Trial underway for N.S. women accused in $3.6M fraud case

A Cape Breton family accused in a multi-million dollar tax scheme isworking their way through a complex criminal trial with no lawyers at their side.

A Nova Scotia Supreme Court justice will decide the fate of four women best known for operating a now defunct restaurant on Boularderie Island in Cape Breton known as Spaghetti Benders.

The judge-alonetrial got underway June 17in Nova Scotia Supreme Court in Sydney, N.S.

LydiaSakerand her daughters Georgette Young, NadiaSakerand AngelaMacDonaldhave pleaded notguiltyto 30 charges including fraud.

The womenwere charged after a nearly three-year investigation by the Canada Revenue Agency.

According to allegations outlined in search warrant records, the women and 10 companies under their control claimed $56 million dollars in sales on products such as cookbooks, salad dressings, frozen dinners and fur coats.

The defendants are accused of a $3.6-million tax fraud related to GST and HST refunds that the agencyalleges was a scheme that escalated in size between January 2011 and July 2015.

The companies were paid refunds totalling $276,000, according to court records, and were denied $3 million after CRAauditors became suspicious.

Prosecutors have said eight bankers boxes worth of documents containing information aboutthe companies were collected as part of the case.

Objections raised

During a pre-trial hearing, Justice Robin Gogan underscored the importance and value of obtaining somelegal advice.

Young andSaker told the judge they were given some advice early on, but did not retain counsel.

All of the women are representing themselves in what isscheduled to be a five-week trial.

The women were sent copies of a criminal law handbook, and Goganpointedout specific sections to help them on matters such as cross-examinations.

Young, who is facing at least 30 charges the most of all the women has raised multiple objections throughout the trial.

In particular, she asked the judge to consider whether invoices submitted by the Crown were hearsay because the auditor who collected them hadn't yet testified.

"The time to make an objection is at the moment that you may see the document," saidGogan. "This is described in the information I sent to you."

Young also said she was concerned about whether the Crown's documents, such as invoices and other bills, were authentic.

"This is hearsay, given to hearsay, told hearsay," said Young. "These papers were supposedly given to somebody else. This person who gave this piece of paper is not here to talk about this."

Gogan said she would accept the exhibitsconditionally, until such a time when the Crown introduces evidence from its auditing witness who could speak to where the documents came from.

Goganalso overruled all of Young's objections

The Crown has called a number of witnesses from Nova Scotia's business community in an attempt to prove the women made upsales in order to receive a higher tax return.

Ron Marks, who owns G. AbatoandSons Italian Market on Young Street in Halifax along with his wife,testified he did not recognize invoices from the accused for $287,000 worth of balsamic vinegar, $143,000 worth of olive oil and $71,000 worth of cheese wheels.

An invoice listinghis company as "Italian Market"also showed $500,000 in sales for 50 pallets of a product that was illegible.

"The only time I've seen it is when you, the Crown, has showed it to me," Marks testified."I've never purchased 50 pallets of anything in my life."

When asked if she wished tocross-examineMarks, Young offered only a compliment.

"I've been to your store and it's an absolute delight," shesaid. "We're so glad that you joined us today."

Johanna Gallipeau of Sweet Pea Boutique in Halifax told the courtshenever purchased any products from the accused.

Gallipeausaid shehad no knowledge of invoices made out to her company, including one for the purchase of $7,800 worth of cookbooks from a business known as Juliette andJohn.

Lauchie MacLean, president of Glenora Distillers in Mabou, N.S., said he did do some business with Juliette andJohn for some sauce products to be sold at his company's gift shop.But MacLeandenied hisbusiness ever placed an order totalling $1,800.

Brenda Legge, a senior staff member ofSalty's Restaurant in Halifax, said her company did purchase balsamic vinegar, but would never spend $32,000 on the product.

The business is listed as the purchaseron an invoice made byKishk Inc., operated by Youngand listed to a Widad Lane in Sydney, N.S.

Gogan is now considering an application made by the defendants that questionsthe searchesof their homes.

The women claim they were never shown search warrants or described what was happening.

MacDonald testified that during the search of her home in Kentville, N.S., a person believed to be a policeofficer reached for a gun aftershetripped and lost her balance.

MacDonald said investigators followed herupstairstothe bathroom.

Young testified she was hit in the face by a door after trying to keep CRA investigators from entering her home in North Sydney, N.S. The court also heard that as the teammade their way inside,Young peed her pants.

At least onewoman claimed investigators placedlistening devices thatresembleda stethoscope up toher wall, while two of the defendantsclaimedinvestigators combed through flour and sugar, along with items belonging to their children.

Jennifer Jones, a senior CRA investigator, was asked if there were any tense moments or commotion while searching MacDonald's home in Kentville.

She and other CRA investigators told the court they did not recall any moments where someone may havereached for a gun.

"No, I don't recall anything out of the ordinary," Jones said.

The parties will be back in court on Mondayfor arguments about the searches. The trial itself willcontinue into July.