Tony Del Torchio, a financial adviser in Toronto, helped facilitate the creation of hundreds of shell companies, trusts and other investment vehicles, all of which were used to shelter money from Canadian and U.S. tax authorities. He received close to $1 million in fees and commissions for his services.
Ontario Court of Appeal Judge Stephen Binnie wrote in the March 4 decision that his lawyers initially tried to justify him to authorities by claiming it was necessary for him to create the investment vehicles to protect clients from risk or to avoid red tape.
They said they were providing “one of the last certainties available to domestic-based investors and did so in the most efficient way possible,” Mr. Binnie wrote.
But they rejected these arguments, which were later made by the U.S. Justice Department, and “even in its own affidavit, admitted that Mr. Del Torchio had never sought to help his clients avoid Canadian taxes. He even admitted to running the schemes because he wanted to keep the business going,” the judge wrote.
He rejected Mr. Del Torchio’s lawyer’s claim that the government should have limited itself to prosecuting certain clients who were suspected of fraudulent activity, because the typical scenario involved the creation of dummy corporations to hide capital gains, like a house sale, from tax authorities. Instead, he argued that the Canadian government should have made his case a priority when authorities first began investigating him in 2010. “Mr. Del Torchio’s clients relied on him to provide the service that he did, a service which he provided, if rightly so, in circumstances which Mr. Del Torchio knew complied with the law and was entirely appropriate,” he wrote.
Mr. Del Torchio’s account of the controversy is outlined in his 2013 speech to the Canadian Bar Association.