Canadian Mint chairman James Love 'helped set up tax haven scheme'
The chairman of the Royal Canadian Mint allegedly helped a former prime minister's heirs hide millions of dollars offshore in what a trustee called a "tax avoidance scheme", Canada's public broadcaster reported.
James Love, who also advised Finance Minister Jim Flaherty on international taxation, acted on behalf of the family of Arthur Meighen, who served two terms as prime minister of Canada in the 1920s.
In a lawsuit, two Meighen granddaughters accused Love of breach of trust over the offshore transactions they claimed were unlawful and negligent.
Court documents in the suit filed in 2008 and discreetly settled three years later said that Love helped to arrange the transfer of more than C$8 million (HK$59 million) starting in 1996 to Bermuda, Barbados and Antigua.
Obtained by public broadcaster CBC, the documents revealed on Wednesday show Tara and Alyssa Meighen had concerns about taxes, interest and penalties if the scheme was ever exposed.
The CBC said Love countered in sworn statements that the offshore transfers "resulted in significant savings of Canadian taxes" for Meighen's heirs, estimated at C$1 million. He also denied any breach of trust.
Moving assets to offshore trusts is not inherently illegal, but Canada and other Western nations have moved to tighten the rules to prevent abuses.
Love reportedly acknowledged in an affidavit rules in the Canadian tax code "to prevent transfers of assets from Canada to avoid Canadian taxation".
But he nevertheless advised trustees of the Meighen family fortune that "it might be possible to structure a transaction that would have the intended results".
"Such a result might be obtained through a more complex transaction," Love said in the affidavit.
The trustee, Canada Trust, which has since been absorbed by TD Bank, agreed to what it described as a "tax avoidance scheme" in an internal memo filed with the court. The money was routed through a dozen transfers involving numbered companies and bank accounts in Ontario, New York, Barbados, Bermuda and Antigua, as well as share transfers and loans.
Eventually the funds appeared to end up back in Canada. The Antigua holding companies that absorbed the funds reportedly hired Love's Toronto-based financial firm, Legacy Private Trust, as an investment manager.
Love was appointed to the board of the Royal Canadian Mint in 2006 and was named chairman in 2009.