Dan Xu, a Brossard, Que., woman convicted last year of running a bawdy house and living off the avails of prostitution, is now facing a $420,000 tax bill from Revenue Quebec in connection with the crimes.
The provincial tax agency says Xu made more than $1 million in undeclared revenue between 2005 and 2011.
Revenue Quebec spokeswoman Geneviève Laurier said Xu’s income stemmed from illegal activities run out of a business in Montreal’s Saint-Laurent borough.
Income is income, whether it’s from legal activities or not, and it has to be declared, Laurier told CBC News.
“Tax law does not differentiate,” she said.
Laurier said going after revenue from illegitimate activities is most common with drug trafficking, but cases like Xu’s are rare.
The undeclared funds helped to finance Xu's Brossard property and her daughter’s house in Montreal.
Revenue Quebec has now obtained a court order to ensure the money is recovered through Xu's real estate and financial holdings.