The Canada Revenue Agency (CRA) is alleging telecom corporation Iris Technologies Inc. (Iristel) is part of a carousel scheme.
According to the CRA, the scheme sees entities working together to sell goods to each other or create the appearance of such sales. The parties don’t pay sales tax for any imported items but do claim a tax credit when the items are sold offshore.
The CRA released $63 million in tax refunds to Iris between July 2018 and August 2019 after it ended an audit of the company after facing “pressure,” an investigation from the CBC’s The Fifth Estate states.
The agency reopened the investigation when the telecom company claimed $86 million in tax refunds in September 2019, stating Iristel “knew or was wilfully blind” to the scheme.
Samer Bishay, the CEO of Iristel, has denied the allegations.
CBC’s investigation notes Iristel started using TeleEscrow, a cryptocurrency-based platform, for its financial needs in 2019. Records showed the telecom company’s account on the platform received payments worth $600 million USD between October 2019 and March 2020, “that flowed in a circle” and led to “tens of millions of dollars worth of additional tax refund claims” that have been denied. The publication notes the $600 million came from LDI Networks.
Louis Arriola, the CEO of LDI and a convicted fraudster, introduced Iristel to TeleEscrow, Bishay told the publication. He further noted that he didn’t know anything about Arriola’s past or that he was connected to the company.
“I love how everyone sits there now four years into this and states all these facts that we were not privy to,” Bishay said. “I didn’t know who Louis Arriola is partners with or who he’s dealing with or who he’s sleeping with. That’s none of my business.”
Iristel is suing the CRA for “misrepresentation, misfeasance in public office, abuse of process and negligence.”
“What we’ve seen in this scenario that they allege is a fraud is nothing more than the hallmarks of our industry, and they label it as the badges as fraud, which I don’t understand how they could,” Bishay told the publication.
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Source: CBC – The Fifth Estate