A Tale of Two Thugs :CRA SOTW
Alan Baggett
Taxman follows on heels of thugs
Abbotsford entrepreneur whose businesses torched gets $850,000 tax
bill
Don Cayo, Vancouver Sun - Published: Friday, December 07, 2007
First it was criminals -- some of the most brutal thugs in B.C. -- who
assailed Abbotsford businessman Paul Esposito and all he holds dear.
They burned three of his businesses, two of them to the ground, and
they terrorized him and his family to the point where, three years
later with some of the perpetrators finally in jail, he still speaks
of many aspects of these incidents and these people only guardedly and
indirectly.
And now it's the pencil pushers at Canada Revenue Agency who are
putting the boots to his family's dwindling capital and what's left of
their hopes and dreams.
The first story -- the arsons -- is well known in B.C., though so out-
of-character for how most of us see our communities that it's hard to
believe.
Esposito and two sons were the prospering owners of a busy liquor
store, a popular pub and a hotel-banquet room-pub complex that had
become a hub for community events.
Esposito himself was a well-liked community booster, though his
businesses' connection to liquor didn't sit well with everyone in
Bible-thumping Abbotsford. But the kind of opposition he expected and
had learned to deal with was along the lines of objections to zoning
to accommodate his enterprises.
Then on Dec. 2, 2004, an arsonist struck his Abbotsford liquor store.
The damage was $21,000 -- substantial, yet low enough he decided to
swallow it himself rather than drive up his insurance rates by making
a claim.
Nine days later, his Wild Bill's Pub -- so newly renovated that he
hadn't had a chance to up the insurance coverage to match its
increased value -- was torched and burned to the ground. The loss was
$1 million-plus, but all he could collect was $600,000.
Next, it was Finnegan's Pub. It was destroyed by the fire, while the
adjacent hotel and banquet centre were badly damaged by smoke and
water.
For months, Esposito tells me, he felt like a suspect.
"People thought that, at the very least, I must have done something to
deserve this."
In time, however, as the police made headway with their massive
investigation, it became clear that all he'd done to bring this on was
to succeed. He was a victim of jealousy and hired thugs.
The last and nastiest of the people so far proven to be involved --
Steven Porsch, a violent 22-year-old with a record of kidnapping,
assault and gun-running in addition to organizing the arsons -- was
sentenced only last month. And he won't say who hired him.
All this time, Esposito has been unable to rebuild. His own common
sense, as well as advisers involved in the investigation, told him it
was pointless and dangerous until the perpetrators are dealt with.
Add it all up -- the shortfall in insurance money, the replacement
costs that are escalating at 15 per cent or so a year as construction
booms in the region, the lost income, dealing with the paperwork, and
on and on -- and Esposito reckons he is already $5.5 million out of
pocket.
And now the taxman's rubbing salt in the still-raw wound.
Normally when a businessman collects a fire insurance settlement, he
must either reinvest it within two years or pay tax on it.
Esposito has well-documented reasons why he can't: it's neither safe
nor sensible for him to do so yet. So he has formally applied for an
extension in order to keep his capital intact for the time when
reinvestment once again makes sense.
CRA, in its lackadaisical way that seems to drive pretty well everyone
who writes to me crazy, hasn't said No. In fact, it hasn't said
anything -- the request just sits in limbo while Esposito has his
calls bounced from one unhelpful bureaucrat to another.
Meanwhile -- and here the agency shows real urgency -- they're on his
case for $850,000 in "overdue" taxes on the insurance payouts. And the
stiff penalties are rising fast.
So let me try a new line of questions for the reticent minister of
revenue, Gordon O'Connor, if he ever deigns to discuss the practices
of the taxpayer-unfriendly CRA: Now that we see how your agency treats
honest citizens, Mr. Minister, a lot of readers have written to ask --
even before we published this story -- how much energy you guys devote
and what luck you're having nailing undeclared income for criminal
acts like stealing, dealing or setting fires?
© The Vancouver Sun 2007
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