Forty boxes of evidence

Dave Bartlett
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Defence looking for Crown to turn over documents in tax case

A St. John's man caught in a dispute between the Canada Revenue Agency (CRA) and Eastern Health made his first court appearance Wednesday to face four tax-related charges.

Last month Gary Hennessey told his story to The Telegram.

He was forced to close his payroll business in August 2007, he said, and later declared bankruptcy because of the dispute, which eventually led to the charges.

Gary Hennessey (right) speaks with his lawyer Robert Anstey outside provincial court Wednesday morning. - Photo by Dave Bartlett/The Telegram

A St. John's man caught in a dispute between the Canada Revenue Agency (CRA) and Eastern Health made his first court appearance Wednesday to face four tax-related charges.

Last month Gary Hennessey told his story to The Telegram.

He was forced to close his payroll business in August 2007, he said, and later declared bankruptcy because of the dispute, which eventually led to the charges.

Hennessey was formally charged in provincial court Wednesday with tax evasion, fraud over $5,000 and two counts of making false statements on his tax returns.

In court, Hennessey's lawyer, Robert Anstey, asked Crown prosecutor Neil Smith to return 40 banker's boxes of records the CRA seized from Hennessey about 18 months ago.

Anstey is also looking for records from CRA and from Eastern Health.

Smith said a full package of evidence is being prepared for Anstey.

Considering the amount of material Anstey has to review to mount a defence, he asked Judge Lois Skanes to put the matter off until September.

But Skanes suggested a court date be set for June 15, to update the court on Anstey's progress.

She said that would give the Crown time to turn over the documents Anstey has requested and for him to figure out how much more time he will need to go through all of the paperwork.

Anstey was also hoping the court would ask Eastern Health to turn over relevant documents and had subpoenaed two of the health authority's employees to be in court.

But Skanes said that will also have to wait until June, and Anstey would have to file a formal application with the courts to get those documents.

Afterwards Anstey spoke to The Telegram. He said if CRA - with all its staff and legal resources - has had the 40 boxes of evidence for about 18 months and still took 14 months to lay charges, he's going to need an adequate amount of time to prepare Hennessey's defence.

"We're hoping that these documents that are going to be produced ... will show that my client is caught up in the middle of this," said Anstey. "The charges are against him, but he's, I'll call it, the proverbial scapegoat."

Anstey said Eastern Health will provide him with the documents, but only after the court directs it to release the information.

"It's unfortunate for Mr. Hennessey," Anstey said.

"What it's done to him and his family over the years is basically cruel and unusual punishment. He's lost everything and now he's fighting to clear his name."

Anstey hopes the documents will help do that.

The original Telegram stories outlined how Hennessey used to do the payroll for hundreds of home care workers on behalf of their clients, and how Eastern Health had failed to tell him that some of those clients had outstanding balances owing to CRA before he was hired to cut their cheques. As a result, CRA is holding him accountable for the arrears.

Eastern Health and CRA tried to settle the matter in 2006, but when talks failed, the CRA set its sights back on Hennessey, saying he owed CRA hundreds of thousands of dollars in unpaid remittances, interest and penalties.

CRA laid the charges in January of this year. Before that, Hennessey launched a complaint with the province's office of the citizens' representative to see if it could help him resolve the issue.

Barry Fleming's report backed up much of Hennessey's story, but also laid some of the blame on him. Fleming wrote Hennessey "lacked business acumen" and his record-keeping was deficient.

But Fleming's report also states Hennessey tried to co-operate with both agencies and there's no evidence he misappropriated any funds.

"The actions of the CRA with respect to its dealings with Mr. Hennessey border on the unconscionable," Fleming stated, adding Hennessey was an "easy target" for the CRA.

dbartlett@thetelegram.com

Organizations: Canada Revenue Agency

Geographic location: Eastern Health, St. John's

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