Chocolate Project: The authors’ response

The high-profile investigation: On March 15, 2018, Laval University law professor William Bourdon and his doctoral student Daniel Bernard published an in-depth investigation of details that were hidden behind an encrypted email system. Hundreds…

Chocolate Project: The authors' response

The high-profile investigation: On March 15, 2018, Laval University law professor William Bourdon and his doctoral student Daniel Bernard published an in-depth investigation of details that were hidden behind an encrypted email system. Hundreds of emails, financial records and other confidential documents, which shed light on a financial scheme involving transactions executed in offshore secrecy jurisdictions, were created in secret between the offices of several law firms, including just one that has the confidence of the RCMP – meaning that many law firms that were complicit were able to protect their identities.

Authors’ response: On Friday 14 June, the tax and law faculties at Laval University published the findings of their investigation, and are publishing them in the full document “Parallel But Separate: IRS, FATCA and the Business of Meddling”, which you can purchase from the pdf link.

An excerpt: This is a groundbreaking investigative and empirical investigation that shines a bright light on the genesis of a controversial offshore financial scheme known as the Chocolate Project and sheds light on the ways in which the rule of law in Canada has “turned a blind eye” to how this scheme was set up and how “these same lawyers became ensnared in a tax investigation.” It is a groundbreaking investigation that reveals how the Law School of McGill University has “sidelined itself from the dispute, shielding one of its most prestigious corporate partners from public scrutiny.” It is this kind of investigation that will break the stigma associated with offshore tax issues. It serves as a model for other universities and law schools that want to provide educational programs in tax and financial law and allow students to learn about the ins and outs of investigations conducted by the Canadian Revenue Agency.

The detailed methodology: Although the investigation began with an investigation into a secret shell company transfer, rather than a tax or tax evasion investigation, it was instigated by a flurry of emails, on 15 March 2018, between the offices of several law firms that included the current head of Quebec’s litigation bureau, indicating that a criminal investigation was in the works. They proceeded from there with an extensive investigation into documents, emails and bank records, an attempt to verify the contents of these papers.

The details: The investigation revealed that law firm RMB Associés, in Quebec City, created more than 1,000 offshore companies for investors from Russia, Ukraine, Azerbaijan, Saudi Arabia, Lebanon, Singapore, Moldova, Georgia, the Marshall Islands, Panama, Liechtenstein, Switzerland, Mongolia, Hong Kong, the Bahamas, Macau, BVI, British Virgin Islands, Vanuatu, Jersey, Monaco, Nigeria, Mauritius, Uruguay, Kenya, Angola, Panama, South Africa, Angola, Cameroon, Egypt, Equatorial Guinea, Uganda, Zambia, Benin, Burundi, Cameroon, Sierra Leone, Nigeria, Ghana, Lesotho, Ethiopia, Suriname, South Africa, Gabon, Cameroon, Sierra Leone, Kenya, Namibia, Kenya, Rwanda, Zambia, Sao Tome and Principe, Tanzania, Uganda, Rwanda, South Africa, Cameroon, Liberia, Nigeria, Rwanda, South Africa, Nigeria, Zambia, Ghana, Sudan, Ethiopia, Rwanda, South Africa, Mauritius, Mauritius, and Zimbabwe, Africa and South America. For more details, including all the communications between the law firms and the source companies, follow the links above to the findings of the investigation.

The detailed methodology: Shortly after the launch of the investigation, both the Canadian Revenue Agency and the RCMP jointly launched a joint investigation with law firm RMB Associés and law firms Dentons, Aspectes, and Charbonneau Societe. The 10-month-long investigation revealed a law firm called DPA on the British Virgin Islands and another called Cohen Dubois on the French island of Guernsey involved in this complex scheme. According to the press release, the investigation included the seizure of records, email exchanges and other confidential documents.

The investigation further revealed that the tax and law faculties at Laval University also assisted in the probe. For this, the faculty said, they “can only apologize for not waiting longer to investigate the story.”

The full document:

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