Tobacco executive who devised ways to bypass excise taxes and supply black market cigarette dealers says the penalty paid by Imperial was a tiny fraction of its profits from breaking the law for years
Jump to full article: Montreal Gazette (ca), 2008-09-06
Intro: A former executive with the holding company that once owned Imperial Tobacco says the agreement reached in July to settle federal and provincial claims on smuggling was little more than "chump change" compared with what the company earned during the smuggling era in the late 1980s and early 1990s.
Paul Finlayson, who for 16 years was an executive at Imasco, which once owned Imperial, said the government basically caved in to tobacco interests when it made what he claimed was a token settlement with Imperial and Rothmans Inc.
Finlayson said Imperial earned $600 million to $700 million a year during the smuggling era when the company "lubricated" a system that defrauded Canadian governments of billions of dollars in unpaid taxes. . . .
Now retired, he said in an interview that the $600-million settlement with Imperial represented a small fraction of the profits Imperial earned during that period and an even smaller fraction of the taxes and duties governments lost to smuggling.
The Canada Revenue Agency refused to comment on Finlayson's statements. . . .
Finlayson, who managed operational systems at Imasco, said he prepared the operational plans for sending Imperial cigarettes tax-free into the United States, where they were later sold to smugglers who brought them back into Canada through the Akwesasne Six Nations reserve near Cornwall, Ont. . . .
"The RCMP knows all about this. They could have walked in and just handcuffed everybody at Imperial," he said, adding that the government did "not have the guts of a field mouse to go after the executives of the company." He admitted that this group could have included him.
He said he was speaking out because he believes Imperial crossed the line. "The envelope was being pushed a little bit beyond what I could tolerate it being pushed." He said he left Imasco during this period.
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Quotes from this article:
The RCMP knows all about this. They could have walked in and just handcuffed everybody at Imperial . . . . [The Canadian government didn't] have the guts of a field mouse to go after the executives. . . .
[T]hey had Imperial cold, on the ground screaming. (But) they reached down and gave it a hand and pulled them up and said, 'Ah, give us 50 million bucks and we'll forgive and forget.'
Paul Finlayson, who for 16 years was an executive at Imasco, which once owned Imperial Tobacco Canada. Finlayson said he developed the company's 1994 smuggling/tax evasion model.
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