CRA official in plot to frame Caledon mayor

Former CRA auditor Jeffrey Granger forged documents to frame the mayor of Caledon for tax evasion after she blocked a prominent developer’s housing project

By Marco Chown Oved Toronto Star 

A former tax official has admitted to using his insider knowledge to help Peel Region developers dodge hundreds of thousands of dollars in taxes, and when one of them asked him for help with a local mayor who was blocking his development plan, he attempted to frame her for tax evasion.

Jeffrey Granger, who was suspended from the Canada Revenue Agency in 2010 and subsequently fired, pled guilty last month to breach of trust by a public officer, accepting a secret commission/bribery and fraud over $5,000. He is scheduled to be sentenced Jan. 29.

In a 20-page agreed statement of facts, Granger admits to accepting $1.1 million in secret commissions, defrauding the government of more than $569,000 and failing to pass on more than $61,000 in GST he collected.

In the document, Granger described how he ran a side business helping his wealthy clients stymie tax audits and then attempted to frame Caledon Mayor Marolyn Morrison in a fake kickback scheme.

“This is pretty serious when you have someone inside Canada Revenue that changes your documentation to try and make it look like you’ve done illegal things,” said Morrison. “And when you’re in the public eye and they’ve done that to you, that’s horrendous.”

The OPP conducted a seven-month investigation into the mayor’s finances before declaring the allegations against her unfounded..

“I’ve had one speeding ticket in my whole life. I’m boring,” Morrison said. “I said to (police) when they cleared me: ‘You need to be blooming well looking at who’s doing this to me and why.’”

It took more than two years, but investigators were able to follow the trail back to Granger.

No one else has been charged in relation to the schemes. OPP spokesperson Sgt. Pierre Chamberland confirmed that the investigation is now closed and that “appropriate charges were laid.”

The attempt to make it appear that Mayor Morrison cheated on her taxes followed a Caledon town council decision to freeze development on a 740-hectare tract of land owned by developer Benedetto (Benny) Marotta in early 2008.

Marotta planned to build a large residential development to house 21,000 people adjacent to Bolton. But because the town had already reached its provincially mandated population growth target of 26,500 people, all further development in the area was frozen.

As a result, Caledon town council told Marotta that it wouldn’t even consider reviewing his development plans until 2021.

Marotta was furious.

“I was told by some developers not to touch Caledon and do any business in Caledon, because you go there with good intentions and make good investments, and the problem they have over there … they don’t like no one to succeed properly,” he told the Star in 2008. “You go with good health and you come out with broken legs … I don’t mean physically but business wise.”

Marotta threatened to launch a $500 million lawsuit against the town to recoup his $50 million in investments and lost future earnings. He even launched his own newspaper, Caledon Perspectives, to push his growth agenda.

According to the agreed statement of facts submitted at Granger’s trial, Marotta asked his accountant Edward Favot to investigate rumours that Morrison was corrupt and accepting bribes from developers.

Favot introduced Marotta to Granger, a CRA employee who used his computer access to initiate an audit into Morrison while disguising his trail by making it appear that the investigation was ordered by someone else, the document says.

Marotta then contacted Toronto Police officer Sam LoStracco, who was a personal friend and arranged a meeting with Granger.

Granger told LoStracco about two cheques Morrison had allegedly received from developers in Caledon and didn’t report to the CRA.

LoStracco passed the information along to the OPP, which launched an investigation into the accusation of corruption and later found them to be baseless.

“None of the allegations can be substantiated at this time. The information provided appears to be inaccurate,” wrote Det. Insp. Mark Pritchard when he closed off his investigation. “The source information is either completely false, or inaccurate to the point of being impossible to verify.”

Both before and after the forged documents were given to police, Marotta wrote Granger’s companies nine cheques for a total of $524,583.44

In an email from his lawyer, Marotta says he did not pay Granger to research Morrison’s taxes and that the payments were for consulting services Granger had been contracted to do by Favot, “a trusted financial adviser and accountant of Mr. Marotta for over 25 years.”

Marotta had told Granger about rumours of Morrison’s corruption and “assumed that if Granger looked into the matter and identified any information he would do so in a manner consistent with his duties as a CRA official,” wrote his lawyer, Jay Naster.

When Granger produced a USB key with apparent evidence that Mayor Morrison had accepted two undeclared payments from developers, Marotta immediately turned it over to police.

“Marotta has consistently co-operated with law enforcement,” Naster wrote. “Marotta relied on Granger’s position as a CRA investigator to believe that the information Granger provided would be accurate. Marotta made it clear to Granger that he would be turning over all information he received to law enforcement immediately. It was up to the police to verify the accuracy of the information provided.”

Favot’s lawyer, James McDonald, wrote in a letter to the Star that the allegations in the agreed statement of facts are “not true or accurate.”

Favot “at all times believed that Mr. Granger was running a legal tax consulting business and, as such, he retained Mr. Granger to provide legitimate tax services to his clients,” McDonald wrote.

Having won re-election in the meantime, Morrison says she is “happy” Granger has been brought to justice.

In another bizarre incident, Morrison’s husband, John, was attacked in front of their home in June 2008.

Morrison says her husband was threatened by an unknown man, who demanded the mayor change her vote on their development. Ten days later, Morrison says her husband was “smashed” in the face, leaving him with a black eye.

No one was ever arrested for the assault and there is no evidence to link it to Marotta, Granger or Favot.