May 29 2008
Car dealer fined $7 million for fraud
A car dealer was sentenced to two years in jail and fined $7 million in court yesterday for defrauding Ottawa of that amount in a long-running GST fraud.
Michael Wolfe, who smiled bravely to his family after the sentencing, was taken into custody at B.C. Supreme Court, but was released later after bail was granted pending an appeal.
A jury found Wolfe guilty under the federal Excise Act of all but two of nine counts related to a GST scheme in which millions of dollars in GST rebates were claimed on 1,600 vehicles imported by Wolfe’s then-dealership, Port Chevrolet Oldsmobile in Port Coquitlam.
Crown prosecutor Les Mackoff called it the largest GST fraud scheme ever prosecuted, but defence lawyer Kimberly Eldred said she believed there had been a larger one in Ontario.
The fraud involved two co-accused, Sameer Mapara, former owner of the Rags to Riches used-car lot, now serving a life sentence for first-degree murder for a shooting on that lot, and Port Chev Olds former fleet manager, Jay Grant. Charges against both were stayed.
Mapara had the firm front the money for the imported cars for which he said he had lined up Asian buyers. Because they were exports, they were exempt from the GST.
But as Madame Justice Kirsti Gill pointed out, “GST was claimed on vehicles that did not exist.”
Some $8 million was collected in rebates over a two-year period.
There was no evidence Wolfe — son of Evan Wolfe, finance minister in former Social Credit premier Bill Bennett’s cabinet — benefited personally from the money, other than the benefit that went to Port ChevOlds, Gill said.
She noted that Wolfe’s role was that of a facilitator and those responsible for planning the scheme “will not or cannot be prosecuted.” She said it wasn’t clear where the money went.
She also noted Wolfe, 58, was “visibly humbled” and had no previous criminal record.
But she said she was bound by the Excise Tax Act to impose the mandatory minimum fine of $7 million, which equalled the amount of GST evaded.
She noted that if Wolfe had been charged under the Criminal Code, restitution likely wouldn’t have been that large.
Gill ruled Wolfe has until Aug. 31, 2014 to repay the amount but added it’s unlikely he will ever be able to do so. It’s not clear how much of the money will be repaid.
Eldred said she plans to appeal.
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