West Vancouver businessman admits tax evasion, pays fine
David Baines, Vancouver Sun 09.19.2012
West Vancouver businessman Paul Jacobs has been fined $172,019 and handed a six-month conditional sentence after pleading guilty to tax evasion.
According to an agreed statement of facts submitted in Robson Square Provincial Court, Jacobs, 53, provided management and consulting services through his private company, 657947 B.C. Ltd., to The Cambie Malone's Corp.
(Cambie Malone's is owned by well-known Vancouver businessman Sam Yehia. Among its properties are Malone's Pub & Grill at Pender and Seymour, and the popular Cambie pub and hostel at Cambie and Cordova.) From 2003 to 2009, Cambie Malone's paid Jacobs's numbered company $804,000 for management and consulting services, according to the agreed statement of facts.
Jacobs deposited that money directly into a bank account in the names of him and his wife, and used the funds for personal expenditures. He did not declare any of the income on his tax returns.
In 2009, Canada Revenue Agency began a GST audit and asked Jacobs to bring the numbered company's tax filings up to date.
Jacobs claimed he had received no income from Cambie Malone's from 2003 to 2008, and only $120,000 in 2009, which he fully offset by claiming an identical amount as remuneration. In March this year, CRA investigators executed a search warrant at Jacobs's residence and the business premises of his accountant and Cam-bie Malone's. He was subsequently charged with tax evasion.
Under a settlement agreement worked out between federal Crown prosecutor Dan Meneley and defence lawyer Joe Whysall, Jacobs agreed to pay a fine of $172,019, representing 100 per cent of the income tax he evaded.
He also agreed to a six-month conditional sentence, which requires him to be home from 10 p.m. to 6 a.m. every night, and he will perform 20 hours of community work service.
B.C. Securities Commission enforcement staff have alleged that two Vancouver property developers illegally sold more than $4 million worth of securities to 55 investors.
Staff also allege that Jeffrey Karl Wiegel and Michael Jerome Knight defrauded two of those investors, and that Knight breached a previous BCSC order that barred him from selling securities.
By way of background, Wiegel is the sole director and officer of: . Streamline Properties Inc., a real estate development company based in Vancouver.
. 835 Ltd. a company set up to develop a condo project in North Vancouver called The Brook.
. Local Inc., a company set up to develop a condo project in Vancouver originally called deVille and later The Local 1661.
. Almaval Building Inc., a company set up to develop a condo project in Vancouver called the Almaval.
Knight served as the general man-ager of Streamline.
In its notice of hearing, the com-mission alleges that between October 2006 and August 2010, the two men:
. Sold $2,085,000 worth of securities in 835 Ltd. to 32 B.C. residents.
. Sold $1,940,00 worth of securities in Local Inc to 21 people, mainly B.C. residents.
. Issued a promissory note on behalf of Almaval Inc. to two people who had loaned $100,000 to 835 Ltd.
The commission alleges Wiegel and Knight distributed the securities with-out issuing a prospectus, and without being registered to sell securities.
The commission also alleges they falsely claimed the promissory would be secured by a mortgage on land at 3701 West Broadway. However, when the two investors sought to enforce the security, they learned that neither of Wiegel, Knight nor Almaval owned the property.
The commission further alleges that Knight, in selling the securities, breached a previous suspension order.
In April 2004, a BCSC hearing panel suspended him from the B.C. securities market for three years for selling shares of a private company known as The Aspen Group without filing a prospectus and without being registered to sell securities.
The commission alleges that Knight distributed some of the securities that are now in question while that suspension was still in effect.
None of the allegations have been proven. Barring a settlement, a hearing will be held at a later date.
The Insurance Council of B.C. has suspended insurance agent David Mark Stevens pending an investigation into allegations that he "illicitly accessed and used" more than $141,000 of his clients' life insurance policies for his personal benefit. In its suspension order, the council said it served Stevens with a subpoena ordering him to attend an interview at the council's office, but he did not attend.
He also failed to respond to other inquiries, the council said.
The council said the allegation that he diverted client funds and his failure to respond to council inquiries "are serious and speak to his suitability to hold an insurance licence."
It concluded that it was in the public interest to suspend his licence pending the outcome of its investigation.
Stevens has been licensed as an insurance agent since at least 1985. He was the owner and sole licensee at Pacific Link Insurance Services at 4538 Kingsway in Burnaby. That company's licence was also suspended because of its connection to Stevens.
dbaines@vancouversun.com