but abroad. [secret source] He has some friends here. And what does that mean? You're afraid?
[secret source] I don't know, he might ask them to do something stupid. They know where I live. [Bob] When we come back... There is obviously serious money involved in this fraud, and there have been some very dangerous people over the years. You're the sitting duck in a huge global-organized crime. [Bob] The Canada Revenue Agency collects your taxes and makes sure that refunds go where they're supposed to. But in 2019, they believed they'd made an enormous mistake, paying out a bogus $63 million to fraudsters. So, where did all that money go? The CRA alleges that millions ended up outside Canada. Our investigation reveals an international network of individuals involved in the Canadian carousel scheme. People connected to Pakistan, the United Arab Emirates, Germany, Denmark and England. You need to ask your politicians now to understand this is a very, very serious attack on the Canadian revenue. [Bob] Which is why we're meeting with Mike Cheetham. He's helped to expose carousel fraud schemes in Europe for more than a decade. And he says we shouldn't be too quick to judge Samer Bishay and Iristel. The criminals have attacked the Canadian tax system. It appears that his company has been caught in the middle of this, surrounded by stooge companies. [Bob] In the early 2000s, Cheetham says he was inadvertently caught up in a carousel scheme himself. He'd been targeted and used by fraudsters to help cheat the United Kingdom's tax department. It's an absolute replica of the models that we've seen in Europe. [Bob] Cheetham now spends much of his time warning others and says Canada needs to get these cases out of tax court and pursue them criminally. Why are you here in the United Kingdom, trying to trace these criminals down? And to my knowledge, the CRA has done nothing, absolutely nothing to go after these people. There are extradition treaties. Why are they not tracing them? Here in Europe, we have proceeds of crime. They can seize everything these people have. [GPS automated voice speaks in French] [Bob] So if the CRA isn't looking for them, we thought we would. We got information that another participant in the Canadian carousel is a man named Habib Khan, now living in Germany. Khan allegedly helped to set up the operation in Canada, recruiting and directing the so-called stooges, registering companies in Ontario and BC. And he was the one reported to have come to Canada to threaten Danish Habib with guns after money went missing. We located Habib Khan in a quiet neighborhood in Stuttgart, where his name's on the mailbox. [door buzzes] -[Harvey] Hello? -[Khan] Hello. -[Harvey] Habib Khan? -Yeah? [Bob] We told him we wanted to talk about the companies that he'd set up in Canada. I have nothing to say to you, I'm sorry. [Harvey] Can you tell us where the money went, sir? Where the money went? Millions went missing. Which millions? [Harvey] From the-- from the Canadian government. [Bob] Habib Khan later denied any involvement in a carousel scheme and said he had never threatened anyone. Back in the United Kingdom, in the town of Hayes outside London, we've located another man reported to be instrumental in recruiting and instructing many of the so-called stooges in Canada. His name is Amir Agha Zahoor. Court documents show that his company received millions from Canadian stooges, with another $50,000 deposited to his personal account. On social media, Zahoor appears to lead a normal suburban life, working out at his local gym, playing cricket. The CRA noted Zahoor used to live in this townhome in Hayes with a roommate, who was convicted in a carousel fraud scheme and sentenced to prison in the UK. We went to Zahoor's current address. Hi there. Is Mr. Zahoor here? -[woman] Yes, he is. -[Bob] Can I speak to him? -[woman] Yes. -[Bob] Thanks. [Bob] It turns out all we had to do was knock on the door. As you know, your name has been mentioned in connection with a large fraud in Canada. The Canada Revenue Agency says you've received payments, illicit payments because of it, and we'd like to get your side of the story. I can't give you any-- any comments. [Bob] Why not? You have to speak with my lawyer. I'm just an Uber driver here. -You're an Uber driver. -Yeah, yeah, yeah, yeah. We've actually heard that denial before that people aren't who... they actually are, that they don't live where they really live and that they're not involved in this. I am not going to say anything right now. If anything goes against me right now, it's better that you should, you know, uh, contact with my solicitor. It's-- it's going to be easy for all of us. [Bob] Uber driver or not, Zahoor referred us to his criminal lawyer who claimed they weren't aware of any investigations in Canada, and would have nothing to say. I think you probably only uncovered the tip of the iceberg. I believe that the fault here is with the tax authority. There will always be criminals, they will always attack the low-hanging fruit. And your tax system is wide open for this fraud. [video narrator] How do the criminals do it? They set up shady companies... [Bob] In fact, in Europe, they've been campaigning to stamp out carousel tax fraud for years. [video narrator] It's called VAT carousel fraud. The same goods go round and round... [Bob] This video was produced by the European Union. [video narrator] Are you mad by now? You should be. [Bob] The EU wasn't only warning the public about this kind of crime, it was warning the criminals. [video narrator] The rules of the game need to change, and that's what the European Union is doing. [banging on door] [reporter] The surveillance team tracked all the suspects to the meeting. [news anchor] Spanish police proceeded to arrest her with the intention of extraditing her as soon as possible. [reporter] The nine-month trial found six of the seven guilty as charged, who all received at least five years in prison. [speaking French] [Bob] In Europe, there've been numerous arrests and convictions. But throughout the EU, criminal investigations are not the only priority. So too is prevention. A growing list of industries prone to carousel fraud are exempted from collecting sales tax to prevent bogus refund claims. And unlike in Canada, European companies are required to know far more about their suppliers and customers, says Mike Cheetham. I think by European standards, when you look at the Iristel case, it would be a problem. There would be red flags all over the place. You are expected to visit your customers and suppliers to check them out. The law requires it. There's been some jail time for some of the higher levels in-- in-- in this structure. So, they've moved to safer areas. They found places where-- where they are not yet being investigated and hounded by the authorities. And that would be Canada. [Frédéric] So, we're now an easy target. Yes. Yes. You're the sitting duck. In-- in huge global organized crime you're the target. [Bob] We requested interviews with the Commissioner of the Canada Revenue Agency, Bob Hamilton, and with Canada's Minister of Revenue, Marie-Claude Bibeau. Both declined. In a statement the CRA told us they've made significant investments in detecting carousel schemes. And that they aim to prevent and address them as early as possible. Mike Cheetham says it's already too late. How many heart operations, how many cancer treatments does this-- Coming from a medical background as I do, I feel livid that this is happening in Canada. I'm sure the fraud is still going on as we're speaking now. [Bob] When we come back... [Harvey] He's saying there that they have direct evidence to tie Iristel to the scheme. Perfect. Where's the evidence? [Bob] Samer Bishay has had a turbulent ride over the past four years, fighting allegations he's been involved in a carousel scheme that deprived the Canadian treasury of $63 million. In tax court and in federal court, the Canada Revenue Agency has documented its case against Bishay and his telecom company Iristel. The CRA says, Iris has not been behaving like a company in financial peril. According to them, Iris leased a fleet of luxury cars... including two Jaguars, a McLaren, two BMWs and a Porsche. Also, they say Bishay himself got $2 million in a shareholder loan repayment, and he bought a $7 million executive jet. These are leases on vehicles, and you're talking about a couple of thousand bucks. I've had sports cars and-- Since 1999. And the jet that they talk about for $7 million, that's a jet that goes on a private jet charter operation that generates 40% return. You siphoned off, and that's their phrase, siphoned off $4 million to your Romanian affiliate. Iristel Romania is one of our companies that's been there since 2001. They run our call center. That's what's infuriating about this whole process is how could the DOJ not get their facts right, you know? And-- and just accuse. [Bob] But the CRA says it's Bishay who has his facts wrong, and that he provided "no supporting invoices" to explain those payments to the bank account in Romania. They also reported that in 2019, Iristel's Vice President of Sales, Nick Petridis, was paid $1.8 million, some in commissions for sales the CRA alleges never really happened. 1.8 million is Iristel's commission to me. But that's all my commissions, yeah. That was my-- that was my best year ever. Every minute that came in we made margin on. It's a fraction of the money made, for sure. But that's what I do. I make a fraction of what I bring in. [Bob] Tax court documents also state that an accountant connected to three of the Canadian stooge companies offered to make a deal. If his clients were given concessions they would co-operate and provide direct evidence of Iristel's involvement. The documents don't say what that concrete evidence might be. [Harvey] So, he's saying there that they have direct evidence to tie Iristel to the scheme. Perfect. Where's the evidence? What evidence are they going to provide? I think they're full of it. [Bob] The court documents show the CRA had serious questions about Iristel's relationship with this man, the convicted fraudster Louis Arriola. The CRA alleges that Iristel paid kickbacks of $275,000 to Arriola's company, LDI, as well as to another US customer for participating in the carousel scheme. The CRA alleges the payments were omitted from Iristel's general ledger "with the intention of hiding the kickback." Samer Bishay claims there is a benign explanation. They were loan repayments. They are not able to read what are financial statements, they were not kickbacks. They were simply payments that had nothing to do with HST. [Bob] And according to this email, Arriola also had in-depth knowledge of Iristel's suppliers, and helped process their payments. The court file shows CRA auditors wondered about what happened next. Iristel and Louis Arriola moved away from traditional banking and onto a cryptocurrency-based payment platform. Hi, I'm your guide to using TeleEscrow. [Bob] TeleEscrow and Amerix Coin were promoted as a tool for telecom companies to quickly settle accounts. Free yourself from the banks and start using the most valuable coin on earth, Amerix. [Bob] And it turns out Louis Arriola was the man behind both. The criminals, unfortunately, use payment platforms. This is to mask the transactions because banks have a responsibility, even in Canada, to report suspicious transactions for money laundering. But in Canada, it's a-- it's a new thing. People are not aware of these payment platforms and how they operate. [Bob] According to the CRA, Iristel directed its suppliers to use Arriola's payment platform, TeleEscrow. And the CRA alleges the purpose of TeleEscrow was to make it look as if money were moving between Iristel, its suppliers and its customers. But in our interview, Bishay claimed he had no idea that Arriola was behind the payment platform. [Bob] Was Lou Arriola part of the connection to TeleEscrow? He was definitely recommended the platform, but I was not made aware of any ownership status or anything like that. [Bob] And soon, Louis Arriola and TeleEscrow were in big trouble in the US for alleged wrongdoing in numerous other cases. A bankruptcy receiver said TeleEscrow was "designed to defraud," part of a criminal enterprise with no real business activity. And that Louis Arriola and others at TeleEscrow conspired to fabricate a pretend business to perpetuate a massive fraud against lenders. Arriola has not responded to our repeated attempts to reach him. So, you've-- you've got a company that appears to be... essentially in business for fraud. And then you've got the recommendation of who-- of Lou Arriola, a convicted fraudster. I didn't know who Louis Arriola is partners with or who he's dealing with or who he's sleeping with. That's none of my business. And it's very unfair to come four years into it and say, "Well, you should have known this, and I should have known that." Should have known what? [Bob] Yet in our first interview, Samer Bishay claimed he hired a major accounting firm to look into TeleEscrow before signing up. Uh, we have a full report from Deloitte at the time that we said, "Is there anything wrong about using this platform, about this technology in general?" Not at all. [Bob] In fact, under oath, Iristel's CFO admitted to the CRA that Deloitte had not been hired to determine the legitimacy of TeleEscrow. Emails show Deloitte asked for a meeting with TeleEscrow, but Iristel turned it down. They are accusing you of... managing a massive fraud against the Canadian treasury and therefore the Canadian people. If they were really right about that, why am I not in handcuffs? [Bob] A civil court judge may one day rule on the CRA's allegations that Iristel played a central role in the carousel scheme. So far, all allegations remain untested in court. But for Canadians the real question might be, "Where did your tax dollars go?" We traced the invoices we obtained to Pakistan and to a company in Islamabad called Samaviya. Which, according to a CRA audit, in 2019 alone was sent $42 million from a carousel scheme in Canada. [Bob] Minister Bibeau. Hello, I'm Bob McKeown. [Bob] We thought we would try one more time to speak to the Minister of Revenue about carousel schemes in general. After all, it's your money, your tax dollars being stolen. [Bob] We are doing an investigation on carousel tax frauds... and I'd like to ask you a question if I could. Um, I would answer your question, but I'd prefer to get a little briefing before. [Bob] Bibeau was appointed Revenue Minister this past summer. Though it seems the CRA had not yet got around to briefing her. [Bob] Carousel tax frauds. How big an issue are they for the CRA and as minister for you? Okay, seriously, Simon will just, uh, stay in contact with you and I'll get back to you, okay? But I-- I-- I need to, uh, look at it. [Bob] We-- we've had some difficulty getting a yes to our interview request. I say yes, okay, I say yes, we'll do it, but let me get ready for that. [Bob] That's very kind of you. Thanks. Okay? Thank you. [Bob] But Minister Bibeau promptly changed her mind. Though the CRA has identified at least $1.1 billion related to carousel schemes in Canada, the minister decided she wouldn't be discussing them with us after all. Instead, she sent this statement. [Bo] The money has left your country, the-- the money has left my country, and you can't imagine where. You have to face the reality that you've been stolen of money that you're never going to see. The-- the money's gone. [no audio] 
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