Businessmen face charges over millions in tax evasion, fraud

Two Winnipeg businessmen face multiple charges over millions of dollars in alleged tax evasion and fraud connected to a company that tried to build a shopping loyalty rewards program.

Instead, it collapsed and left more than 300 investors out millions of dollars.

It really created a black stain on our memories of our dad, said Aleisha Reimer, whose late father, Ben, invested more than $28,000 in the company called One World United (OWU).

The alleged scheme was not uncovered until after Reimers father died.

According to a legal document that theCanada Revenue Agency used to obtain search warrants, 325 investors sank $5.2 million into OWU.

Broker Neil Friesen brought in most of that money, responsible for driving $2.8 million of the investment, the CRA alleges.

For sending OWU that business, company founder and president Jeff Dyck allegedly paid Friesen $692,922 in 2008 and 2009,according to theCRAs information.

OWU described itselfasa loyalty program that [offered] consumers discount prices and merchants an exclusive loyal member base.Members would receive a card that entitled them to discounts at select stores.

Court documents and emails revealed thatFriesen and Dyck told investors they could make 10 to25 per centannually in returns off OWU.

They also allegedly told investors, between 2007 and 2010, that they could writeoff part of their investment as a business expense.

As the CRA claimed in its document, this led to investors deducting $14.7 million in fictitious losses. It ruled those deductions as invalid and ordered investors to pay back the write-offs with interest.

After subtracting some royalties received on the initial investment, the Reimers claim they have lost almost $24,000. They also had to pay back $11,300 in tax deductions and interest to the CRA.

Its upsetting because it reminds me of how my dad was once a really smart person who got taken advantage of, said Aleisha Reimer.

Men face multiple charges

The CRA has charged Friesen and Dyck with fraud, tax evasion, and issuing invoices to investors with deceptive statements.

Dyck faces nine charges, including a criminal charge offraud over $5,000, four charges under the Income Tax Act,and four charges under the Excise Tax Act.

Friesen faces 12 charges, including a criminal charge of fraud over $5,000,plus seven charges under the Income Tax Act and four under the Excise Tax Act.He is also under investigation by the Manitoba Securities Commission.

His company, Neil Friesen & Associates, describes itself on its websiteas one of Winnipegs leading providers of alternative investment opportunities."

The CRA also alleged Dyck and Friesen lied on their own income taxes by understating their incomes. Dyck is accused of failing to file income taxes in 2009 and 2010.

If found guilty, the two men could face a long time in prison and/or steep fines.

The Criminal Code charge for fraud over $5,000 carries a maximum of 14 years in prison.

Each tax charge carries a fine of between 50 per centand 200 per centof the amount the accused tried to evade and/or a maximum two years in prison.

The CBC News I-Teamcontacted Friesen, Dyck and their lawyer, but no one replied tointerview requests.

None of the allegations have been proven in court.

Family suing 'alternative investment' broker

Aleisha Reimer described her father as a working class man who drove long-haul trucks for a living.

He liked white-water rafting and boating and having a beer on a boat with a fishing rod. I remember his laugh. Those are the types of things I want to remember, she said.

The family is suing Friesen over the investment, alleging thatFriesen got BenReimer to invest in One World United by way of misrepresentative [sic], undue influence, and coercion.

By the time Reimer met Friesen in 2008, he had lived with a lifetime of heart troubles and survived two strokes.

AleishaReimersaid after the strokes, her father had changed as a person.

He wasnt as sharp as before, wasnt as witty,and was more socially withdrawn.Hed lost some of his ability to read, she said.

The family said in itsstatement of claim that Friesen induced Ben Reimerat a time when he was a vulnerable person.

Ben Reimers final investment in One World United was $20,000 on July 21, 2009, just under two months before he died at the age of 62 on Sept. 11, 2009.

In his statement of defence, Friesen denies the allegations andsaid BenReimer voluntarily entered into "this One World United business venture."

Friesensaid Reimer showed up at his office and requested thatFriesen arrange the investment.

Friesen also said he wants the family to show proof that he misrepresented or coerced Reimer.

Aleisha Reimer said she has questions over how the $20,000 cheque for her father's last OWU investment was written.According to her, the signature is her fathers, but the rest of the handwriting on the cheque is not.

In an email reply toCBC News, Friesen wrote that about 40 per centof clients ask if I would please write out the cheque in the proper name etc.

Read the Reimer family's statement of claim and Friesen'sstatement of defence here:

Family metwith Friesen

After her father died, AleishaReimer said the family met with Friesen at his office on Regent Avenue to discuss the OWU investment.

The Neil Friesen file was the only thing in my dads portfolio that we didnt really understand," she said.

She said it was difficult to get straight answers from Friesen about the investments details. After repeatedly pressing him for information, Reimersaid her motherexploded.

My mom said, Just give me my money back! And, you know, she was a bit meaner than that, Aleisha Reimer said, adding thatFriesens tone quickly turned after that.

He said something along the lines of,If you had come in with Ben when we were trying to sort this outand I was explaining it to him then you would understand what this was and youd be on board,and its your own fault for discrediting this from the start, Reimer recounted.

Reimer said her father died not knowing his investment in OWU fell apart and that it was part of an alleged scheme.

My dad thought things through,and so my dad would have been so mad,and that made me so sad, she said.

Multiple search warrants obtained by CRA

Friesen and Dyck were scheduled for anappearance in court on Nov.18, 2013. Their next court appearance is scheduled on April 14, 2014.

The Canada Revenue Agency also obtained six search warrants for their investigation into Friesen, Dyck and One World United.

They include warrants to search Friesen's and Dycks business records and the personal banking information of Friesen and hiswife Agatha,as well as the banking information ofDyck and hiswife Charissa.

As well, the courtgave officers the right to search their homes and personal computers.

According to the information used to obtain the search warrants, one CRA auditor said he believed money from One World United was not going to a shopping loyalty program, but rather it was the belief of the auditor that Jeff Dyck was using proceeds from OWU to attempt to create a wrestling entertainment company.