Richmond company fined $100K for tax evasion software

Nelson Bennett

A company owned by well-known Richmond businessman Pius Chan has been fined $100,000 for fraud related to “zapping” software the company made and sold to help businesses to avoid paying taxes.

InfoSpec Systems Inc., which is owned by Pius and Cindy Chan, received the fine after being convicted last month on one count of fraud.

In 2008, the Canada Revenue Agency launched an investigation into InfoSpec after several restaurants were found to be evading sales taxes by using a system designed and sold by InfoSpec.

Chan has served as a director on the Richmond Chamber of Commerce.

InfoSpec makes point of sale software under the name Profitek.  According to the CRA, the Profitek system was used to erase sales receipts, allowing businesses to avoid paying sales taxes.

Several B.C. businesses – including sushi restaurants in Vancouver and North Vancouver – were convicted of tax evasion for using the system, but it took four years to get a conviction for the company that made and sold them the software.

On June 22, 2012, a BC Supreme Court judge found InfoSpec guilty on one count of fraud over $5,000. That followed an earlier conviction of one of InfoSpec’s employees, David Au, who was convicted of fraud over $5,000 in 2010 and sentenced to two and a half years in jail.

A factor in that sentence was that Au continued to sell the Profitek equipment, even while under investigation.

“It is particularly aggravating that Mr. Au continued to sell the zapper to customers after he became aware of the CRA investigation of InfoSpec and attempted to assist his customers to evade detection during the CRA’s audits,” Justice Catherine Bruce said in her sentencing.

“As a consequence, Mr. Au’s actions are highly blameworthy and attract a sentence that both denounces his misconduct and acts as a general and specific deterrent for him and like-minded others.”