An accountant who the Canada Revenue Agency had claimed was possibly behind widescale tax fraud won’t face criminal charges due to lack of proof of intent.
Investigators had alleged that Mohamed Ali Jesow, who prepared and filed tax returns for hundreds of people out of a basement office in west end Toronto, systematically fabricated or inflated various deductions and business losses on his clients’ T1 forms.
Jesow’s office was raided last year after agents obtained a search warrant.
But earlier this week, Jesow posted on his Facebook account a letter from the CRA, dated July 31, informing him that “charges will not be laid in this case.”
The CRA confirmed in a statement to CBC that its nearly three-year investigation has ended with no criminal charges.
“There needs to be sufficient evidence to establish that a crime has been committed and that the individual did so with intent,” the statement says. “The CRA can confirm that no charges have been laid against Mr. Jesow due to the lack of evidence.”
Jesow was jubilant at the news.
“I am very happy with the CRA decision. And I truly believe that, in this case, justice was served,” he said in an email Friday.
The origins of the CRA probe into Jesow date back four years, when an auditor noticed an uncanny number of Toronto-area residents’ tax returns being filed with similar amounts claimed for “carrying charges and interest expenses.” Those are deductions that can be claimed for costs related to earning investment income.
Subsequent investigation determined that of 1,473 people who seemed to have hired Jesow to file their taxes, 85 claimed the exact same amount, $903, in carrying charges and interest in 2012; another 74 were all claiming a slightly higher amount, $1,025.
Criminal investigators decided to take a closer look and, after interviewing two dozen of Jesow’s clients, found that 22 of them said they had not actually incurred any carrying charges or interest expenses, according to a court filing.
The investigators also found what they alleged were bogus claims for charitable donations, business losses and medical expenses, and in a sworn statement, said it amounted to a “fraudulent scheme” that could potentially have involved millions of dollars in phoney tax deductions.
The allegations were never tested in court, however.
‘This is all coming from pressure on the clients’
Jesow told CBC in an interview earlier this year that all the taxpayers the CRA interviewed had lied — that they supplied him the numbers that he dutifully filled in on their tax returns, but then they threw him under the bus due to “intimidation” from the agency’s investigators.
Jesow moved to Canada in 1989 and ran a tax-preparation business for two decades in Toronto. He returned for good to Somalia in recent years where he raises livestock, grows crops and makes cheese. (Facebook)
“I never did anything that these clients didn’t know, and this is all coming from pressure on the clients. The way Revenue Canada officers work, they go as far as saying, ‘If you admit that Mr. Jesow did this for you, then we will not charge you with criminal charges,’ ” he said at the time.
On Friday, Jesow reaffirmed that he never fabricated figures on his clients’ tax forms.
“I always advised my clients to keep their records as required by the CRA rules and regulations. Some clients don’t even have any record and thus, come tax time, [gave] estimations of their business activities.
“It is not easy when tax filers don’t have any record. But I never did use estimations of my own or fake charitable donations, or presented forged receipts to the CRA.”
The tax preparation business was run out of a basement office in west-end Toronto since 2014. The premises were raided by the CRA in March 2017. (Google Streetview)
On Facebook, his supporters cheered the news that he won’t face charges.
“I know what you must have gone through when people from your own community judge you as a criminal. I never doubted you,” one person wrote.
“Good news! Congratulations, bro,” another said.
Even if the CRA had decided to lay charges against Jesow, it would have been difficult to prosecute him. After operating his tax preparation business in Toronto for two decades, he moved back in recent years to his native Somalia, which has no extradition treaty with Canada.
Jesow built this resort hotel complex on the outskirts of Mogadishu. He now lives on the adjoining estate. (Flickr)