Halifax businessman gets three years in jail and hefty fine for tax evasion

Canada Revenue Agency says that between Jan. 1, 2009 and Dec. 31, 2014, Halifax businessman Ralston MacDonnell and his three companies "defrauded" the Government of Canada by failing to remit $961,700.55 in deductions. (THE CANADIAN PRESS/Adrian Wyld)

HALIFAX -

A Halifax businessman is going to jail for three years after being convicted of fraud and tax evasion.

A Halifax Provincial Court judge found Ralston MacDonnell and three of his companies guilty of seven counts of fraud and four counts of tax evasion.

MacDonnell, who was convicted in May, must also pay a fine of $301,511.25, the Canada Revenue Agency (CRA) said in a news release on Friday. The CRA also said that MacDonnell’s three related corporations were fined a total of $301,516.25.

"In addition to the court imposed fine, MacDonnell will also have to pay the full amount of tax owing, plus related interest and any penalties assessed by the CRA," the news release said.

CRA said their investigation revealed that MacDonnell operated an engineering firm in Halifax that "splintered into three related companies: MacDonnell Security Risk Management Ltd., MacDonnell Group of Canada Ltd., and the numbered company 3182552 Nova Scotia Limited."

Between 2009 and 2014, MacDonnell and his three companies collected Goods and Services Tax/Harmonized Sales Tax (GST/HST) and payroll deductions and failed to remit them to the CRA.

"MacDonnell made several false and deceptive statements in dealings with the CRA, which included the evasion of requirements to pay and the withholding of information," the CRA said in a news release. "MacDonnell also used cheques knowing that they were drawn from an account that had insufficient funds. During the same period, MacDonnell diverted corporate funds into personal bank accounts unknown to the CRA, to cover personal expenses, including three mortgages, a car lease and other personal spending."

CRA says that between Jan. 1, 2009 and Dec. 31, 2014, MacDonnell and his three companies "defrauded" the Government of Canada by failing to remit $961,700.55 in deductions.