The chair of the Royal Canadian Mint, who also served as an adviser on international taxation to the federal Finance Department, helped engineer the transfer of millions of dollars of a prominent Canadian family through offshore tax havens in what others involved characterized as a "tax avoidance scheme," documents obtained by CBC News show.
Slightly more than $8 million was moved through offshore entities in Bermuda, Barbados and Antigua, later prompting allegations that the arrangement, if exposed, could lead to potentially hundreds of thousands of dollars in "taxes, interest and penalties." The documents show there were also concerns about secrecy and instructions to shred files.
The hundreds of records are part of a sprawling lawsuit against James Barton Love, a Toronto tax lawyer who chairs the mint's board of directors, and others by descendants of former prime minister Arthur Meighen. Quietly settled in 2011, the lawsuit saw family members allege that the offshore transactions, which began in 1996, were unlawful and negligent and that Love "breached his fiduciary duties and acted oppressively."
Love countered in sworn statements that the offshore manoeuvres "resulted in significant savings of Canadian tax" for Meighen's heirs — an amount he estimated at $1 million.
He also emphatically denied any breach of trust and said he had "specifically advised" there were risks to the offshore arrangement.
None of the allegations was ever tested in court.
'Complex transaction'
Love, a close friend of Finance Minister Jim Flaherty who was appointed to the Mint's board in 2006, was also a trustee for most of the last decade of the Arthur Meighen Trust, an entity set up by the former Conservative PM in 1949 to distribute his wealth to his family. Before taking on that formal role, documents show Love had been an adviser and "close" friend to several Meighen family members.
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It was in that advisory role that Love, in the mid-1990s, informed the managers of the Meighen Trust that they could get "Canadian tax relief on the income from about 40 per cent of the [trust] assets" if they moved the money offshore, Meighen's great-granddaughters say in their statement of claim.
The use of secret accounts in offshore jurisdictions like Switzerland or the Cayman Islands has been thrust into the media limelight in recent years, following a spate of data leaks — including from several Swiss banks — that exposed account-holders’ identities and information. The most recent large leak was made public in April, when CBC News teamed up with the U.S.-based International Consortium of Investigative Journalists to report on secret accounts linked to 130,000 people worldwide.
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Also: How the rich hide money offshore >>
How the rich hide money offshore
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