Revenue agency says refund to mob boss was error
MONTREAL - The Canada Revenue Agency says there was no fraud, collusion or corruption on the part of its employees in the issuing of a refund cheque for more than $381,000 to a now dead Mafia don who owed $1.5 million in back taxes.
The agency acknowledged a weakness in the system controlling the issuing of the cheque and questionable employee performance but said in a report on the investigation that there was no intentional wrongdoing.
The cheque was issued on Sept. 13, 2007, to Nicolo Rizzuto, a reputed organized crime figure in Montreal.
The agency said Rizzuto's daughter alerted them to the error two weeks later and the cheque was cancelled. The cheque itself, which was never cashed, was recovered on Oct. 2, 2007.
The investigation, which was ordered in September 2013 after media reports, was carried out by the agency's Internal Affairs and Fraud Control division. It was verified independently by the Ernst and Young accounting firm.
Investigators found the refund could not have been deliberately issued because of controls in place and because no single person has overall authority over sending out a cheque.
"Although the evidence found no unethical behaviour or corruption by (agency) employees, it did find that an employee failed to follow established procedure with respect to cheque verification and that this contributed to the issuance of the cheque in 2007," the agency said in its report.
It also noted the system weakness that contributed to the snafu.
"At that time, no mandatory guidelines or procedures were in place that would have instructed an employee to flag taxpayer accounts for which amounts owed were in dispute and multiple taxation years were at issue."
The agency says procedures have since been tightened and further safeguards are being added.
Rizzuto had just been arrested as part of a sweeping police operation in November 2006 and sent to prison. The elderly Mob boss was eventually released. He was murdered in his kitchen in 2010.