'Kid Rock' stock promoter escapes jail term for tax evasion estimated at more than $4M
Damien Reynolds was named in the 2016 Panama Papers but tax authorities investigated him for fraud
A once-high-flying B.C. stock promoter has avoided jail for tax evasion after attempting to defraud the Canadian government of an amount prosecutors estimated at more than $4 million.
A B.C. Supreme Court judge sentenced Damien Reynolds Tuesday to a conditional sentence of two years less one day to be served in the community.
The 52-year-old must keep the peace and be of good behaviour, perform 200 hours of community service and keep a nightly curfew — but Justice Gordon Weatherill said he didn't see the need to incarcerate the mining executive whose Midas touch once earned him the moniker 'Kid Rock' from Canadian Business Magazine.
"There is no evidence that he is any form of danger to the public," Weatherill wrote in his reasons for sentencing.
"No reason has been proffered by the Crown that he cannot serve his sentence in the community."
Husband to a 'real housewife'
Known for his taste in luxury vehicles and art, Reynolds appeared on The Real Housewives of Vancouver, where his ex-wife was a main cast member.
His name also turned up in the 2016 leak of tax-haven financial records known as The Panama Papers.
But the Canada Revenue Agency investigation which led to his arrest had nothing to do with the documents which named him as the offshore owner of company incorporated in 1996 in the Pacific Island territory of Niue.
A B.C. Supreme Court jury convicted Reynolds last October of failing to report $609,000 in taxable income in 2004 and 2005, failing to submit $121,000 in GST and attempting to defraud the federal government of an amount in excess of $5,000 by claiming false losses on tax returns.
The amount of the fraud was a bone of contention between the Crown, which sought a three-and-a-half year jail sentence, and the defence which argued that a 20-month conditional sentence would be plenty.
Reynolds was accused of vastly inflating his business losses in 2007 and 2008 in order to reduce his tax liabilities by millions.
The judge acknowledged that the amount was "substantial" but said that given the way the evidence was presented and the way the charge was drafted there was no way to determine what the jury made of the magnitude of the attempted fraud when they convicted Reynolds — beyond the fact that it was more than $5,000.
A 'tumultuous' childhood
Reynolds' lawyer said his client had a "tumultuous" childhood full of poverty and violence at the hands of his father.
"He and his mother and siblings lived in a low-cost hotel. His father then attempted to kill his mother by stabbing her multiple times with a screwdriver. He was convicted and went to jail," the judgment says.
Reynolds got his start in the mining exploration business as an office boy. He had four children with his first wife, from whom he separated in 2008.
The judgment doesn't mention Ioulia Reynolds, the stock promoter's former partner and Russian-born Real Houswives star.
He and his current wife Emma live in a rented apartment in Vancouver.
Reynolds' children, friends, associates, business and romantic partners all said they were shocked to learn he had been convicted of fraud.
They wrote letters describing him as "fiercely loyal, selfless, greatly respected, well-liked in the community, fair, thoughtful, caring, honourable, courteous, kind, creative, considerate, dependable, committed, honest, inspiring, loyal, supportive, trustworthy, reliable, engaging and genuine."
'Honesty' and 'integrity'
But the Crown argued that Weatherill should focus instead on two key qualities that eluded Reynolds in the context of his conviction: "honesty" and "integrity."
Prosecutors said those are the components that serve as the bedrock for the Canadian tax system.
And for all his supposed virtues, Reynolds didn't plead guilty, forcing a 21-day trial, and he has made no attempts to pay back the money he owes.
In arriving at a sentence, the judge described Reynolds as a "'deal-making entrepreneur' who left the details to others" like lawyers and accountants.
He had no prior criminal record, but Weatherill said there was no doubt his "moral culpability" was high. The judge was also impressed by the letters of support.
"They demonstrate that, but for the offences for which he is now being sentenced, Mr. Reynolds is a man of good behaviour and is unlikely to re-offend," the judge wrote.
He also fined Reynolds $121,179.
But because Reynolds is in the middle of bankruptcy proceedings, he has 12 months to pay the money.
With files from Zach Dubinsky