Revenue-Quebec has filed 240 charges against Kitco Metals and its founder Bart Kitner, accusing the Canadian precious metals purchaser of tax fraud. In response, Kitco says it will file a claim for $122 million in damages.
Eleven other gold trading firms have also been charged. The Province is calling it “one of the biggest tax fraud investigations in provincial history.”
The tax agency is demanding $750 million in fines and prison sentences for several directors, including Kitco’s Kitner, Revenue-Quebec announced on Monday (in French only).
In total, the agency has filed 1,920 charges as part of an investigation that’s lasted several years. Kitco is accused of making false statements in tax returns and attempting to obtain rebates to which it is not entitled between March 2008 and August 2010.
“The evidence is significant,” Revenu-Québec spokesman Stéphane Dion told The Province, also noting that the total amount allegedly derailed by all companies in total is $350 million. Kitco could face $454.6 million in fines.
Kitco has also issued a statement, saying that it categorically rejects of all Revenue-Quebec’s allegations.
“Among Kitco’s lines of business is the purchase of scrap precious metals. Kitco pays the companies’ sales taxes on these purchases and receives tax credits for the corresponding amounts. It is then the companies’ responsibility to remit these taxes to the ARQ. Alleging that some of these companies have not paid back the taxes owed to it, the ARQ is unjustly holding Kitco responsible for these unremitted taxes.”
“In all respects, Kitco continues to vigorously contest all aspects of the ARQ’s actions,” the company wrote.
Kitner says the Agency’s “continuous pursuit in this case” has caused “substantial harm to Kitco’s ongoing operations and development.”
The firm says that the charges have left it with “no other choice” than to file for damages with the Quebec Superior Court totalling $122 million.
This is not the first time Kitco addresses Revenue-Quebec’s claims. When the investigation, dubbed Projet Carat, was first revealed in 2011, Kitco issued a statement denying all allegations, saying it had respected all laws since its founding in 1977.