Three investment corporations pleaded guilty to tax evasion charges on Friday at the Laval courthouse. They were fined a total of $300,000, or $100,000 each to 9063-8925 Québec Inc. (Berkshire), 9056-2323 Québec Inc. (First Financial) and First One Investment Corp. (First One).

The Canada Revenue Agency investigation revealed that the three corporations, under the chairmanship of Oswaldo Guglielmo, used a scheme that enabled investors to withdraw amounts from their locked-in retirement funds without declaring them as revenue or paying income taxes on them. The retirement funds in question include RRSPs, Registered Pension Plans, and locked-in retirement accounts.

The scheme involved transferring the taxpayer’s locked-in RRSP into a self-directed RRSP that allowed for the purchase of shares in one of the corporations, Berkshire, First Financial, or First-One. The funds used for purchasing these shares were then loaned to the investor at preferential terms.

The Income Tax Act stipulates that withdrawals of retirement funds must be included in a taxpayer’s income and are subject to income tax withholding. The value of the shares was, therefore, added to the taxable income of the taxpayers who participated in this scheme.