Sunday, May 2, 2010

relatives of Montreal Mafia, Vito Rizzuto: win tax case

The tax appeals in respect of the sale of the Olifas Marketing Group shares by the former shareholders were settled in favour of the taxpayers, allowing their tax appeals in full,” said Ian Morris, a partner with Morris & Morris LLP, a Toronto tax law firm.

Christina Ham, a Department of Justice lawyer on the case, confirmed a settlement had been reached but would not comment on its terms.

The case was scheduled for a hearing next month in Toronto, in the Tax Court of Canada, as 10 former OMG shareholders appealed a decision by the Canada Revenue Agency to disallow their claimed tax deductions from the sale of their shares.

The company has since been sold to new owners and operates under a different name.

The case revealed that silent investors in OMG, the company that won government contracts in Toronto, Montreal, Ottawa, London and Windsor, included Giovanna Rizzuto, who is Rizzuto’s wife, and their three children: Nick, who was killed in an unsolved murder in December, Leonardo and Bettina, all of Montreal. Their shares were bought in the name of Nino Campoli in 1999, soon after Toronto approved a pilot project for OMG to place recycling and garbage bins on its streets.

Other shareholders included Giancarlo Serpe and two of his relatives; company founder Salvatore Oliveti and his wife, Loredana, all of Vaughan; and Toronto businessman Filippo Calabro.

Mr. Campoli is the son of Frank Campoli, who married Mrs. Rizzuto’s cousin and remained close to the powerful Mob boss, who is now in prison in the United States for his role in three gangland murders in New York City.

Police have watched Mr. Serpe meet with several Toronto-area mafiosi over the years.

Most of the shares in OMG were sold three weeks after police in Montreal pulled a Jeep over in 2002 and demanded a breath test from its driver. Officers found Vito Rizzuto behind the wheel and the Jeep registered to OMG.

The company denied any relationship to the mobster and the mobster denied any connection to the company. Nonetheless, each of the Rizzuto family members involved claimed almost $419,000 in proceeds from the sale of OMG shares, according to court filings.

There is no allegation of illegality in the transactions. The issue was whether the government properly disallowed the deductions on their 2003 and 2004 tax returns.

The tax agency claimed the OMG shares did not qualify because too little of the value of the assets were used in an active business in Canada.

Earlier this year, Vito Rizzuto’s father, Nicolo, 85, pleaded guilty to tax evasion in Montreal and paid $209,000 in fines after $5.2-million in unclaimed income was found in Swiss bank accounts held in the name of others.

Similarly, in 2001, Vito Rizzuto settled a dispute over undeclared revenue from shares in a different firm that were in the name of others, including Mr. Campoli. He paid a $400,000 settlement.