wins at Roland Garros
EU Ministers Lack Consensus on Sanctioning Hungary Over Rule of Law
EU Nations Urge Action Against Hungary's Pride Parade Ban
Putin's Helicopter Reportedly Targeted by Ukrainian Drones
U.S. Considers Withdrawing Troops from Europe
Russia Deploys Motorbike Squads in Ukraine Conflict
Critics Accuse European Court of Human Rights of Overreach
Spain Proposes 100% Tax on Non-EU Holiday Home Purchases
German Intelligence Labels AfD as Far-Right Extremist
Geert Wilders Threatens Dutch Coalition Over Migration Policy
Hungary Faces Multiple Challenges Amid EU Tensions and Political Shifts
Denmark Increases Retirement Age to 70, Setting a European Precedent
Any trade deal with US must be based on respect not threats', says EU commissioner
UK Leads in Remote Work Adoption, Averaging 1.8 Days a Week
Thirteen Killed in Russian Attacks Across Ukraine
High-Profile Incidents and Political Developments Dominate Global News
Netanyahu Accuses Western Leaders of 'Emboldening Hamas'
Ukraine and Russia Conduct Largest Prisoner Exchange of the War
×