Payroll business owner failed to pay CRA the money her clients owed
When her payroll business ran into trouble paying money her clients owed the Canada Revenue Agency, Christine Evans used funds from other clients to cover those shortfalls, expecting things would correct themselves later.
The end result was thousands of dollars from three clients that were not submitted to the CRA, and fraud, breach of trust and theft over $5,000 charges being laid against Evans. That led to Evans selling her home and a recreational vehicle to help pay back the money she owed the three businesses.
In Sudbury court, Evans pleaded guilty to two counts of fraud over $5,000 and one count of theft under $5,000.
Evans, 55, having no prior record, received a suspended sentence and a one-year probation order that includes a condition she takes assessment, counselling and programs as directed.
“I realize taking from one hand to the other is not the way to do it,” Evans told Ontario Court Justice John Keast.
“You are a modern-day Robin Hood,” Keast told Evans. “It’s not like you had ulterior motives to take people’s money for your own personal use. That’s not what happened here. You took money from a client in one case to cover up (a shortfall) and it got bigger and bigger and you couldn’t control the snowball. It’s a very sad situation.
“But, you did not have criminal intent to take other people’s money … You simply made a business decision to make up for a shortfall with proceeds from other areas … This is just a monumental error in judgment.”
The Crown and defence lawyer Edmond Paquette suggested the penalties.
The court heard Evans’ company, Northern Payroll Services, was contracted to manage the Northern RV payroll. Her duties included submitting money Northern RV owed to the CRA. But in early 2018, that did not happen. She failed to pay $12,000 that Northern RV owed, resulting in a CRA penalty of $2,000 and interest of $599. The total loss to Northern RV was $14,935.
Evans’ business was also contracted to do payroll work by Costello Associates. On three occasions in early 2018, Northern Payroll Services did not make required payments to the CRA, resulting in a loss to Costello Associates of $38,968.
When the fraud was uncovered, Evans did make $25,000 in payments to the business, but Costello Associates was still out about $14,000.
Sheri Tomchick, meanwhile, was running several seniors care businesses and hired Northern Payroll Services. In February 2018, Tomchick became aware of CRA problems with her businesses and had to take out a loan to deal with the situation. About $40,000 was owed.
Evans did repay Tomchick $11,500 in the spring of 2018, leaving $27,633 outstanding.
Paquette told the court that Evans has since repaid all of money that was owed to the three businesses.
“Full restitution has been paid,” he said.
Paquette said Northern RV took Evans to small claims court and won a judgment ordering Evans to pay $25,000.
“She sold her home in order to get financing and repay the debt, all debts,” he said. “What she did was use other people’s money to pay for other people’s problems and it snowballed.”
As well, Tomchick filed a lawsuit against Evans to recover her lost money and the Superior Court case has been resolved, said Paquette.
As for Costello Associates, Paquette said the business did not take legal action, but Evans did make full restitution.
Paquette said Evans was simply trying to keep up required CRA payments by “taking from one to pay for the other. She did not take money for her personal gain, did not go on any trips. It simply snowballed into something greater than she could handle …
“She knew better. She knows better. She did make things right and she had started to make restitutional payments even before she was charged.”
Assistant Crown attorney Anna Spieser said what Evans did amounted to an abuse of a position of trust.
“But, she has taken significant steps to repair the harm she has done,” said Spieser.