Very curious. I wonder where the money went? Perhaps it is time to audit the Liberal coffers?:
Hotelier's money scheme elaborate, affidavit reveals
Auberge des Gouverneurs: Thibault moved some of his federal grants money into Bahamas account, court documents say
Andrew McIntosh
National Post
Friday, May 16, 2003
OTTAWA - The Quebec businessman whose Shawinigan hotel in 1997 secured $2-million in federal loans and grants with the help of Jean Chrétien, the Prime Minister, used a phoney invoicing and money laundering scheme to secretly transfer $152,652 to a numbered Bahamas bank account, the National Post has learned.
Accountant Pierre Thibault, who pleaded guilty to criminal tax fraud charges this week, moved some of his government money into account #8000002 at the BNP Private Bank and Trust Bahamas Ltd. in Nassau in early 1998, according to a sworn affidavit that Canada Customs investigators have filed in Quebec Court.
It is unclear what happened to the $152,652 after Mr. Thibault moved it to the Caribbean bank in 1998. That's where the trail stopped for the Canadian tax investigators, documents show.
Mr. Thibault's hotel, on the shores of the Saint-Maurice River, went bankrupt a few years later and is under new ownership.
CCRA investigator Pierre Rousseau, assisted by auditor Diane Lambert, described Mr. Thibault's offshore money transfers in the sworn affidavit that they used to obtain a court-approved search warrant to raid the offices of Mr. Thibault's Auberge des Gouverneurs in Shawinigan on June 14, 2001.
CCRA investigators carried out raids after auditors examined the books of the Auberge and the personal bank and stock brokerage account records of Mr. Thibault, uncovering significant irregularities with large invoices the hotel had claimed as expenses while it was still under construction.
Mr. Rousseau and Ms. Lambert described how Mr. Thibault used an elaborate phoney invoice scheme to move hundreds of thousands of dollars out of the Auberge des Gouverneurs bank accounts that ultimately ended up in Mr. Thibault's personal account at the ScotiaMcLeod brokerage branch in Shawinigan.
Once there, Mr. Thibault instructed ScotiaMcLeod to make out two cashier cheques to him -- one for $75,000 on March 19, 1998, and another for $77,652 on April 28, 1998 - and deposited them at the Bahamas bank, the sworn affidavit states.
Quebec Court Justice Claude Vaillancourt fined Mr. Thibault $188,000 on Tuesday after the accountant pleaded guilty to criminal tax-fraud charges.
Because Mr. Thibault pleaded guilty during a brief, surprise appearance in court in Montreal, even though he was originally charged in Shawinigan, none of the evidence that led to the charges came out in court.
But the National Post has obtained the full details of the federal investigation from the search warrant materials CCRA investigators filed in Quebec Court in 2001.
Mr. Thibault "took a total of $960,347 in funds" belonging to the Auberge des Gouverneurs hotel even as the hotel was under construction in 1998, financed with a total of $2,025,000 in federal government loans and grants.
Mr. Thibault failed to declare any of that money as income on his 1998 tax return, a move that helped him evade $251,926 in personal income tax, CCRA auditors found.
The investigators state in their affidavit that as Mr. Thibault emptied the Auberge' bank accounts in 1998, his personal tax return that year reported employment income of just $15,064 and tax payable of $572.
CCRA investigators and auditors nevertheless uncovered a massive phoney invoicing and money-laundering scheme run by the businessman and accountant. Here's how it worked in one case:
STEP 1 On March 12, 1998, a real Saint- Maurice company called Décoration Dionne Inc. billed the Auberge des Gouverneurs for work totalling $194,104.69.
STEP 2 The Auberge paid the bill in two instalments: $97,052.35 on March 27, 1998, and $97,052.34 on April 16, 1998.
STEP 3 At Mr. Thibault's request, Décoration Dionne then issued a credit note refund, making out two personal cheques payable to him -- not to the Auberge -- for amounts identical to the ones above.
(The real bill for work was paid by the construction company that oversaw the project, P.A. Bisson Inc. No record of the credit note and cheques issued by Décoration Dionne to Mr. Thibault are in the Auberge's books. The decorating company was not charged and not a target in the probe.)
STEP 5 Mr. Thibault took the two cheques from Décoration Dionne for a total of $194,104.69 and deposited them in his brokerage account #300-606863 at ScotiaMcLeod in Shawinigan on March 27 and April 17, 1998.
STEP 6 After depositing the first Décoration Dionne cheque for $97,052.35 on April 17, Mr. Thibault had the brokerage issue him a cashier's cheque for $77,652.32.
CCRA investigators secured copies of the cashed investment dealer cheques. On the back of the returned ScotiaMcLeod cheques, they found a bank stamp and the following handwriting: "For deposit only to Pierre Thibault 8000002. Prior endorsement guarantee BNP Private Bank and Trust Bahamas Ltd."
Mr. Thibault used the same scheme in another instance involving P.A. Bisson, the company that built the Auberge, involving $75,000 that was later transferred to the BNP Private Bank and Trust Bahamas Ltd., the affidavit states. Neither Mr. Bisson nor his company faced charges and they were not a target of the tax probe.
In 1999, the Post revealed that Mr. Thibault received the $2-million in federal grants and loans while he was under criminal investigation in Belgium for defrauding his partners in a fireplace manufacturer of $1-million. Belgian police were called in after a forensic audit uncovered evidence that Mr. Thibault created a false invoicing system at Don-Bar SA to conceal lavish and unauthorized personal spending at the Brussels company.
Mr. Thibault has admitted that he concealed from Canadian authorities his troubles with the law in Belgium when he applied for his loans and grants. He left Belgium before the investigation was completed. He returned to Canada and with the help of Mr. Chrétien and his aides in Saint Maurice, his hotel venture received:
- a $925,000 mortgage loan from the Business Development Bank of Canada, a Montreal-based Crown corporation.
- a $700,000 non-repayable job creation grant from Human Resources and Development Canada. HRDC officials and documents revealed that Mr. Chrétien announced the grant for Mr. Thibault just weeks before the 1997 election, close to three weeks before he had even filed a business plan for the hotel.
- an unsecured $400,000 loan from Canada Economic Development in Quebec Regions.
The Auberge des Gouverneurs was to have cost $3.9-million to build, financed in part by Mr. Thibault and the $2-million in federal grants and loans. But evidence gathered by the CCRA fraud investigators raises questions about whether Mr. Thibault ever put any of his own money in the project.
The tax investigators describe how Mr. Thibault used an additional series of false invoices for fictitious expenses and financial money transfers to misappropriate $700,000 in money from the Auberge des Gouverneurs bank accounts and move it to his brokerage account. The only money he had at the time was government money.
Once it was in his ScotiaMcleod account, he then pumped it back into the hotel account, purporting that it was money he and others had invested to purchase a series of shares in the hotel for himself, Mr. Bisson and an entity called "Jonathan and Nancy Thibault Trust."
Mr. Bisson was questioned by investigators on Oct. 24, 2000. He said he had never bought any Auberge shares and did not own any.
"I never invested a single dollar to get shares in the Auberge des Gouverneurs or invested a single dollar in any way whatsoever," according to his statement, cited in the affidavit.
Auditors stated in their sworn affidavit it was not "clearly defined" who "owned the shares in the Jonathan and Nancy Thibault Trust."
amcintosh@nationalpost.com
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