Two Winnipeg businessmen going to prison for tax evasion
Jeff Dyck was featured on a TV show with Donald Trump Jr. in 2014
Neil Friesen and Jeff Dyck have both been sentenced to three years in prison after pleading guilty to two counts of tax evasion for their roles in a company called One World United Inc.
The court also ordered them to pay fines of more than $1 million each, but because they didn't have the money to pay, they each received an extra year on top of their sentences. Both men were immediately taken into custody.
Provincial court Judge Kael McKenzie ruled that Friesen, 65, and Dyck, 41, "knew exactly what they were doing" and "were not bumbling businessmen," as the defence had argued.
Instead, McKenzie said the two ran a "sophisticated tax scheme" and said they showed "little insight" into what they had done. Their actions were "motivated by financial greed," the judge said.
The Crown had been seeking a jail term of four years and fines of $1 million dollars each while Dyck and Friesen's lawyer Marty Minuk had implored the judge to consider house arrest. Minuk declined comment today.
Crown attorney Kirsty Elgert had called it an "aggressive tax planning scheme" in which participants contributed an amount in cash to One World and in return, received invoices for business losses in amounts greater than the cash contribution.
Canada Revenue Agency ultimately did not allow the deductions and investors had to repay the money.
Court heard the invoices issued to participants for losses totaled about $22.3 million. Of that, CRA determined about $14.5 million were fake losses that had not occurred.
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The Manitoba Securities Commission first confirmed to CBC that Friesen was under investigation in October 2013. This week, the commission confirmed he remains under investigation. The MSC said it could not "comment on anything regarding Jeff Dyck at this time."
"My Dad was nearing the end of his life during the times that he was investing with Neil Friesen and...he was not well physically and mentally," Reimer said. "Neil Friesen used that to his advantage so that is extra sickening."
"Any person off the street can call themselves a financial advisor so there could perhaps be rules on the names or titles given to people who give financial advice or sell investments," said Reimer.
"Obviously people like my dad — that information needs to come to them. That warning needs to come to them. Those vulnerable people aren't going to go out and seek that information," she said. "Somehow there has to be a system that alerts them to watch out for these things and do a better job alerting elderly and vulnerable people from guys like this."
The Manitoba Securities Commission does investigate complaints about professionals working in the finance sector and published disciplinary decisions but it would have been little use to Ben Reimer. Despite being under investigation by the MSC since at least 2013, Friesen's name is not listed on the MSC's website section on disciplinary action.
Court heard that Dyck had relocated to Las Vegas. In 2014, he had appeared on an infomercial-style TV show produced in the US and hosted by Donald Trump Jr.
The Trump organization said Trump Jr. had no background knowledge of the guests who appeared on the show.
In that video, Dyck was promoting a different business venture called Local Exclusive Offers Inc. (LEO.)
In court today, Judge McKenzie noted Dyck had adjusted the business model for the U.S. market and continues to follow business practices disallowed by CRA.
McKenzie noted Friesen was "similarly delusional" in attempts to stay in business to recover money that had been lost.
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