A lot of people think tax fraud is a slap-on-the-wrist kind of crime in Canada, and the worst that can happen is a small fine and a stern warning from the CRA. That is absolutely wrong.
In just a period of one year, the CRA convicted 23 people for tax fraud, and 10 of them were sent to jail. Today, I’m breaking down three real cases of Canadians who tried to cheat the system, got caught, and paid the price. Plus, I’ll show you how to stay on the right side of the law and avoid their mistakes.
Tax Cheat #1: The High Price of Fraud: How a CFO’s Greed Led to Prison
Derek Kwasney had built a solid reputation. As the Chief Financial Officer (CFO) of the beautiful Lake Louise Ski Resort, he held a position of trust, overseeing the company’s finances from its Calgary headquarters. But behind the scenes, Kwasney was playing a dangerous game—one that would ultimately cost him his career, his freedom, and over $775,000 in fines.
It all started between 2015 and 2017, when Kwasney began dipping into the resort’s funds for personal use. Perhaps he thought no one would notice. Maybe he believed he was too clever to get caught. Either way, he found three different ways to funnel money into his own pockets.
How He Pulled It Off
At first, it may have seemed like a harmless trick. Kwasney signed company cheques—but instead of paying vendors or business expenses, he made them out to his own credit card and bank accounts, pocketing a staggering $265,000.
Not stopping there, he got creative with double-dipping. He already received a $700 per month vehicle allowance through his payroll, but he claimed it again in his expense reports—netting himself an extra $13,000.
Then, in an even bolder move, he arranged for his salary to be deposited twice—once into one bank account, and again into another. That trick alone earned him an additional $73,000.
By the time it was all said and done, Kwasney had misappropriated over $350,000 from his employer. But the real mistake? He never reported any of it to the Canada Revenue Agency (CRA).
The Taxman Always Finds Out
On paper, it probably looked like the perfect crime. But financial discrepancies don’t go unnoticed for long, especially when someone in charge of the books starts manipulating them.
The CRA’s advanced tracking systems flagged the inconsistencies, and soon, investigators started digging. What they found was a trail of deception—fraudulent payments, missing funds, and a CFO who had been using the company’s money as his personal bank account.
The Cost of Getting Caught
When the case went to court, there was no escaping the consequences. The justice system came down hard on Kwasney:
- Fraud conviction (Canmore Court): 4.5 years in prison + $669,000 fine
- Tax evasion conviction (Calgary Court): 1 year in jail + $106,000 fine
In total, Kwasney was handed 5.5 years behind bars and $775,000 in fines. His CPA designation was suspended, and his professional reputation was in ruins.
Even worse? The criminal record that will follow him for life.
Lessons from the Kwasney Case
This story isn’t just about one man’s downfall—it’s a cautionary tale for anyone who thinks they can outsmart the system.
- All income is taxable—even stolen money. The CRA expects you to report every dollar you earn, whether it’s from a salary, investments, or in this case, fraud.
- Corporate fraud rarely goes unnoticed. Big financial discrepancies raise red flags, and audits can uncover the truth, even years later.
- Tax evasion carries heavy consequences. A few years of easy money can result in massive fines, lost careers, and prison time.
Kwasney thought he could get away with it. He didn’t. His story is a reminder that when it comes to fraud, the house always wins—and in this case, the house was the CRA. On a side note, don’t let this discourage you from going to Lake Louise Ski Resort, I highly recommend it and have spent many winters snowboarding there!
Tax Cheat #2: The Cost of Cutting Corners: The Sean Nethercott Tax Fraud Case
In the quiet town of De Winton, Alberta, Sean Nethercott probably thought he had found a clever way to reduce his tax bill. Between 2014 and 2016, he understated his taxable income and claimed false losses on his tax returns, making it appear as though he owed much less than he actually did. On the surface, it might have seemed like a minor oversight—or even a smart loophole.
But when the Canada Revenue Agency (CRA) started looking closer, they discovered that Nethercott had evaded over $51,000 in taxes and attempted to claim an extra $28,000 in tax credits that he wasn’t entitled to. What may have seemed like a harmless adjustment on his tax forms turned into a serious charge of tax fraud.
The Price of Deception
In March 2024, Nethercott was convicted and sentenced to a 12-month conditional sentence—essentially house arrest with strict conditions. While he avoided jail time, he was fined $50,000 and will likely face extra scrutiny on any tax filings for the rest of his life. The financial hit was significant, but perhaps even more damaging was the stain on his record.
Lessons Learned: What Went Wrong?
- Thinking small fraud won’t be caught – Many assume the CRA only goes after big corporations or multimillion-dollar fraud cases. But even $50,000 in unpaid taxes was enough to trigger an investigation, a conviction, and a heavy penalty.
- Underestimating the CRA’s tracking systems – The CRA uses sophisticated software to flag inconsistencies. If your reported income doesn’t match what employers, banks, or other financial institutions have on record, they will notice.
- Believing no one will notice false claims – Nethercott likely thought that fudging some numbers on his tax return wouldn’t raise red flags. But the CRA regularly cross-checks data, and unusual patterns often lead to audits.
- Ignoring the long-term consequences – Beyond the immediate fine, Nethercott now has a criminal record, which can affect future job prospects, travel, and financial credibility.
How to Avoid Making the Same Mistake
- Be honest on your tax returns – It might be tempting to underreport income or exaggerate deductions, but the risks far outweigh the benefits.
- Use a reputable tax professional – If you’re unsure about what you can or can’t claim, it’s always safer to consult an expert rather than guess.
- The CRA typically audits the past three years of an individual’s tax returns. However, if they suspect misrepresentation due to negligence or intentional wrongdoing, they can review and reassess returns from any year.
This case to me is the scariest, because it was for a relatively small amount, but still carried very serious consequences. Nethercott’s case serves as a warning. Cutting corners might seem like an easy way to save money in the short term, but the CRA has the resources to track down even small-scale fraud. What started as a simple attempt to reduce his tax bill ended up costing him thousands of dollars, a criminal record, and his peace of mind.
Let’s talk about another guy who got jail time, but before we continue, if you’re interested in learning how to save taxes without going to jail, learn how to income split, it’s a smart way to reduce your family’s tax burden. I created a free guide of 7 powerful income-splitting strategies to save big on taxes.
Tax Cheat #3: The Rise and Fall of Tony Accurso: How a Construction Mogul Got Taken Down by the CRA
For decades, Tony Accurso was one of the most powerful figures in Quebec’s construction industry. His companies were involved in major infrastructure projects, pulling in millions of dollars in revenue. But behind the scenes, Accurso was accused of hiding money, evading taxes, and bribing public officials.
His empire began to crumble in 2009 when the Canada Revenue Agency (CRA) launched an investigation into his businesses. By 2010, his companies pleaded guilty to tax evasion, admitting to falsely claiming expenses, including personal costs like those related to Accurso’s luxury yacht. The penalties were severe—over $4.1 million in fines.
That was only the beginning. In 2013, Accurso was personally hit with 928 charges related to tax fraud, accused of using false statements and illegitimate tax credits between 2005 and 2010. The CRA’s case against him dragged on for years, but in 2020, he finally pleaded guilty to making false tax declarations. He was fined nearly $2 million, while his companies were ordered to pay an additional $2.2 million, bringing the total penalties to more than $4 million.
Beyond the tax fraud, Accurso also faced corruption charges. In 2018, he was convicted of fraud and conspiracy in a municipal kickback scheme and sentenced to four years in prison. Although fraud charges in another case were later stayed due to delays, his reputation was permanently damaged.
What Went Wrong and How to Avoid the Same Mistakes
One of Accurso’s biggest mistakes was assuming that his wealth and influence could shield him from scrutiny. But the CRA and law enforcement agencies have the resources and patience to take down even the most powerful figures, as long as they find evidence of wrongdoing. His use of shell companies and false tax claims might have worked for a while, but the paper trail eventually caught up with him.
A key lesson from this case is that tax fraud, no matter how sophisticated, carries massive risks. The CRA’s ability to cross-reference financial records, audit transactions, and pursue legal action means that even high-level corporate executives aren’t untouchable.
Overall, it seems like the CRA is getting tougher on tax fraud cases. Trying to cheat the CRA is a gamble that just is not worth it these days. But smart tax planning? That’s how you legally keep more of your money. If you want expert guidance on tax-efficient investing, retirement, or business planning, see our services. At Blueprint Financial, we build financial strategies that protect your wealth.
