Tax Evasion Drama:  Recent CRA Prosecutions

Geoff Currier

Did you know the CRA conducts approximately 350,000 audits and reviews on an annual basis? This means there’s about a one in ten chance that your clients will be audited or reviewed by CRA, in any given year.  Now, CRA- initiated reviews will be enhanced by AI profiling.  It’s critical for you to insist on pertinent tax information so you can help clients avoid audit and tax evasion charges in particular.  It’s very expensive, as a few recently prosecuted taxpayers just found out:

The Backdrop: While prosecutions for tax evasion are rare, they do occur. Between April 1, 2020 and March 31, 2025, 106 taxpayers were sentenced for evading or attempting to evade taxes. The total amount owing to CRA in those cases was more than $39 million dollars.

It can’t be overstated just how seriously CRA takes fraud or income tax evasion.  The fines were significant. They totalled $24.5 million. Of those 106 offenders, 49 were incarcerated for a total of more than 98 years in jail.  In addition to the fines imposed, offenders must also pay the full amount of tax owing.  And this is a criminal offence – it will affect the ability to cross borders in the future.

Example #1: On January 20, 2026 CRA announced that a couple running a temporary staffing agency in Vaughn, Ontario, had been convicted of fraud over $5,000 under the criminal code. Ghansham Vania was convicted of under-reporting income of $1.3 million and Davinder Vania was convicted of under-reporting income of $1.5 million between 2013-2016. Between the two they evaded paying federal income taxes totalling nearly $847,000. 

CRA determined that the pair was using funds from the business they ran, called “Team Lease” for their personal use. Money from the business had been diverted into 31 separate personal bank accounts in their names or the names of family members. Some of the money was traced to land purchases in both Ontario and Florida.

Ghansham was fined $450,000 and Davinder was fined $500,000. Both were also given conditional sentences of two years less a day. 

Example #2: In December of 2025, a dentist in Mount Royal, Quebec,  Hanna Elian, pleaded guilty to three counts of making false statements on his income tax return and another count of tax evasion.  An investigation revealed that Elian had failed to report a total of nearly $1.9 million in income over a three year period from 2015 to 2017.  

Elien was operating a clinic in which three dentists paid him fees for  the use of space, equipment, etc. Cheque payments from two of the dentists were deposited into a personal account and not reported. By doing so, he evaded paying more than $313,000 in federal income taxes. He was fined that same amount. 

Example #3: In yet another example of serious tax evasion, a home builder in Heritage Point, Alberta, Richard Paolini, was handed a conditional sentence of 18 months and fined a total of $197,772.50 after he pleaded guilty to one count of tax evasion under the Income Tax Act and another count of tax evasion under the Excise Tax Act. By funnelling money for personal use from his business, “Inner City Homes” as well as failing to report earnings from rental income and capital gain, he failed to report a total of $1.08 million in income, thereby evading taxes of just under $300,00 for the tax years from 2015,16,17,18 and 2020. 

CRA also determined that the business collected GST but failed to report it on the 2017 return.

 The Bottom Line:  While these examples are extreme cases of income tax evasion and fraud, they serve as warning signs to all taxpayers that reporting all taxable income is mandatory.   Tax and financial advisors can help by educating their clients on the serious consequences of failing to report all income.

Ask pointed questions about whether all income has been declared or whether any sources may have been missed.  Be sure to review banking records, particularly as part of your services to the self employed.  It is also within your rights to refuse to prepare tax returns for clients who refuse to co-operate with disclosure of required tax information