West Vancouver man gets 29 months for tax evasion: BC court

Penalties for people who cheat on their taxes should serve as a warning to others, the court ruling says.

A West Vancouver man convicted of cheating on his taxes must serve 29 months in prison, the British Columbia Court of Appeal has ruled.

Michael Curt Helmut Scholz, 68, was convicted in 2020 of three counts of violating the Excise Tax Act and two counts of uttering false documents. Scholz provided the Canada Revenue Agency with forged backdated documents to claim GST and HST refunds he would otherwise not be entitled to on the construction of his $6 million home in UK Properties , concluded the Supreme Court of British Columbia.

In 2021, he was sentenced to 29 months in prison and fined $644,975. Scholz was “driven by greed” and he “thought he was smart enough to get away with it,” the court ruling states. In justifying the prison sentence, the trial judge noted that “general deterrence of other like-minded individuals must be of paramount concern in these tax evasion cases.”

Scholz appealed his conviction, arguing that all taxpayers have the right to pursue tax strategies that would benefit them and that the CRA is free to accept or reject such strategies without it becoming a criminal matter. The appeals court disagreed and upheld the conviction in April 2022.

Scholz also appealed his sentence, arguing that he should have been eligible for a suspended sentence to be served without jail time.

Scholz claimed the trial judge failed to properly consider the public humiliation he suffered as a result of his conviction being covered, which in itself would have a chilling effect on others who may be tempted to falsify tax documents.

In a stop released September 26, BC Court of Appeal Judge Sunni Stromberg-Stein dismissed this argument. Although the courts have recognized that the publicity associated with a trial can be devastating, the trial judge gave the correct weight to public humiliation in crafting his decision, she explained.

The trial judge also found that the level of planning and sophistication of the fraud, as well as Scholz’s acumen in commercial law and business, were aggravating factors. But, on appeal, Scholz argued that the forged documents were “created in a hurry” and that his past experience in business and law was irrelevant.

Again, the appeals court disagreed with Scholz’s assertion that the trial judge erred.

“It was open to the judge to consider Mr. Scholz’s background and experience and to assess his moral culpability taking those factors into account. The fact that Mr. Scholz misused his knowledge and skills to commit the offenses and got caught does not constitute an error for the sentencing judge to consider his expertise as a relevant aggravating factor.” , wrote Stromberg-Stein.

Because he was in his 60s at the time of sentencing in February 2021, Scholz argued that he would be at higher risk of contracting serious illness from COVID-19 in prison, although the trial judge did not agree. did not accept this assertion. When he raised COVID-19 on appeal, the judges agreed that the risk of COVID was a collateral consequence of his actions and “the impact of a collateral consequence does not supersede the general rule that a sentence must be adapted,” Stromberg-Stein wrote. .

The three-judge panel agreed with Stromberg-Stein’s view that Scholz’s appeal should be dismissed.

“Mr. Scholz is not suggesting that a 29-month sentence is patently unfit. Neither could he, because the judge properly considered all relevant factors and sentencing principles. He fairly awarded under the weight of denunciation and deterrence, given the moral culpability of Mr. Scholz. The aggregate sentence of 29 months for substantial tax evasion is entirely appropriate in the circumstances,” she wrote.

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