Church used in charitable tax fraud

By  Michael Swan, The Catholic Register
  • January 22, 2007
TORONTO - Almost $3 million worth of fake receipts for fictional donations to 39 Toronto-area Catholic parishes has landed a Markham, Ont., woman in court.

RCMP fraud investigators have been working with archdiocese of Toronto accountants on a nine-month investigation to uncover a scheme which defrauded the Government of Canada of approximately $1 million.

According to police, phony receipts issued to more than 1,000 clients of a crooked tax preparation service netted its mastermind more than $800,000 in fees.

The dubious tax dodge didn't cost the Catholic Church in Toronto any money, since the donations in question never existed, said archdiocese of Toronto spokesman Neil MacCarthy.

"No actual money changed hands, and no donor data or information or parish records were ever compromised," MacCarthy told The Catholic Register. "This individual just wrote fake receipts for money that was never donated."

The fraudsters could have picked any charity, and beyond the possibility of spreading the receipts out among parishes around the city, MacCarthy had no guess as to why they chose to target Catholic churches.

The RCMP is not, at this time, charging any of the clients who paid for faked charitable receipts. The Canada Revenue Agency, however, takes a dim view of tax fraud and penalties and audits are possible.

The investigation was a test for the archdiocese's accounting procedures, and they came through it looking good, said MacCarthy.

"It shows that our practices in terms of accounting and accountability are sound," he said. "We're able to track legitimate donations so that if there is some impropriety that takes place we're able to flag that pretty easily.... Any tax receipt that goes out we are able to track from a parish level."

Purisima Dy, 62, is charged with one count of fraud over $5,000 and one count of uttering forged documents. She is scheduled to appear in court in Toronto March 5.

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