Kelowna Woman Given House Arrest For Her Part in $191 Million Fraud Scam

One of the two women found guilty of filing false income tax returns worth more than $191 million has been handed her sentence.

Deanna Lynn LaValley appeared in a Kelowna courtroom on Tuesday to receive her sentence for her part in filing the false returns between 2010 and 2012. LaValley and her business partner Donna Marie Stancer were charged and found guilty of the crimes in July, which took place at a Vernon tax firm called DeMara Consulting Inc.

Crown counsellor Jessica Patterson was seeking a sentence of two years from Justice Allison Beames, while defence lawyer Grant Grey was asking the court for a sentence of 12 to 18 months. The two women were involved in an illegal scheme known as tax reorganization, nicknamed The Remedy.

During her submissions, Patterson detailed how the pair claimed more than $191 million in false expenses and defrauded the government $9.9 million in refunds. During the time the scam was undertaken, a total of 363 income tax returns were filed for 224 clients. As a result of the illegal scheme, clients were fined by the Canada Revenue Agency (CRA) as much as $2.5 million and as little as $778 as 206 clients were penalized.

Of those clients who had services performed at the tax firm, Patterson noted that 84 of them had previous difficulty with the CRA. While it was implied that several people were already fined and had complications with the CRA for previous dealings, not all clients were looking for a scheme. In total 55 people had to declare bankruptcy because of The Remedy and of those, 17 had not had previous problems with the CRA.

Patterson said the crimes LaValley was guilty of extended far beyond just those involved in the scam, but the government, public, and economy as a whole.

Defence lawyer Grey said the entire ordeal had been very difficult on his client as she found it to be stressful and frightening. Grey said the 54-year-old only played a minor role in the fraud and described her as a secretary or assistant in the office in Vernon. Referring to her as someone who “ran the office” he called his client a partner rather than a principle and asked Justice Beames to sentence his client to 12 to 18 months, to be served in the community. Asking for house arrest rather than jail time, Grey said LaValley had remorse for her actions and that she felt “stupid enough to get involved in this whole issue.”

Before Justice Beames sentenced LaValley she was asked if she would like to make a statement, and she did.

“I’m really sorry that it has come to all of this and for everyone involved,” said a tearful LaValley.

Beames took LaValley’s remorse into consideration before handing down her sentence. She also considered the role LaValley actually played in the scam and concluded that she was indeed a partner, and not the principle.

“Ms. LaValley was not the leader of the fraudulent scheme but she clearly had a significant role, she was a significant link in the chain and she was an integrated part in the overall scheme,” said Beame during her sentence.

LaValley was facing sentencing for two charges as one charge of giving a false statement was stayed. For the charge of falsely or deceptively obtaining or claiming a refund she was sentenced to six months. For the charge of fraud over $5,000 she was handed a 16 month sentence.

The sentences are to be served consecutively for a total of 22 months. Justice Beames decided to grant the conditional sentence which means LaValley will serve her sentence under house arrest in the community. She is not allowed to leave Kelowna, she can only travel to and from work, and go to appointments and do shopping during certain times. She was also ordered to pay a fine worth $17,439 which must be paid in full in five years.

LaValley looked stunned as she walked out of the Kelowna courtroom, with tears rolling down her face. Before she was dismissed, Beames told her she was lucky to be serving her sentence in the community, rather than in a jail cell considering the size and sophistication of the scam.

Stancer is expected to be handed her sentence for the fraud on December 15^th in Kelowna.