Businessmen face charges over millions in tax evasion, fraud
Canada Revenue Agency alleges the men led investors to write off $14.7M in 'fictitious losses'
Two Winnipeg businessmen face multiple charges over millions of dollars in alleged tax evasion and fraud connected to a company that tried to build a shopping loyalty rewards program.
“It really created a black stain on our memories of our dad,” said Aleisha Reimer, whose late father, Ben, invested more than $28,000 in the company called One World United (OWU).
The alleged scheme was not uncovered until after Reimer’s father died.
According to a legal document that the Canada Revenue Agency used to obtain search warrants, 325 investors sank $5.2 million into OWU.
Broker Neil Friesen brought in most of that money, responsible for driving $2.8 million of the investment, the CRA alleges.
For sending OWU that business, company founder and president Jeff Dyck allegedly paid Friesen $692,922 in 2008 and 2009, according to the CRA’s information.
Court documents and emails revealed that Friesen and Dyck told investors they could make 10 to 25 per cent annually in returns off OWU.
They also allegedly told investors, between 2007 and 2010, that they could write off part of their investment as a business expense.
As the CRA claimed in its document, this led to investors deducting $14.7 million in “fictitious losses.” It ruled those deductions as invalid and ordered investors to pay back the write-offs with interest.
After subtracting some royalties received on the initial investment, the Reimers claim they have lost almost $24,000. They also had to pay back $11,300 in tax deductions and interest to the CRA.
“It’s upsetting because it reminds me of how my dad was once a really smart person who got taken advantage of,” said Aleisha Reimer.
Men face multiple charges
The CRA has charged Friesen and Dyck with fraud, tax evasion, and issuing invoices to investors with “deceptive statements.”
Dyck faces nine charges, including a criminal charge of fraud over $5,000, four charges under the Income Tax Act, and four charges under the Excise Tax Act.
His company, Neil Friesen & Associates, describes itself on its website as “one of Winnipeg’s leading providers of alternative investment opportunities."
The CRA also alleged Dyck and Friesen lied on their own income taxes by understating their incomes. Dyck is accused of failing to file income taxes in 2009 and 2010.
If found guilty, the two men could face a long time in prison and/or steep fines.
The Criminal Code charge for fraud over $5,000 carries a maximum of 14 years in prison.
Each tax charge carries a fine of between 50 per cent and 200 per cent of the amount the accused tried to evade and/or a maximum two years in prison.
The CBC News I-Team contacted Friesen, Dyck and their lawyer, but no one replied to interview requests.
None of the allegations have been proven in court.
Family suing 'alternative investment' broker
Aleisha Reimer described her father as a “working class man” who drove long-haul trucks for a living.
Still in business
Both Neil Friesen and Jeff Dyck continue to carry out business in Winnipeg.
Friesen’s company's website is still up and he still communicates with clients, although he appears to have vacated his Regent Avenue office.
Dyck is the chief executive officer of a company called LEO, which provides people with coupons on their smartphones.
The Canada Revenue Agency does not publicize people charged with white-collar crimes until they are convicted.
Toronto lawyer Maureen Ward, who specializes in commercial law, said there is no reason why the CRA cannot alert the public about these types of charges.
“They can certainly issue press releases against X person, X company, and then try their best to use social media to make sure people know they’re taking a high risk in dealing with that person,” she said.
“He liked white-water rafting and boating and having a beer on a boat with a fishing rod. I remember his laugh. Those are the types of things I want to remember,” she said.
The family is suing Friesen over the investment, alleging that Friesen got Ben Reimer to invest in One World United “by way of misrepresentative [sic], undue influence, and coercion.”
By the time Reimer met Friesen in 2008, he had lived with a lifetime of heart troubles and survived two strokes.
Aleisha Reimer said after the strokes, her father had changed as a person.
“He wasn’t as sharp as before, wasn’t as witty, and was more socially withdrawn. He’d lost some of his ability to read,” she said.
The family said in its statement of claim that Friesen “induced Ben Reimer at a time when he was a vulnerable person.”
Ben Reimer’s final investment in One World United was $20,000 on July 21, 2009, just under two months before he died at the age of 62 on Sept. 11, 2009.
In his statement of defence, Friesen denies the allegations and said Ben Reimer “voluntarily entered into "this ‘One World United’ business venture."
Friesen said Reimer showed up at his office and “requested” that Friesen “arrange” the investment.
Friesen also said he wants the family to show proof that he misrepresented or coerced Reimer.
Aleisha Reimer said she has questions over how the $20,000 cheque for her father's last OWU investment was written. According to her, the signature is her father’s, but the rest of the handwriting on the cheque is not.
In an email reply to CBC News, Friesen wrote that “about 40 per cent of clients ask if I would please write out the cheque in the proper name etc.”
Read the Reimer family's statement of claim and Friesen's statement of defence here:
Family met with Friesen
After her father died, Aleisha Reimer said the family met with Friesen at his office on Regent Avenue to discuss the OWU investment.
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“The ‘Neil Friesen file’ was the only thing in my dad’s portfolio that we didn’t really understand," she said.
She said it was difficult to get straight answers from Friesen about the investment’s details. After repeatedly pressing him for information, Reimer said her mother exploded.
“My mom said, ‘Just give me my money back!’ And, you know, she was a bit meaner than that,” Aleisha Reimer said, adding that Friesen’s tone quickly turned after that.
“He said something along the lines of, ’If you had come in with Ben when we were trying to sort this out and I was explaining it to him then you would understand what this was and you’d be on board, and it’s your own fault for discrediting this from the start,’” Reimer recounted.
Reimer said her father died not knowing his investment in OWU fell apart and that it was part of an alleged scheme.
“My dad thought things through, and so my dad would have been so mad, and that made me so sad,” she said.
Multiple search warrants obtained by CRA
Friesen and Dyck were scheduled for an appearance in court on Nov. 18, 2013. Their next court appearance is scheduled on April 14, 2014.
The Canada Revenue Agency also obtained six search warrants for their investigation into Friesen, Dyck and One World United.
They include warrants to search Friesen's and Dyck’s business records and the personal banking information of Friesen and his wife Agatha, as well as the banking information of Dyck and his wife Charissa.
As well, the court gave officers the right to search their homes and personal computers.
According to the information used to obtain the search warrants, one CRA auditor said he believed money from One World United was not going to a shopping loyalty program, but rather “it was the belief of the auditor that Jeff Dyck was using proceeds from OWU to attempt to create a ‘wrestling entertainment’ company.”