Kitco: Revenue Quebec investigates widespread gold fraud

[WildspitzE]

oh oh, run nadler run! hehe

http://business.financialpost.com/20...ve-gold-fraud/

"
MONTREAL — Claiming widespread tax fraud in the gold refining and trading sector, Revenue Quebec and police investigators this week conducted searches and seizures at 70 locations, mostly in the Montreal area.
No arrests were announced, but the tax department said Thursday it had reason to believe several people were involved in producing false invoices for a number of companies.
One of the targeted sites was the downtown Montreal location of Kitco, a major buyer and seller of gold. A note on the floor of its office on Thursday said that “operational constraints” had forced the service counter to close this week.
The company strongly denied any allegations in a statement Friday.
“Kitco Metals Inc. has never participated in any tax fraud, nor has it ever carried out any fictitious transactions. In all respects, Kitco vigorously contests all aspects of Revenu Québec’s investigation,” it said...."

[LargoWinch]

Re: Kitco: Revenue Quebec investigates widespread gold fraud

Kitco's unallocated pool accounts never looked so attractive.

[charliebrown]

Re: Kitco: Revenue Quebec investigates widespread gold fraud

for someone a little soft in the head, can you please explain?

Do you mean attractive to the canadian gvt as a source of income?

[thriftyandboringinohio]

Re: Kitco: Revenue Quebec investigates widespread gold fraud

Kitco's unallocated pool accounts never looked so attractive.

Hearty thanks to many here at iTulip who warned us all about unallocated PM accounts and pools. I darn near bought into Kitco pools a couple years ago.

[LargoWinch]

Re: Kitco: Revenue Quebec investigates widespread gold fraud

for someone a little soft in the head, can you please explain?

Do you mean attractive to the canadian gvt as a source of income?

charliebrown, I was being sarcastic with my remarks about kitco pool unallocated accounts i.e. if they are shut down wouldn't you be worried about your "unallocated precious metal" with them?

[jpatter666]

Re: Kitco: Revenue Quebec investigates widespread gold fraud

Hearty thanks to many here at iTulip who warned us all about unallocated PM accounts and pools. I darn near bought into Kitco pools a couple years ago.

+1

[charliebrown]

Re: Kitco: Revenue Quebec investigates widespread gold fraud

sorry, you forgot to enclose it in text xml tags.

I have a small allocation there, lets see if they will fabricate and ship today
This was my out of the U.S. emergency money.

[charliebrown]

Re: Kitco: Revenue Quebec investigates widespread gold fraud

as of 2:44 CDT kitco fabricated and shipped.

[globaleconomicollaps]

Re: Kitco: Revenue Quebec investigates widespread gold fraud

RIP kitco. I had a lot of trouble finding a dealer that would work with me, and kitco cut me a square deal. They where the last place I called because of that Nadler guy, but they came through for me.

[Fiat Currency]

Re: Kitco: Revenue Quebec investigates widespread gold fraud

Some updated info ...

Trader denies claims in huge Quebec gold sweep

A major gold trader is fighting allegations that it participated in a widespread tax fraud scheme.

Métaux Kitco Inc. says it “vigorously contests” a Revenue Quebec investigation into an alleged false-billing scheme in the gold refining and trading sector.

Kitco said in a news release it has filed a request in Quebec Superior Court for an interim court order allowing it to continue normal operations under the supervision of RSM Richter.

The company’s service counter at its downtown Montreal offices has been shut following a sweeping probe by provincial tax authorities and police that included searches and document seizures at 70 locations in the Montreal area and at other sites near the Canada-U.S. border.

One of the targeted sites is Kitco’s Montreal office.

No arrests have so far been reported. Revenue Quebec alleges that two networks involving several companies orchestrated a false-billing scheme that cost the province more than $150-million in taxes on close to $2-billion worth of transactions.

A total of about 125 companies are alleged to have taken part in the scheme, which allegedly involved the conversion of pure gold into a gold object, then refining it back into its pure state, resulting in artificial transactions that were created in order to get refunds on taxes never actually paid.

Kitco is well known in international precious metals circles, with offices in Canada, the U.S. and Asia.

Among its activities is the purchase of scrap gold.

It says it pays the sales tax on any purchase it makes from suppliers of scrap precious metals, for which it receives a tax credit. It is up to the suppliers to then remit the tax to Revenue Quebec, it says.

Revenue Quebec alleges that some of these suppliers did not transfer the tax to Revenue Quebec that Kitco paid them, Kitco says.

Provincial tax authorities are holding Kitco responsible for the unpaid taxes without any grounds for doing so, said the company.

“Kitco has always respected the laws and regulations since the founding of the company more than 30 years ago,” it says.

Kitco, run by president Bart Kitner, was founded in 1977. It says it has about 200 employees and provides a “vast range” of precious metals products to “tens of thousands” of customers.

The only other company to be mentioned in publicly available Revenue Quebec documents is Carmen International Inc.

Kitco has won approval from a Quebec Superior Court judge to have RSM Richter appointed as interim receiver during the investigation

The company’s Montreal office is open to customers and operating normally, said spokeswoman Sharlene Dozois.

“It’s business as usual. We’re processing orders the same as we were last week,” she said.

The request for an interim receiver was made as a “preventative action,” she said. “This could take a while.”

The search and seizure operation by Revenue Quebec agents was “unexpected” given that Kitco was in the midst of negotiations with Revenue Quebec to settle issues related to sales tax refunds, she said.

“We were co-operating with them every step of the way.”

http://www.theglobeandmail.com/repor...rticle2055402/

[rabot10]

Re: Kitco: Revenue Quebec investigates widespread gold fraud

Tax fraud not gold fraud

[charliebrown]

Re: Kitco: Revenue Quebec investigates widespread gold fraud

yes, but technically i think the pools are kitco's assets, and hence subject to confiscation if the tax allegations hold true.
Kitco does have perth mint certs, and allocated accounts maybe it is better to move from pool to one of these until things cool off.

Coming from Chigago, court cases are theater the winner will be the one with the most political clout.

[Master Shake]

Re: Kitco: Revenue Quebec investigates widespread gold fraud

sorry, you forgot to enclose it in text xml tags.

I have a small allocation there, lets see if they will fabricate and ship today
This was my out of the U.S. emergency money.

I just sold some of my pool holdings and requested a check. Let's see how that works out.

From what I read, it sounds like the issue is not so much Kitco but the many small dealers/merchants they work with. Easier to go after a big name than a couple of hundred small fry.

[Fiat Currency]

Re: Kitco: Revenue Quebec investigates widespread gold fraud

Justice takes time, and everybody is innocent until proven guilty in a court of law. It's been a year and a half since my last update.

Kitco Metals among gold traders facing Quebec tax fraud allegations

MONTREAL • Revenu-Québec is seeking prison sentences and fines totalling $750-million for Kitco Metals Inc. founder Bart Kitner and directors with several other gold trading firms following one of the biggest tax fraud investigations in provincial history.

Quebec’s revenue department on Monday said it filed a total of 1,920 charges against Kitco and 11 other companies as well as their directors and an accountant implicated in an alleged fraud scheme linked to gold processing. Some 120 charges were filed against Kitco and another 120 against Mr. Kitner involving total fines of $454.6-million.

“This is an investigation that’s lasted several years and the evidence is significant,” said Revenu-Québec spokesman Stéphane Dion. “Without a doubt, it’s one of the largest investigations we’ve ever done.”

The total amount allegedly derailed by all 12 companies charged was $350-million over a two year period ending in 2010, Mr. Dion said. The ministry claims Kitco specifically made false statements and tried to obtain tax rebates to which it wasn’t entitled. The amount related to Kitco was not made public.

Kitco forcefully denied the allegations. The company last year filed a lawsuit against Revenu-Québec seeking $122-million in damages caused to the company and on Monday, it said its legal action against the department will escalate as a result of the formal charges.

“[Mr. Kitner] believes that [Revenu-Québec's] continuous pursuit of this case is an abuse of their authority and has caused substantial harm to Kitco’s ongoing operations and development,” Kitco said in an emailed statement. “Kitco continues to vigorously contest all aspects of [the department's] actions.”

Founded in 1977 by Mr. Kitner, privately-held Kitco is a well-known buyer and reseller of precious metals including gold. It runs a popular website that carries spot prices as well as expert commentary.

The penal code charges stem from a probe by the tax ministry dubbed Project Carat, disclosed in June 2011. While it defended itself from the allegations, Montreal-based Kitco was granted bankruptcy protection that month. Its current creditor protection extension is set to expire in March 2014.

During the June 2011 raid, more than 175 provincial investigators with search warrants descended on several Montreal area businesses, private residences and offices of accounting firms and bankruptcy trustees. Revenu-Québec alleged some 125 companies in two separate gold trading networks engaged in tax fraud scam on sales transactions worth $1.8-billion. It claimed the firms also avoided paying the federal goods and services tax.

The six-step scam was based on a repetitive cycle of processing pure gold into scrap gold, which is, in turn, sent to a refiner to be transformed once again into pure gold, Revenu-Québec said in its explanation of the fraud at the time. “The scheme is based on bogus transactions made in order to claim input tax refunds,” the ministry said. “No actual commercial activity ever takes place… With each [cycle], fraudulent gains grow and the scheme expands using amounts received from the government.”

When the investigation first came to light, Kitco said it was being held “unjustly” responsible for the actions of its suppliers. It maintained that position on Monday.

“Among Kitco’s lines of business is the purchase of scrap precious metals,” the company explained in its statement. “Kitco pays the companies’ sales taxes on these purchases and receives tax credits for the corresponding amounts. It is then the companies’ responsibility to remit these taxes to [Revenu-Québec].”

Kitco says it sought advice from Revenu-Québec to make sure that the tax it was paying to companies were being properly remitted to the ministry. It says that starting in November 2005, it sent detailed transaction reports to the ministry every month stating its concerns. The ministry did not respond, despite having received over 60 such reports over a five-year period, Kitco said Monday.

“If [Revenu-Québec] had acted upon the information in Kitco’s reports in a timely manner, their tax losses could have been prevented,” the company said.

It is rare for Revenu-Québec to ask for prison sentences related to fraud. In fact, it’s something that has only recently started and has involved only high-profile files. This past summer, for example, the ministry demanded a prison term for Quebec construction magnate Antonio Accurso as it brought fraud charges against him and his companies.

Mr. Kitner faces a maximum prison sentence of five years under Quebec law and two years under federal law if he is found guilty. But because he faces more than 100 separate charges, a court could decide to lengthen that sentence, Mr. Dion said.

It's like those CN trains going back and forth to the USA for bio-diesel tax breaks. Paper commerce.

http://www.cbc.ca/news/canada/cn-s-2...esel-1.1172920