The federal investigation into Quebec construction bosses and Revenue Canada auditors is a continuation of a 2006 police probe against the Montreal Mafia, court documents show.
According to an RCMP search warrant, the investigation was launched "in response to information obtained during Project Coliseum," which focused on associates of godfather Vito Rizzuto.
Revenue Canada admitted earlier this month that it was embarrassed by the allegation that two of its employees and the owner of a construction firm under audit held $1.7-million in tax havens.
The two employees are Revenue Canada team leaders who supervised other investigators inside the Montreal offices of the tax-collection agency.
The RCMP search warrant shows that the current investigation started in 2007, when police transferred information to Revenue Canada about a tile company called B.T. Céramique Inc.
The search warrant said that as part of its probe, Revenue Canada discovered a numbered company, 3703436 Canada Inc., that invoiced B.T. Céramique and transferred money to Francesco Bruno, the majority owner of the two firms.
Because 3703436 Canada Inc. had never filed tax returns, Revenue Canada raided B.T. Céramique, the offices of the company's accountant, and Mr. Bruno's house.
During the raid of Mr. Bruno's house, the warrant said, an investigator found a picture of Mr. Bruno with Revenue Canada officials Adriano Furgiuele and Tony Girardi. At the time, Mr. Bruno explained that Mr. Furgiuele was his cousin.
Revenue Canada, however, alleged that it also learned that Mr. Bruno, Mr. Furgiuele and Mr. Girardi opened bank accounts in the Bahamas and Switzerland that contained up to $1.7-million.
The RCMP and Revenue Canada documents said that during the raid of the accountant's offices, agents also discovered a handwritten document entitled "Plan of Action" that they allege was designed to help 3703436 Canada Inc. avoid the full scrutiny of Revenue Canada.
"The document is to be used to commit fraud," the search warrant said.
Revenue Canada investigators allege, after doing a comparison with other handwritten documents, that Mr. Furgiuele wrote the plan of action.
Last September, the RCMP took over the probe into the allegations of fraud and breach of trust involving Mr. Furgiuele and another Revenue Canada team leader, Gennaro Di Marzio. According to its search warrant, the RCMP alleges that 3703436 Canada Inc. and Revenue Canada employees carried out many of the 17 steps in the action plan.
The alleged goal was to convince Revenue Canada that the numbered company received loans from a European firm, and did not have to pay taxes on the money. The RCMP, however, alleged the European company is a sham, and doesn't even have a phone.
"It is impossible for 3703436 Canada Inc. to have worked for someone who does not exist," the search warrant said.
Revenue Canada is also alleging that 3703436 Canada Inc. issued $4.5-million in fake invoices to three construction firms owned by industry magnate Tony Accurso.
Revenue Canada recently suspended four employees pending an internal probe. No charges have been laid, and none of the allegations has been proven in court.
Mr. Bruno, Mr. Furgiuele and Mr. Girardi have not commented on the allegations and Mr. Di Marzio could not be reached yesterday.
Among its investigations, Project Coliseum revealed that the Rizzutos had customs agents working at Montreal's Pierre Elliott Trudeau Airport on their payroll.
With a report from Ingrid
Peritz in Montreal
Revenue Canada audits B.T. Céramique Inc. and finds a numbered company - 3703436 Canada Inc. - that has had large movements of money, but never filed tax returns.
Revenue Canada raids B.T. Céramique, the home of majority owner Francesco Bruno and the offices of accountant Frank Fiorino. Auditors discover a hand-written "Plan of Action" that they allege was designed to help 3703436 Canada Inc. avoid the scrutiny of Revenue Canada.
The RCMP is called in to investigate whether Revenue Canada employees played a role in the creation and enactment of the 17-step plan. Mr. Bruno's cousin, Revenue Canada auditor Adriano Furgiuele, is alleged to have handwritten the document.
The RCMP participates in raids of construction companies and the offices of Revenue Canada employees as part of the investigation.
Source: RCMP and Revenue Canada search warrants