Accounts at HSBC in Switzerland | Revenu Québec claims millions from two ex-lawyers

The tax authorities are claiming millions from two former Quebec lawyers who held accounts in Switzerland revealed in a leak of information on HSBC Bank in 2015. They ensure, however, that the money is not theirs, but that of Syrian customers… whom they refuse to identify.

Michael Lackstone and Harold Peter Turner worked together before retiring and leaving the country. Revenu Québec claims that together they hid income totaling nearly $4.7 million in Swiss accounts from 2002 to 2007. The tax authorities are claiming a total of more than $3.3 million in fees, penalties and interest.

But the former lawyers, who now live in Israel and London, say they “never had a personal interest of any kind” in those accounts. Instead, the funds would belong to two of their clients “who were not resident in Canada”.

But still ? Lackstone and Turner decline to be more specific, despite tax laws. Their clients invoke “professional secrecy”, they say. They “prohibit” them from revealing their identity, “especially since they come from a highly volatile area”, mention their requests for an appeal for notice of contributions.

“Highly volatile zone”

In 2020, their former lawyer only specified in an email filed in court that the region of origin of the clients is in fact “the Middle East and more precisely, Syria”.

They would have called on them to distribute the funds from these Swiss accounts to their relatives in the event of their death.

According to Lackstone and Turner, their names were listed as “authorized signatories” to enable them “to fulfill the instructions” they received.

Of course, Revenu Québec wants to know more. For the tax authorities, Lackstone and Turner’s requests for appeal, based on professional secrecy, “are unreasonable or divert the ends of justice”, since they prevent him from defending his contributions.

Global leak

“The accounts in question were held at HSBC Bank in Geneva, which was the subject of a leak of information”, mention the procedures of the two lawyers in their appeals for notices of contributions.

Ex-employee-turned-whistleblower Hervé Falciani handed over data on 106,000 clients of private bank HSBC to the French government in 2008. Paris then handed over to several other states intelligence on their own nationals holding secret accounts .

Canada has thus received information on 394 accounts “at risk” and containing large sums of money, reported The Press in 2015.

The French daily The world also had access to part of the leak and shared it with the International Consortium of Investigative Journalists (ICIJ). The Press gained access to those files and tracked down the data on Lackstone and Turner’s accounts.

The documents show two accounts containing a total of nearly 4.7 million, precisely the same amount claimed by Revenu Québec.

Turner’s mother in the data

The ICIJ data does not contain any traces of Syrian customers. On the other hand, they mention a certain Marjorie Turner, born in 1917.

The Quebec tax authorities do not record this information in their procedures. But it did not escape the Canada Revenue Agency.

Because the federal tax authorities also imposed Lackstone, as early as 2013. As part of its own procedures, Ottawa notes that the bank statements on its Swiss accounts mention “Peter Harold Turner, a lawyer working for the same firm […]as well as Marjorie Turner, the mother of Peter Harold Turner”.

In 2020, the Tax Court of Canada referred Lackstone’s assessments back to the Minister of National Revenue “for reconsideration and reassessment”. According to sources familiar with the matter who do not have authorization to speak about it, such wording means that negotiations have reduced the sums demanded.

Accounts directly in their name

Professor of taxation at Laval University, André Lareau does not see how Lackstone and Turner can get away with Revenu Québec without identifying the beneficiaries of the accounts that housed the 4.7 million.

“It doesn’t hold up,” he said. This is a misuse of the role of lawyer. »

Lawyers who hold monies for their clients must place them in trust accounts, he explains. However, the documents that The Press obtained from the ICIJ show instead that they held the money in accounts in their own name and that of Turner’s mother.

This is also Ottawa’s understanding. “No evidence was presented by the appellant to support that these were indeed accounts held in trust,” said the Canada Revenue Agency in a document filed with the Canadian Court of tax.

The two cases of Lackstone and Turner against Revenu Québec will not be settled for several months. They asked to extend until July the deadline to present their file.

Joined by The Presstheir lawyer Marie-France Dompierre, from Davies Ward Phillips, did not answer our questions.

If you have information on tax evasion, contact our reporter at 438-396-5546 (cell, Signal, WhatsApp) or [email protected].

The bad plans of a former immigration lawyer

While millions were growing in Swiss accounts in his name, Harold Peter Turner led a discreet career as an immigration lawyer in Montreal. Law Society says he retired in 2011, but federal court ruling reveals that in 2015 he ‘advised’ a mother and daughter wanting to move to the country to ‘lie to officials’ at the border.

This dubious recommendation almost cost the two permanent residents of Indian origin dearly. They said they had lived in Canada for many years, although they had not set foot in the country since 2006 and instead lived in Dubai.

Mr. Turner made them hide the documents that showed it, according to their testimony before the Immigration and Refugee Board (IRB).

The mother told the court that “they were surprised that they were advised to lie”.

The ex-lawyer also recommended that they pass through the border post at night because at that time the agents would be “part-timers and elderly people”, suggesting that it would be easy to enter the Canada.

On December 27, 2015, they reported to the Cornwall post on the Ontario-New York State border. Accompanied by Mr. Turner, they then “made false statements about their residence and other points”, according to the decision of the IRB.

“Finally, after a question period that lasted several hours during the night, the truth was discovered,” says the court.

“borderline case”

To be able to return to Canada, permanent residents must have spent at least 730 days in the country in the last 5 years, which was not the case for the two women. The Commission still accepted their return because they had to leave Dubai and the court ruled that they were at risk as women in India.

But the “very serious misrepresentations at the point of entry”, which they made on the advice of Mr. Turner, nearly tipped the scales of justice on the wrong side for this “borderline case”, in the words of the IRB.

“The effective and efficient administration of Canada’s immigration system requires individuals to provide complete and truthful information,” the decision noted. Thus, false declarations can undermine the integrity of the immigration system, and they must be taken seriously. »