KELOWNA – A Kelowna woman who helped defraud the Canadian government of almost $200 million in taxes was sentenced to 22 months imprisonment to be served at home.
Deanna Lynne Lavalley, 54, is one of two women who committed fraud by cheating on her taxes and counselling others to do the same using an illegal system called The Remedy that let them claim expenses like credit card bills and mortgage payments as deductible expenses.
Lavalley and Donna Marie Stancer, who will be sentenced in December, set up a tax consultation company called DeMara Consulting in 2010. Crown lawyer Jessica Patterson told the jury Lavalley made false statements in her returns for the years between 2007 and 2010, claiming false capital and business losses totaling more than $450,000.
Lavalley and Stancer, who defence lawyer Grant Gray said was the mastermind behind the scheme, set up a 50-50 partnership and filed 363 income tax returns on behalf of 224 clients. The filings claimed $192 million in claims of false business and capital losses. The losses gave rise to claims of $9.9 million in refunds to which clients were not entitled.
“This offence was undertaken consciously in that Lavalley attended a seminar and left a job to establish DeMara,” Patterson said. “This shows a very deliberate and planned proceeding.”
Lavalley, from Kelowna, and Stancer, from Vernon, first met in 2008 at Rapid Tax Centre in Rutland.
Stancer is guilty of making false statements in her tax returns for the years 2007 and 2010 by claiming false capital and business losses totalling more than $1.8 million and counselling others to commit fraud in excess of $5,000.
The trial ended July 3 after both women took the stand in their own defence saying they thought they had found a loophole in the system.
Patterson admits Lavalley's role was significantly less than that of Stancer, and likened her to more of an office administrator who was made a director of the company only because Stancer had filed bankruptcy previously.
"The roles of Stancer and Lavalley are to be distinguished but any acknowledgment of her less aggravated role should be met with reduction in amount of jail,” Patterson said. “While Miss Lavalley was not the mastermind, she was an instrumental part and 50-50 profit shareholder as well as namesake. She was there at the very beginning.”
Both women took home paychecks of $5,500 each month while in business.
“The only difference was the role that they played,” Patterson said.
Justice Alison Beames said she was satisfied Lavalley was essentially a secretary who kept records, fetched coffee and greeted clients but her assistance in the sizeable and sophisticated scam could not be ignored.
“Good luck," she said. "You are fortunate indeed to be permitted in the circumstances… to serve your sentence in the community."
During the 22 months on house arrest, Lavalley can only travel to and from work, must remain in Kelowna and cannot drink alcohol.
Lavalley was also fined more than $17,000 to be paid within five years.
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