- For a review of all findings please first read RCMP_Document attached immediately below in the link. The audit below will not make sense without this document sent to the National Crimes Division (first click may give ad, please click twice):
- https://docdro.id/XfDl2qa
Introduction
This document will outline the serious legal issues revolving around the connection between three charities, two in Canada and one in the United States under examination. Readers must empty their minds of any apriori assumptions about the operations of charities when reviewing this or subsequent texts. As will be shown, the architects of this transaction trail were not interested in charities for their content, but their legal format. Why this is so will become clear as the discussion unfolds.
A disclaimer is required: the purported charitable purpose, and even naming, of the charities involved, was likely selected as both a cover and to add an element of misdirection; shifting attention from economic injustice to an unrelated and heated social debate. A tactical choice which should be ignored by the reader. The analysis will be dry as a bone. Sorry.
Let’s introduce the charities. The source of our transaction trail is the Gerald Schwartz and Heather Reisman Charitable Foundation (“Schwartz Foundation”). It passed $2.25 million between 2010 and 2016 into the Canada-Israel Education Foundation (“Canada-Israel”), which expended $2.2 million in foreign activities, largely by paying a set of third-party intermediaries. It’s now defunct after having it’s charitable status automatically revoked on November 24th, 2018. The largest payments traceable from Canada-Israel were to the Friends of Israel Initiative (“Friends of Israel”), which is where we will find our politicians in the text to come.
Notarized copies have been approved for backup. Please see below for evidence in the transaction trail.
The key charity in the tripartite set is the middle-man connecting the two poles. A fraudulent Canadian charity named the Canada-Israel Education Foundation operating for a brief window between 2010 and 2016 run by powerful Israeli lobbyists Shimon Fogel, Stephen Victor, and Moshe Ronen, for the benefit of Gerald Schwartz, who provided the contributions through the Schwartz Foundation.
The discussion will be one of criminal conduct, providing solid evidence that the implicated lobbyists and billionaire political donor Gerald Schwartz violated s.380(1)(a) of the Criminal Code of Canada for Criminal Fraud over $5,000 among other crimes. This criminal penalty carries up to fourteen years in prison depending on aggravating factors.
Additional documentation will be referenced to provide detailed information proving certain allegations at the appropriate time. The raw evidence supporting this serious allegation is available and can be reviewed on this blog.
The application under scrutiny
Central to this discussion will be an Application to Register a Charity Under the Income Tax Act signed by Centre for Israel and Jewish Affairs CEO Shimon Fogel and Stephen Victor for the non-profit corporation the Canada-Israel Education Foundation (“Canada-Israel”) dated July 7th, 2009.
The application was obtained by the author from the Charity Directorate of Canada among other government documents relating to Canada-Israel using a Government of Canada Informal Information Request submitted in late 2018 which was responded to on August 30th, 2019. Given the documentation received, which included the subsequent Approval letter from the Canada Revenue Agency, all evidence indicates this document was the one used to obtain the tax-exempt status granted by the CRA on July 23rd, 2010 for Canada-Israel.
To complete the author’s argument, statements made by Fogel and Victor on the application will be checked against publicly available information from the time the application was submitted and verified for accuracy based on the charity’s subsequent operations using audited internal financial statements obtained from the CRA and its T3010 Charitable Information Returns (“T3010”).
Also at issue will be the T1236 Statement of Programs Supported (“T1236”) from the Schwartz Foundation between fiscal 2010 to 2016 at that private foundation. Relevant documents will be presented in the case discussion at the appropriate time.
Due to the unusual circumstances surrounding the collection of evidence during the investigation, the author will be relying heavily, though not solely, on archived balance sheets from the CRA website on archive.org. The reader should note that archive.org website captures have already been ruled legally admissible evidence in the United States. Though the author is unaware of a similar case in Canada, the use of this source should not dissuade the reader.
Fraud & Tax Evasion Summary
The full review of the Application is rather lengthy, so the material misstatements will be summarized:
a) The applicants warranted that more than 50% of the directors or like officials in the charity were arm’s length. This was false.
b) The applicants falsely warranted that no foreign activities were to be conducted by the charity.
c) The applicants falsely affirmed that no single donor or entity would provide 50% or more of the charity’s capital.
d) The applicants falsely claimed on the application that the charity would not engage in any political activities.
e) Additional false statements, particularly in the attached budget, supported these four main falsehoods.
It is a serious offense under the Income Tax Act to provide false or misleading information on this application. This is stated in bold font directly above the signature line signed by Shimon Fogel on the Application. The Income Tax violations, which can result in prison sentences, are serious and self-evident.
This is tax fraud. Even if the reader disagrees with the author’s interpretation of the evidence relating to criminal fraud, it does not change the seriousness of the conduct of the directors of the Canada-Israel Education Foundation or the Schwartz Foundation.
As for criminal fraud and breach of trust, there are multiple ways to make the case. The simplest route is to assert that the perpetrators’ fraudulent statements on the Application were intentional, that this deceived the CRA into approving charitable status that would otherwise not have been granted and this enabled Gerald Schwartz to avoid tax liability for a charity that made no effort to pursue its stated charitable purpose. A second viable route would be to focus on the false donation receipts issued by Canada-Israel. This second route is very similar to a number of CRA cases that have resulted in the Crown pursuing lengthy prison sentences, including the George NNane case. A third potentially viable route would address Canada-Israel’s directors not divulging on the Application that more than 10% of the charity’s resources would be devoted to the unstated purpose of political activities in contravention of the Income Tax Act.
An additional argument for Criminal Fraud not pursued below would cast the charity as in reality a vehicle for laundering payments to Stephen Harper. The author does not feel it necessary to go to those lengths to make his point, but encourages interested or knowledgeable parties to evaluate all additional materials to assess culpability in that case, especially the section Placement, Layering and the audit of the Friends of Israel Initiative. Certainly, a case can be made.
Next, I will outline the most complex method not involving fraud on the government, as it provides the best possible format for a concise review of the operations of the Canada-Israel Education Foundation and subsumes most other potential fraud routes. The only remaining route, that Canada-Israel was the Layering phase in a money-laundering plot to Stephen Harper, is simply a natural extension of what is presented here. The reader may make their own judgment call on more salacious interpretations.
Criminal Fraud
The relevant Criminal Code section is 380(1)(a),
380 (1) Every one who, by deceit, falsehood or other fraudulent means, whether or not it is a false pretence within the meaning of this Act, defrauds the public or any person, whether ascertained or not, of any property, money or valuable security or any service,
(a) is guilty of an indictable offence and liable to a term of imprisonment not exceeding fourteen years, where the subject-matter of the offence is a testamentary instrument or the value of the subject-matter of the offence exceeds five thousand dollars;
In R v. McCarthy (2008) paras 12–20, the SCC provides context on how to evaluate a dishonest act or deceit,
The act of fraud is made out where:
a) there is a dishonest act involving deceit, falsehood, or other fraudulent means assessed objectively through the eyes of a reasonable person as dishonest commercial conduct,
b) In instances of fraud by deceit or falsehood, the accused must, as a matter of fact, have represented that a situation was of a certain character, when, in reality, it was not.
Some definitions may be helpful. “Deceit” is an untrue statement made by a person who knows that it is untrue or has reason to believe that it is untrue but makes it despite that risk, to induce another person to act on it, as if it were true, to that person’s detriment (R v Garrick). “Falsehood” is a deliberate lie (R v Garrick).
The allegation is this: Shimon Fogel, Stephen Victor, and Gerald Schwartz intentionally conspired to deceitfully and falsely constitute a charity (“Canada-Israel”) for unstated purposes that were both not intended for the stated charitable activities of the organization and illegal due to the lack of sufficient direction and control over the use of resources by non-qualified donees. This act deprived the Canadian public of tax revenue on $2.63 million in contributions to the charity between July 2010 and November 2016.
There are two key facets to this allegation,
(a) Deliberate deceit and falsehoods in constituting the charity. An application was signed and submitted by Shimon Fogel, a lifelong Canadian lobbyist, and Stephen Victor, a licensed Ontario attorney. The intentional falsehoods on the application allowed Fogel and Victor to obtain charitable status for Canada-Israel. The reader must agree that the statements are both false and that the falsehoods are intentional.
(b) The resulting unstated purpose and illegal lack of sufficient direction and control over resources. The evidence must show the charity acted consistently outside of its legal obligations with respect to maintaining sufficient direction and control over its intermediaries and agents.
Culpability for each of the individuals named should be evaluated individually based on the presented evidence. Section 21(1)(a) of the Criminal Code states that “Everyone is a party to an offence who … (a) actually commits it;” A person “actually commits” an offence when he does some act “towards the commission of the offence” with requisite mens rea or uses an agent to commit it.
Schwartz, Victor, and Fogel will be argued to be joint principal offenders, which I personally believe is the case. Please note that it is not necessary for each joint perpetrator to perform every act that makes up the offence. Where acts are divided between parties they are still liable as principals. As Schwartz was controlling a separate entity from Victor and Fogel, if the reader disagrees with the author’s opinion that he is a joint principal offender, he should be reconsidered under the Criminal Code section for aiding and abetting. In particular, there is a very strong case against Gerald Schwartz under Common Intent, which will be discussed near to the end of the presentation of the evidence.
Criminal fraud also involves deprivation of something of value by an individual or the public. This deprivation must be causally linked to the falsehood. The former must follow from the latter.
Thankfully this is relatively simple to address in this case. Charitable status involves tax-exemption. This has a monetary value attached to it from the taxes that are not otherwise paid by donors into a charity. In this case, the Canadian public was deprived of the taxes payable on the revenue to the fraudulent charity caused by the CRA being deceived by the perpetrators’ false statements on their Application to Register a Charity Under the Income Tax Act into granting charitable status.
Additional Parties To The Offence
There are a number of prominent individuals besides billionaire political fundraiser and Onex Corporation CEO Gerald Schwartz and the Centre for Israel and Jewish Affairs CEO Shimon Fogel who are likely culpable for the conduct outlined here. All sit on the board of directors with Chairman Gerald Schwartz at the Schwartz Foundation.
Gerald Schwartz is primarily responsible for the activity of this private foundation. The bylaws of the Schwartz Foundation dictate that no decision can be made unless a majority of the board of directors voted in favour of supporting the decision and Gerald Schwartz votes in the majority if in attendance. If Gerald Schwartz is not in attendance, his wife Heather Reisman must vote in the majority for the decision to be adopted if she is in attendance.
There are several directors not listed below, including Ellen Babby, Reisman’s sister, and Rob Silver, the President of Chapters/Indigo working under Reisman. At a minimum, far more than half of the individuals listed below voted affirmatively for the transactions under review. In the author’s view, given the full weight of evidence, all members of the board of directors should be charged with Criminal Fraud. However, this document will not delve into issues of corporate accountability for brevity’s sake and instead focus solely on Gerald Schwartz, of whose culpability for the conduct of the Schwartz Foundation is not up for serious debate.
Having said that, knowledgeable parties associating with these individuals or related corporate entities, such as Onex Corporation, should immediately disassociate themselves from the listed individuals to protect themselves from reputational damage or legal liability in these acts.
Rob Prichard, Chairman of the Bank of Montreal, Canada’s third largest bank, and former President of the University of Toronto, Canada’s leading university. A former Dean of the Faculty of Law at the University of Toronto.
Ewout Heersink, Anthony Munk, and Seth Mersky. With Schwartz included, all Toronto-based Senior Managing Directors from Onex Corporation are present. Onex is a $33 billion private equity fund founded and controlled by Mr. Schwartz, the largest in Canadian history.
Heather Reisman, the long-time CEO of Chapters/Indigo, Canada’s dominant book retailer. Heather has maintained her position despite the company losing money in 29 of the last 40 quarters. Celebrated in Canada’s independent corporate media for her managerial acumen and not to avoid losing publishing placement for their books. Gerald naturally controls Chapters through Trilogy Retail and has done so for 20 years. Unsurprisingly, Heather is his wife.
Shabtai Shavit, former Commander of Mossad Special Operations. Israel’s last nameless spy, whose existence was denied for decades by the State of Israel. Widely regarded as one of the greatest intelligence agents of all-time. Gerald has also recently added Noam Erez, a second former Mossad spy and Commander of Special Operations, to his private foundation’s board of directors. Because one is never enough.
Aviv Bushinsky, the former Media advisor and Chief of Staff to current Israeli Prime Minister Benjamin Netanyahu.
Irving Abella, spouse of Canadian Supreme Court Justice Rosalie Abella.
The discussion below focuses on the conduct of the directors at Canada-Israel and the Chairman of the Schwartz Foundation, Gerald Schwartz. However, the above list will hopefully assist the reader to understand the difficulty and danger inherent to the investigation despite it fundamentally relying on what should in normal circumstances be easily verifiable public information.
The Directors at Canada-Israel
Canada-Israel was first formed as a non-profit corporation in December 2008 by our four Israeli lobbyists — Shimon Fogel, Moshe Ronen, Stephen Victor, and Jonathan Schneiderman — and then laid dormant until July 2009 when an Application to Register a Charity Under the Income Tax Act (“the Application”) was signed and submitted to the Canada Revenue Agency (“CRA”) by Canada-Israel’s corporate directors Shimon Fogel and Stephen Victor. As mentioned, the application was approved on July 23rd, 2010 by the Canada Revenue Agency and Canada-Israel obtained tax-exempt status as a Charitable Organization, one of three forms of registered charities in Canada.
The application lists Victor, Fogel, and Moshe Ronen as the inaugural directors at Canada-Israel’s charitable organization. CIJA CEO Shimon Fogel acted as Canada-Israel’s Treasurer, handling all the money. Stephen Victor was its Vice-President. Attorney Moshe Ronen, who runs exchange programs for CIJA and held a role as a Vice-President for the World Jewish Congress (“WJC”) during this time, acted as Canada-Israel’s President. Moshe is a compensated advisor to Gerald Schwartz, managing all of his charitable affairs and is a former director at the Schwartz Foundation. He will be discussed in more depth in a later section. Jonathon Schneiderman was listed as a director at Canada-Israel’s non-profit corporate shell but wasn’t added to the charitable board of directors until late-2014, likely because the letter of Canadian law requires only three individuals on a charitable board upon founding. Unsurprisingly, none of the lobbyists publicly acknowledge their roles at Canada-Israel in any public source.
It should be noted here that two directors, Moshe Ronen and Stephen Victor are licensed attorneys in the province of Ontario. Both are in good standing with the Law Society.
We’ll first delve into the Application by meeting the lobbyists who signed it. Shimon Fogel is a lifelong lobbyist, beginning his long lobbying career as director of Government Relations at CIJA’s predecessor, the Canada-Israel Committee, in 1988. From a relatively humble start, Fogel worked his way up to eventually obtaining the CEO position of the Canada-Israel Committee in 2001 before earning the CEO role at CIJA on December 8th, 2010 when the Canada-Israel Committee was absorbed into CIJA. With decades of experience on Parliament Hill Fogel has networked his way into incredible access. Over the prior decade, Canadian political observer The Hill Times has consistently ranked him as one of Canada’s 100 most powerful Lobbyists and Top 50 Influencers on Canadian Foreign Policy. He’s as big a name in modern Canadian lobbying as it gets.
The other co-signor of the Application alongside Fogel is Stephen Victor. He is the former Chairman of CIJA’s predecessor the Canada-Israel Committee and a licensed attorney in Ottawa, Ontario at Victor Vallance Blais LLP. Given Victor’s professional responsibilities as outlined in The Law Society of Ontario’s Code of Conduct, he is obligated to refrain from engaging in any dishonest or illegal conduct in any professional capacity. This means Victor’s professional responsibilities could be covered by Canada-Israel’s operations considering he acted as this charity’s Vice-President.
Mens Rea Key Point
Stephen Victor and Shimon Fogel have extensive experience in the Canadian non-profit sector. Victor is an Ontario licensed attorney. These are both sophisticated executives and professionals who are well aware of their legal obligations with respect to the application, and among the most qualified individuals in Canada to plan and operate a new charity. Therefore, it should be expected that Canada-Israel’s operations will reasonably reflect the statements signed by Victor and Fogel on the application.
Falsehoods
The Application submitted to obtain charitable status contains a number of falsehoods and misstatements. Far from being due to carelessness, there is a pattern to the misstatements which evinces the intent of the conspirators. This will be discussed through the subsequent presentation of evidence.
Mens Rea Key Point
A pattern exists on the application whereby falsehoods reinforce each other and obfuscate specific facts about the charity’s coming operations. The only Application questions answered falsely are those which are required to hide key elements of the charity’s coming operations, or reinforce these necessary falsehoods on the Application.
The Budget
The Application requires that those applying for charitable status submit a budget for the charity’s first year of operations (Part 4 of the Application). The budget can be checked versus other statements on the application made by its signatories for accuracy, and give the CRA an idea of the size of the operation.
The budget submitted with the Application for the charity’s planned first year of operations is laughably fictitious. It posits employees. There are none. It posits an office. There is none. It includes a revenue figure. The actual figure is more than twice as high.
Most importantly, the included budget states there will be no foreign activities (Part 4 Question C). In reality, almost three-quarters of expenditures before gifts to qualified donees in the first year of charitable operations were for foreign activities. It is very difficult to believe that a signed budget can miss 75% of subsequent expenditures and still be said to be honestly submitted. This is the start of a consistent pattern of deceit on the application surrounding the charity’s subsequent operations to operate outside of Canada. The pattern is what will help prove that the signatories to the application intended the deceit beyond a reasonable doubt.
First-Year Financials Canada-Israel Education Foundation
Major Contributor
Fogel and Victor also answered negatively as to whether the charity would receive 50% or more of its contributions from a single donor or group within arm's length of each other. (Question 10c). This is what is known in charitable parlance as a major contributor, and at the time the application was filed, it was technically illegal for a charity to have a single donor contribute more than 50% of a charity’s capital under section 149 of the Income Tax Act (“the Act”) and would be until an amendment of the Act in 2013.
In reality, 85% of all contributions into Canada-Israel across its six subsequent fiscal years, the entire operational lifespan of the charity, were donated from one single trust controlled by Gerald Schwartz. The donation total from Schwartz’s private foundation was overwhelming across all fiscal years Canada-Israel was active and began immediately after Canada-Israel obtained charitable status.
The overwhelming support started immediately after status as a charitable organization was granted by the CRA. In fiscal 2011, Canada-Israel’s first fiscal year, the registered charity declared only $544,482 in total revenue. Yet the Schwartz Foundation declared $33,333 in contributions to Canada-Israel in its 2010 fiscal year and a whopping $729,027 in its fiscal 2011 year. This massive disparity makes sense only if one considers the misalignment between the fiscal year ends between the donee and the donor (11/30 at the Schwartz Foundation and 06/30 for Canada-Israel). Simple arithmetic requires a substantial portion of Schwartz Foundation’s 2011 contributions to leak into Canada-Israel’s 2012 fiscal year.
In fact, even if only the Schwartz Foundation’s fiscal 2011 contributions are counted, irrespective of its 2010 or 2012 fiscal year donations, it still would have made a stunning 65% of all contributions in Canada-Israel’s first two fiscal years. That is dominant, overwhelming, and immediate support well above the 50% cut-off for the application.
After including the 2012 and 2010 donations, the Schwartz Foundation actually provides 107% of all support during the first two fiscal years of operations at Canada-Israel. Again, this is only possible when accounting for the different year-ends and assuming support from 2012 leaked into Canada-Israel’s 2013 fiscal year. The co-signors on the Application knew full well where the money would be coming from. There was little coming from anywhere else.
Given the overwhelming size of support from the Schwartz Foundation, it is already not reasonable to believe that this misstatement was not intentional. However, if any doubt remains, more evidence will be presented to buttress the claim.
This misstatement allowed Fogel and Victor to skip three detailed questions on the Application regarding the charity’s relationship to the major contributor listed directly below the checkbox for question 10c. These are very prominent on the application. These questions include the requirement by the applicant to describe any relationship, including employment relationships, between the major contributor and the charity’s directors. This space is left blank, despite Canada-Israel President Moshe Ronen being a compensated advisor to Gerald Schwartz. As will be discussed in more detail in a later section with supporting documents, Ronen manages Schwartz’s charitable affairs in Canada.
The Donation Receipts
Most importantly, Canada-Israel Treasurer Shimon Fogel consistently misstated lines 4500 and 4510 on the T3010 Income Statements separating contributions from individuals where a donation receipt was granted and contributions from tax-exempt entities like the Schwartz Foundation. This was done to evade auditors detecting Schwartz’s role as a major contributor (over 50% of total contributions).
Unfortunately for Fogel, the net effect of these misstatements was Canada-Israel publicly stating that the charity fraudulently issued over $1.3 million in donation receipts. This was confirmed using T3010 information and Canada-Israel’s own obtained audited balance sheets and income statements. This represents another viable route for the pursuit of a criminal fraud charge.
Canada-Israel’s obtained independent audits for the fiscal years 2013–2015 included a Qualifying Opinion (auditors statements and balance sheets attached below). The audit firm was only given the totals split between donations where a donation receipt was issued and contributions from registered charities. In other words, the T3010s accurately represent the internal totals, but the audit firm has not physically seen the donation receipts. In court, Fogel will argue that these totals were internally tabulated in error. Year after year, covering a whopping $1.3 million, despite the charity never fundraising (this will be discussed in a later section), only having to tabulate a few dozen donations across its entire lifespan, and despite the donations almost entirely being made in large allotments from one trust controlled by Gerald Schwartz. While Canada-Israel’s President Moshe Ronen concurrently managed Schwartz’s charitable affairs as his compensated advisor. And after submitting the Application falsely claiming Canada-Israel would not have a major contributor.
It’s a steep hill, but it’s all Fogel’s got. I’d love to see the jury’s faces while Fogel squirmed on the stand trying to make the argument.
Personally, I think it’s another knockout fraud route. Please see The False Returns for details and you may confirm using evidence previously presented.
Please see Supplement: The False Returns and A Warning to the RCMP
It should be noted that 89% of Canada-Israel’s revenue total was traceable from a private or public foundation. The remaining 11% were untraceable donations from individuals. As will be discussed later, the other traceable donations, all tiny, would come from close allies of Gerald Schwartz himself. Though it does not affect the analysis in any way, this author feels it very likely that the untraceable 11% was donated by Schwartz personally. It is the only rational conclusion considering 95% of traceable donations came from the Schwartz Foundation.
Schwartz Foundation donations and Canada-Israel Revenue Figures for reconstructing the payment trail (case continues below).
Note: Talk about fortuitous. This case was only salvageable after the May 2019 data loss from the CRA changes because I accidentally archived the 2011 T1236 from the Schwartz Foundation instead of the 2011 Foreign Activities schedule for the Canada-Israel Education Foundation. The Schedule was in the next browser window. These 2011 donations were the largest payments made to Canada-Israel, and there was no other backup source of any kind. A mistake is the only reason why I can even write this today.
Donations 2011 (archived April 4th, 2019)
Donations 2012 (Blumberg archived copy, please see notation for a link to original)
T1236 2013 (Downloaded July 14th, 2019 before data loss)
CLICK HERE T1236 2014 ($573,540) Please see donation #1530 from Blumbergs Law…original now disappeared from the Gov Canada Website.
T1236 2015 & 2016 still available on Government Charity Search
Note: For T1236 2016, the $136,023 donation is mislabelled. This was intentional and Schwartz’s reasoning is discussed in the False Returns supplement. Use the BN Number for the Canada-Israel Education Foundation to identify it and confirm with the address details attached to the slip.
The archived T3010 balance sheets for the Canada-Israel Education Foundation are below.
Fiscal 2016 https://apps.cra-arc.gc.ca/ebci/haip/srch/t3010form23sched6-eng.action?b=823611223RR0001&fpe=2016-06-30
*Notarized copies available from the author
Audited Financial Statements
Importantly, the investigation was able to obtain a number of the internal and independently audited financial statements from Canada-Israel. The revenue totals from the T3010 Charitable Information Returns and the expense figures (where applicable) matched perfectly. Given access to internal financial documents, it is not reasonable to assert that any accounting mistake has occurred.
Foreign Activities
Much of the application involves the conspirators filling in checkboxes. It could be otherwise argued that the misstatements were therefore due to carelessness.
That is not the case with the most important series of misstatements with respect to the charity’s intention to commit foreign activities. As already outlined, a budget was submitted on the application deliberately stating that the directors at Canada-Israel had no intention of carrying on activities outside of Canada. A budget involves careful planning of subsequent operations.
This budget is part of a pattern with clear intent. The most important material misstatement on the application is actually written down.
Shimon Fogel and Victor wrote in the available space for question 11.a, which requires applicants to describe the activities of the charity,
Purpose- The objects of the Corporation are to advance education by providing opportunities for individuals to study the historic bilateral relationship between Canada and Israel.
Activities in support of Purpose — Providing individuals with financial assistance to travel and study in Israel
This is the purpose of a charity and how the purpose will be fulfilled by the charity. These are the reasons that the CRA has granted tax-exempt status. We should, therefore, expect subsequent operations at the charity to reflect this purpose and activity.
In the answer to question 11c, the CRA requires applicants to describe any foreign activity that will be undertaken by the charity in support of its purpose. In that space the applicants wrote,
While the organization will provide funding to allow individuals to study in Israel, all activities of the organization will take place within Canada.
This statement was confirmed twice on the Application with tick boxes checked as NO asking whether Canada-Israel would undertake any activity outside Canada. It was confirmed three times on the application, including in writing. When combined with the budget we now have a pattern of explicit intent beyond any reasonable doubt. Canada-Israel will not conduct foreign activities.
Well then, isn’t that interesting? Virtually all of Canada-Israel’s “activity” while the charity was active between July 2010 and November 2016 occurred outside of Canada. Of the $2.57 million in total expenditures Canada-Israel ever made no less than $2.2 million — 86% — was expended outside Canada as per Canada-Israel’s Schedule Two: Activities outside of Canada. This included paying multiple foreign third-party organizations to act as intermediaries for a total of $1.76 million — more than two/thirds of all revenue Canada-Israel ever declared. The CRA requires written agreements with third-party intermediaries to be attached to applications for charitable status where applicable for legal review. None were. Even in its first year of operations, Canada-Israel expended $170,000 of its $237,412 of expenditures before gifts to qualified donees outside Canada, almost three-quarters of the total.
A comparison between Canada-Israel’s actual operations and the directors’ statements on the Application are damning. Fogel and Victor’s application statement on planned foreign activities at Canada-Israel can be interpreted as nothing less than a bald-faced lie.
Operations of the charity
There was a reason the Application could not be submitted honestly. After Shimon Fogel and his lobbying brethren obtained tax-exempt status on July 23rd, 2010, they made no effort to operate Canada-Israel as an honest ongoing charity. Across its six total years of operations, Canada-Israel never had an employee, never trained a volunteer, never made any grants, never advertised, never fundraised, did no marketing, and never even had a physical office. Its corporate headquarters were split between a real estate development office associated with its President and director Moshe Ronen and a ramshackle run-down building on the outskirts of Toronto so dilapidated Yelp Reviewers have submitted photographs of rats running across its floors and a strange white substance caked across its elevator buttons.
On Part Four of the application, the signatories described activities in pursuit of the charity’s purpose in fiscal 2011 as seminars, a speaker series, an academic exchange program, and conference participation. All within Canada. None of this could have occurred according to the charity’s own balance sheets. There were no travel expenditures, no occupancy costs, no employees, no volunteer training, no educational grants, and no supplies. Nothing but $67,000 in professional and consulting fees on Line 4860 (reserved for administrative legal, accounting, and fundraising fees) and $170,000 in foreign activities that should never have happened. It’s a total and complete lie.
There’s actually very little that can be written about the Canada-Israel Education Foundation’s operations besides the intermediaries. The charity’s website was even a blank page with an under construction logo for six years.
Despite listing its charitable purpose on the Application as “advancing education by providing individuals an opportunity to study the historic bilateral relationship between Canada and Israel” and activities in support of this purpose as “providing individuals with financial assistance to travel and study in Israel” Canada-Israel never listed one financial or educational grant on any of its Income Statements. It’s travel expenses were tiny in comparison to total expenses. The charity never spent more than $36,000 in any fiscal year on travel expenses, and in that fiscal year, 2015, the charity listed $699,458 in total expenditures. In 2011 there were no travel expenses at all. The vast majority all of expenditures on charitable programs were made outside of Canada as foreign activities conducted by third-party intermediaries separate from the charity.
What is most surprising about the T3010 financials is that despite having no outward operations whatsoever, including no employees or even its own office, Canada-Israel stated that they spent over 92% of their $2.57 million in expenditures on charitable programs towards their own activities between fiscal 2011 and 2016. Only 4.6% of the total expenditures were on management and administration. These totals were verified using the obtained audited financial statements. These are not errors on the T3010.
The directors did it all, millions in contributions and millions of charitable services, despite never fundraising. They submitted on both their audited financial statements and T3010s that they never spent a dollar on fundraising.
Despite Shimon Fogel and Stephen Victor’s wild success with virtually no effort, the charity died of seeming neglect. It all starts on May 27th, 2016 when Shimon Fogel submits a Form 4003 with the Canada Revenue Agency to change the address of the charity’s non-profit corporate shell to 19 Lesmill Road in Toronto, Ontario.
Strangely, Shimon submits his request with a contact number that rings a boardroom in Exhibition Place and not his real phone number. A second address update is then submitted by Fogel on November 14th, 2016 adding his personal assistant at CIJA, a legally unrelated entity, to the address of the Canada-Israel Education Foundation.
That appears to mark the end. The fiscal year-end was June 30th, 2017. The relevant T3010 was never filed by the directors. After multiple revocation warning letters, the CRA revoked status as a charitable organization on November 24th, 2018 and Canada-Israel ceased to exist.
Canada-Israel outwardly appears to be some kind of failed experiment by four Israeli lobbyists which succumbed to its lack of infrastructure. Again, nothing to see.
Except it wasn’t. It was exceptionally well run.
The charity suppressed expenditures in fiscal year one, expending only $257,412 of its $544,482 in total revenue, with the remainder being stored entirely in cash and short-term assets. In fiscal 2012, all balance sheet assets were converted to cash.
You might expect that Canada-Israel’s directors intended to keep a healthy balance sheet, with cash reserves to buffer the variance in annual revenue. That’s what the behavior of the directors at Canada-Israel in 2011 indicates.
You’d be wrong. Instead, the cash reserves are drawn down linearly. After fiscal 2011, the charity operates with a consistent level of small net losses closely matching operating expenditures. Incoming annual revenue closes matches, almost dollar for dollar, with foreign activity expenditures. The calculation of balance sheet assets minus liabilities, highlighting this balance sheet descent, hits zero right when Shimon Fogel submits his address changes and decides to forgo filing the 2017 T3010 Charitable Information Return with the Canada Revenue Agency.
Why the address change to 19 Lesmill Rd? Despite the less than cozy confines at 19 Lesmill Road in May 2016, before its renovation, there was one man with an office there. Dan Ronen, Canada-Israel President Moshe Ronen’s brother.
This was a budgeted project for a fixed period of time which was carefully planned by the participating expert conspirators.
The Conduit
There is no other way to explain how Canada-Israel spent 92% of total expenditures on charitable activities without the $2.2 million in foreign activities payments — 86% of total expenditures.
Unfortunately, much of this activity was not conducted in accordance with the Income Tax Act. In fact, not at all.
In reality, Fogel and his co-conspirators wantonly operated Canada-Israel as a conduit, illegally funneling huge sums out of Canada to a total of seventeen identifiable organizations and individuals in Israel and the United States who were almost invariably unqualified to receive them.
The CRA does allow charities to deploy what are known as intermediaries in foreign locales to carry out their charitable objects. The CRA defines an intermediary as, “a person or non-qualified donee that the charity works with to carry out its own activities.” The key phrase is “Own Activities.” The intermediary must work in furtherance of the charity’s objectives and purpose and not its own purposes. This is known as the Own Activities Test, and the CRA’s criteria is very restrictive. The intermediary must work on activities “directly under the charity’s control and supervision, and for which for which the charity can account for funds expended” (Carters, Pg 5).
To evaluate whether a charity passes the Own Activities Test, the CRA requires that charities maintain sufficient “direction and control” over their intermediaries. These relationships are never monetary gifts. It does not matter if the deployed intermediary is a charity in a foreign jurisdiction. An intermediary is a non-qualified donee receiving the payment to work on the Canadian charity’s activities and not its own activities. When a charity uses intermediaries to make donations, it is known as having acted as a conduit, a very serious offense under the Income Tax Act.
A conduit is defined in CRA Guidance as,
… a registered charity that receives donations from Canadians, issues tax-deductible receipts, and funnels money without direction or control to an organization to which a Canadian taxpayer could not make a gift and acquire tax relief. Acting as a conduit violates the Income Tax Act, and could jeopardize a charity’s registered status.
The CRA takes conduits very seriously. In general, a charity must have a written agreement with an intermediary, a schedule of deliverables, and a time table. The activity must be well-defined, and the intermediary must report back to the charity. The charity should have the ability to intervene in the intermediary’s conduct while acting as an intermediary. Funds should not be co-mingled.
From Author: Please review CRA Guidance for details on the Own Activities Test, the definition of a Conduit, and the requirements of “direction and control”: Government of Canada Website
The Federal Court of Appeal has rendered three decisions ( The Canadian Committee for the Tel Aviv Foundation, Canadian Magen David Adom for Israel, Bayit Lepletot) concerning charities using intermediaries to carry out foreign activities. In all cases, the Federal court has confirmed that a charity must control the activities carried out on its behalf by the intermediary, and over the use of its resources.
Multiple sources of evidence, including the tax returns obtained from intermediaries, intermediaries’ public disclosures and statements from executives at these organizations have all corroborated that Canada-Israel did not maintain any form of direction in control in many if not all cases. It acted as a conduit, sending donations to non-qualified donees. This is extremely serious and represents unlawful activity undertaken by Canada-Israel and its directors.
The full list of intermediaries from Canada-Israel’s Schedule Two is presented below. With the exception of the Interdisciplinary Center Herzliya (“ICH”), a registered international university of which all are qualified donees, none of these organizations are qualified international donees. If a donation has been made, or if sufficient direction control has not been maintained, the payment violates the Income Tax Act to any of these organizations except ICH.
The following analysis validating the above claim will be conducted in a similar fashion to a CRA audit. In this case, special attention is paid to the fact that the directors of Canada-Israel incorrectly listed multiple intermediaries on many T3010 Schedule Two: List of Foreign Activities lines. This schedule was designed by the CRA for one intermediary to be listed per line, so the CRA could evaluate whether the elements of sufficient direction and control had been maintained by the deploying charity over its intermediaries. Canada-Israel has not submitted its T3010s correctly in this respect, which itself is a red flag. On many lines of Canada-Israel’s Schedule Twos, it is impossible to discern even the monetary value paid each intermediary due to this inappropriate cramming technique. Canada-Israel would likely have to argue that these intermediaries on crammed lines were working together on a specific project.
But not every line. Therefore, special consideration in the audit analysis is given where one intermediary is listed with one monetary value. These are,
(a) The Friends of Israel Initiative Inc;
(b) Schusterman Foundation — Israel;
(c ) The Lawfare Project;
(d ) Israel Brain Technologies;
(e) Shurat Hadin
In four of the five cases where an intermediary was listed individually, evidence was obtained to show, beyond a reasonable doubt, that sufficient direction and control was not maintained by Canada-Israel. In the case of the one exception, Shurat Hadin, no evidence was obtained that the Israeli charity had ever associated with Canada-Israel in any way.
In addition, several other intermediaries will be analyzed from the combined lines. The addition of these intermediaries will show that over 92% of the intermediary payment total of $1,760,607 violated the CRA’s requirement for sufficient direction and control.
A special note should be explained about these crammed lines. If one intermediary on a crammed line can be shown to have acted as a conduit, then it is impossible to reasonably argue that these combined lines are valid projects undertaken by multiple groups. Instead, it is more reasonable to assert that all intermediaries on that line received payments as donations like the intermediary who did act as a conduit.
The goal of the following presentation is to show beyond any reasonable doubt that Canada-Israel displayed a consistent pattern of not maintaining sufficient direction and control such that it can be said to have not operated exclusively for its charitable purpose. That is different than saying the charity never did. There needs to be a consistent pattern that it did not do so exclusively. If the reader agrees, then the author has done his job and criminal fraud occurred. A supplementary document should be referenced for additional details if the reader remains unconvinced.
The Friends of Israel Initiative Inc
In fiscal 2012, Canada-Israel made a $240,000 payment to a Miami, Florida charity called the Friends of Israel Initiative Inc (“Friends of Israel”, see above graphic, bottom-center), the first of four payments to this entity made by Canada-Israel. This organization was located and its tax returns obtained. It is a registered non-profit American charity in Miami, Florida. Given that half of all traceable intermediary payments made by Canada-Israel involve this single entity a full audit of this charity has been conducted. Relevant findings from that audit will be reproduced here.
The Friends of Israel’s tax returns are linked below. It is important for the analysis to note that every relevant tax return from fiscal years 2011 until 2016 clearly state that this American charity is not a, and has no, related organization (Questions 33 through 38 on tax returns). The tax returns also declare that the Friends of Israel holds no interest or signing authority for any financial account in a foreign country (Part V 4a). The Friends of Israel in Miami, FL has declared that it is an independent tax-exempt entity operating within the United States with accounts in the United States and was treated as such by the audit.
Interestingly, the American charity was formed on September 8th, 2010, just weeks after Canada-Israel obtained charitable status on July 23rd, 2010.
The Friends of Israel Initiative has the same year-end, June 30th, as Canada-Israel. Therefore, payments made by Canada-Israel to this charity can be matched one for one. The first $240,000 payment made by Canada-Israel represented no less than 57% of all revenue declared by the Friends of Israel on its 2012 IRS tax return. In this fiscal year, Canada-Israel was essentially floating the charity by deploying it as its intermediary.
It is very difficult to understand why. The CRA requires that Canadian charities only select foreign intermediaries that have the capacity to complete the Canadian charity’s project and purpose. Rationally, a foreign intermediary that relies upon the single deploying Canadian charity for the majority of its revenue will not have the capacity to be of any use as an intermediary.
Nor does the Friends of Israel have this capacity. According to its tax returns, the Friends of Israel had no employees (Part 1 Q5), no infrastructure, no tangible assets, no marketing, no volunteers (Part 1 Q6), and only four unpaid directors (Part 7) during fiscal 2012 working for the charity only 5 hours per week. It would never obtain any infrastructure over the timeframe Canada-Israel stated that it was deployed as an intermediary. It is an empty shell, with millions in revenue and millions in contractual fees and travel expenses and virtually nothing else.
This is an impossible situation. The Friends of Israel has, and never has had, an employee or volunteer. Its unpaid directors only nominally associate with the charity. Until fiscal 2014, there were only 1000 annual hours of human activity associated with this charity per year (Part 7). There was a grand total of 3300 hours afterward, made by only two directors domiciled in Spain and not the United States.
Canada-Israel deployed a foreign intermediary that operated exclusively by deploying third-party contractual services. Canada-Israel was required by law to go to the source. This American charity could not, under any circumstance, perform any activity of any kind justifying the amounts paid to it by Canada-Israel.
The Friends of Israel Tax Returns (Link)
https://projects.propublica.org/nonprofits/organizations/273480535
The only individuals legally associated with the Friends of Israel were its directors. There were four in fiscal 2012, and only three after 2015. Three of the directors are Spaniards not located in the United States, and one is a local Miami attorney named Juan O’Naghten. According to the Friends of Israel’s tax returns, the charity’s address is Mr. O’Naghten’s suburban law office.
The first payment made by Canada-Israel to the Friends of Israel came in fiscal 2012 for $240,000. In that same fiscal year, the Friends of Israel submitted to the IRS on Part VIII of its I990 Charitable Organization Tax Return that it earned $419,315 in total revenue. This single payment represented 57% of all declared revenue by the Friends of Israel in that fiscal year. All revenue is declared on Part VIII as “All other contributions, gifts, grants and similar amounts” line 1f of the I990’s Statement of Revenue. This is the line for gifts that are not either membership fees, government grants, fundraising events, or federated campaigns. It is the line for simple donations.
Non-cash contributions are required to be separated from the total on line 1f on the next line, 1g, of Part VIII. There are no non-cash contributions on this line in fiscal 2012, or any fiscal year. This inescapably makes the payments made by Canada-Israel cash gifts. This is a very big deal. Intermediary payments are never cash gifts, contributions, or grants. Intermediary payments are not unencumbered monetary donations. The legal requirement of sufficient direction and control is never maintained in a cash gift.
I990 Tax returns also include a Support Schedule for Organization Described in IRC 170(b)(1)(A)(iv) and 170(b)(1)(A)(vi) in Schedule A. This support schedule requires American charities to specify the type of support received so the IRS can apply several tests necessary for the charity to pass in order to maintain status as a publicly supported organization. There are several potential options on the schedule for entering revenue to complete the IRS Assessment. In the case of the Friends of Israel, the charity indicated that virtually all revenue in fiscal 2012 and every fiscal year was earned on Line 1: Gifts, grants, contributions and membership fees (Do not include any “unusual grants”). Again, these are donations for the Friends of Israel’s purposes and not the charitable purpose of Canada-Israel.
Only $250 is declared by the Friends of Israel in the Other Income category on Line 10 of Schedule A in any fiscal year. This is not nearly a large enough total to encapsulate the intermediary payments. On line 9 of Schedule A, the Friends of Israel is required by the IRS to declare revenue from unrelated business activities, whether or not they are regularly conducted. This would appear to be the appropriate line on the I990 to declare the payments from Canada-Israel. The Friends of Israel is not a qualified donee, instead, it shares far more in common with a contractor or joint venture partner in this relationship. This line is left blank on every available tax return.
Additionally, no Schedule R is included on any of the submitted tax returns from the Friends of Israel. Schedule R is used to describe Unrelated Partnerships, including joint ventures. Given Canada-Israel’s statements on its information returns that hundreds of thousands of dollars were expended using the Friends of Israel as an intermediary, it appears very suspect that no Schedule R was ever submitted by the Friends of Israel outlining any details of this relationship, especially in fiscal 2012 when 57% of all revenue was obtained from Canada-Israel. There is no evidence of the Friends of Israel’s relationship with Canada-Israel on any tax return.
These are professionally prepared tax returns by Certified Public Accountant Carlos Farah from accounting firm Applerouth Farah & Co. They are legal documents submittable in court as evidence under the Canada Evidence Act. Given that these returns were professionally prepared by a licensed accountant and partner at a major accounting firm, it is not reasonable to claim that they were submitted incorrectly or unprofessionally. Let’s be clear: a professional accountant has prepared and submitted to the IRS multiple tax returns stating that Canada-Israel acted as a conduit. This is damning. This evidence source alone, irrespective of any other source in this presentation, is enough to prove that Canada-Israel acted systematically as a conduit across multiple fiscal years. It alone implicates one-third of declared revenue over Canada-Israel’s entire lifespan.
Though the Friends of Israel has no employees or infrastructure, it does have a website, and the web address is clearly listed on every tax return. This source was checked with an eye towards fiscal 2012 when Canada-Israel provided the majority of this charity’s revenue.
As will be reviewed in more detail in the section dealing with the audit of the Friends of Israel, the website includes a detailed event log of all activities undertaken by the charity. The website also reveals that numerous high-profile political figures are associated with this charity, including Stephen Harper, who arrive shortly after Canada-Israel stops filing its required T3010s in fiscal 2016.
As a brief aside, many of these politicians publicly acknowledge that they join the board of directors of this charity; which is strange because the tax returns for the Friends of Israel clearly show that they do not. In fact, there is no legal relationship between the charity and the politicians at all, even though Stephen Harper today publicly acknowledges himself as the “Executive Chairman” of the Friends of Israel, implying a legal relationship of some sort, which is totally absent on the charity’s tax returns.
Back to the audit. American charities are required to disclose their program service accomplishment’s for the fiscal year on Line 4a of Part III. The Friends of Israel disclosed,
“The organization created and disseminated various working papers and other materials in furtherance of its primary purpose”
All working papers created during this fiscal year are available through the Friends of Israel’s website and were reviewed by the author. Canada-Israel’s charitable purpose is the education of historical and contemporary dimensions of Canada and Israel’s bilateral relationship. Not a single working paper created in fiscal 2012 has any reference whatsoever to Canada or its relationship to Israel. In fact, no working paper ever produced by this charity references Canada in any substantive capacity at all.
There is also a detailed event log available on the Friends of Israel website. This event log lists activities undertaken by the charity during the fiscal year. Not a single event in the log lists Canada as a topic during the fiscal year of 2012, or any fiscal year.
The event log and materials released by the Friends of Israel from the relevant fiscal period do, however, clearly document the participation of a director from the board of directors of Canada-Israel at an event organized by the Friends of Israel. Unsurprisingly, it is Moshe Ronen, the director who was directly employed by Gerald Schwartz in a different capacity during this time period.
Moshe is directly listed on the Friends of Israel’s website participating in the September 5th, 2011 Friends of Israel meeting at the British House of Commons. This is fiscal 2012 when 57% of the Friends of Israel’s revenue was obtained from Canada-Israel. He is pictured (far right) at a table at the event in material released by the charitable organization with a Friends of Israel logo clearly in the background. This is the only trace of Canada-Israel at the Friends of Israel, despite the multi-year intermediary relationship between the two charities.
The topic for the meeting is listed by the Friends of Israel as “ Palestinian Statehood and the September UN Gambit: A Recipe for Conflict or Consensus?” According to materials released by the Friends of Israel, then Executive Chairman for the Friends of Israel Jose Maria Aznar organized the event to discuss the implications of the Unilateral Declaration of a Palestinian State by the UN. In a speech given to a small audience at a room adjacent to the British House of Commons he emphasized his own conviction that although the declaration by the UN would have some consequences, they would not be “as dramatic as some think”
Two working papers were produced from discussions at the event, “The Palestinian Unilateralist Course and the Responsibility of the International Community” and “No Path to Peace: The Potential Consequences of Palestinian Unilateral Actions at the United Nations General Assembly”. Both papers deal exclusively with the UN’s obligations given the potentiality of PLO Leader Mahmoud Abbas unilaterally declaring a Palestinian state. Specifically, they provide recommendations to EU Members States who are members of the UN General Assembly on how to vote in Israel’s interests if Abbas did declare. Neither paper mentions Canada or references Canada Israeli bilateral relations in any way.
The CRA Policy Statement (CPS-022) defines “Political Activities” as any activity which “seek to further the interest of a political party or support a political party or candidate for public office, or retain, oppose, or change the law, policy or decision of any level of government in Canada or a foreign country”. The activities described above and engaged in by the Friends of Israel and Canada-Israel director Moshe Ronen fall within this definition. In fact, virtually all activities by the Friends of Israel available in the public domain are undertaken by recently retired politicians to lobby or advocate for changes to existing government policy or international law.
Canadian charities cannot devote more than 10% of their annual resources to political activities ancillary to their charitable purpose. There are four major payments to the Friends of Israel by Canada-Israel in four separate fiscal years. In each year, these payments take Canada-Israel above the 10% cut-off for political activities. The charity only operated for six fiscal years.
Answering Question 14 of the Application, Shimon Fogel and Stephen Victor warranted that Canada-Israel would not engage in any political activities. On every T3010 Charitable Information Return between 2011 and 2016, Canada-Israel submitted to the CRA that no resources were devoted to political activities (Line 5030, please see T3010 balance sheets). These are both fraudulent claims. They are also reaffirming falsehoods which evidence intent; the subsequent T3010 misrepresentations were necessary to conceal the initial falsehood on the application.
As was another important misrepresentation. Moshe Ronen was not identified nor described as a board member of Canada-Israel at the event by the Friends of Israel in any material available online. He was instead introduced only as Vice-President of the World Jewish Congress, despite the $240,000 payment made by Canada-Israel during the fiscal year 2012 when the event was held representing the majority of the Friends of Israel’s revenue.
The totality of evidence is damning.
(a) The Friends of Israel does not have the capacity to act as a valid intermediary;
(b) The Friends of Israel’s tax returns submitted that the payments were gifts and/or donations and not legally valid intermediary payments;
(c ) The Friends of Israel produced no publicly available product relating to Canada-Israel’s charitable purpose and never publicly acknowledges their deep relationship.
(d) Despite the multi-year legal relationship between the two charities, and despite Canada-Israel providing the majority of revenue to the Friends of Israel in one fiscal year, where any association could be found between the two charities, it was obfuscated due to misrepresentation (e).
(e) Canada-Israel engaged in political activities well above the 10% annual limit in at least four of its six fiscal operating years and lied on its application.
Beyond any reasonable doubt, sufficient direction and control were not maintained over the $871,000 in intermediary payments listed by Canada-Israel involving the Friends of Israel.
(ii) An attempt at contact was made to all intermediaries regarding their association with Canada-Israel. Most chose not to respond. However, the Executive Director Miri Polachek at Israel Brain Technologies ( fiscal 2014) did respond to an email request regarding the $50,000 payment received from Canada-Israel. She confirmed that sufficient direction and control was not maintained.
Emails provided in a court-admissible format are valid evidence in a court of law.
(iii) Aviv Bushinsky is listed by Canada-Israel as an agent in fiscal 2015. Bushinsky is a paid employee of Gerald Schwartz and a Vice-President and director at the Schwartz Foundation providing the overwhelming amount of donations to Canada-Israel. Bushinsky is extremely important to Schwartz, acting as his direct representative in Israel. He works at Gerald Schwartz’s major charitable initiative in the country, HESEG, and negotiates private business transactions directly on behalf of Schwartz. He is Gerald’s proxy. In this instance, the Schwartz Foundation essentially paid itself using Canada-Israel as a direct flow-through.
Why this is illegal should be obvious. The CRA requires charities to remain arm’s length from major contributors; donors who provide more than 50% of a charity’s revenue. The Schwartz Foundation provided 85% of Canada-Israel’s revenue. Bushinsky is both a director on the board and a Vice-President, a special designation superseded on the board only by Schwartz and Reisman themselves. A charity cannot be arm’s length from a major contributor when it is deploying key directors from the major contributor’s board as intermediaries on large payments representing no less than 12% of a charity’s revenue total across its entire existence.
(iv) Rerouting is a serious issue with Canada-Israel’s intermediaries. Of note here is the Schusterman Foundation-Israel which was paid $232,000 in fiscal 2013 and the aforementioned Aviv Bushinsky. Schusterman Foundation-Israel is the Israeli-based philanthropic arm of an American private foundation known as the Charles and Lynn Schusterman Foundation. Essentially, Canada-Israel is stating that they deployed a private foundation as an intermediary. This is impossible, private foundations disburse funds to non-profit organizations. They do not in normal circumstances complete charitable activities.
This is confirmed by the financial returns from the Schusterman — Foundation Israel from the Israeli tax authorities. The returns must be translated to understand completely and should be by any source verifying these claims. On page 5 of the 2013 Financial Statements is the income statement for both the 2013 and 2012 fiscal years, which covers the time period for Canada-Israel’s 2013 fiscal year (year-end June 30th). The income statement states revenue and expenses in both American dollars and shekels. The revenue figure from fiscal 2013, $10,113,609 and 2012, $7,914,579 is almost entirely contributed from מקרן שוסטרמן — ארה”ב. This translates into Schusterman Foundation — USA. There is only $15,831 in revenue from any other source. The Canada-Israel Education Foundation’s payment was not included in the entity’s tax returns.
There was no trace of the Canada-Israel Education Foundation on any of the financial data reviewed from the relevant time period. Nor was the Canada-Israel Education Foundation mentioned in the 2012 Verbal Report, which was also reviewed.
The Israeli extension of the Schusterman Foundation is, in practice, a legal flow-through. Here’s how this particular arrangement works: The American Schusterman Foundation transfers millions as SFI grants to the Schusterman Foundation- Israel each fiscal year. These grants are then almost entirely re-disbursed to approximately (the number varies) 15–20 charitable organizations in Israel.
The organizations paid by Schusterman Foundation — Israel would have the capacity to act as an intermediary. Schusterman Foundation — Israel does not. This means sufficient direction and control could never be maintained because a flow-through doesn’t complete activities beyond administrative support. It forwards donations to third-party organizations.
This is confirmed by the 2014 Literal Report for the Schusterman Foundation — Israel which delineates expenses between grants and a smaller value for a tracking system that the foundation uses to assess how well the grant has been used by the supported organization (please see Literal Report 2014 Page 1, not available for 2013).
This arrangement was further confirmed on the tax returns from the American Charles and Lynn Schusterman Foundation which is required by the IRS to provide detailed information on its relationship with Schusterman — Israel, including a complete trace of its funds to the third-party charities and organizations ultimately receiving funds.
A diagram may be of assistance here.
The IRS tax returns for the U.S.-based Schusterman Foundation are instructive. As mentioned, the full supported organization list from Schusterman Foundation-Israel was required as an attachment. So was a letter from the Israeli non-profit’s Managing Director with an important admission about the flow through’s operations. Though the Schusterman Foundation’s U.S. tax returns only list grants distributed by Schusterman Foundation-Israel exclusively using Schusterman Foundation funds, the letter acknowledges that the flow-through could receive donations or grants from other unrelated U.S. private foundations, though in practice that has not occurred according to the revenue figure on the financial reports reviewed. The flow-through would then distribute these funds to organizations on behalf of the separate private foundation.
Given the author’s lack of knowledge on Israeli tax law, it may be possible that the Schusterman Foundation — Israel provided flow through services to Canada-Israel that were not required to be stated on their financial statements. However, that means that Schusterman Foundation — Israel did not provide legal intermediary services to Canada-Israel. They just passed the payments along to a third-party donee. Those are the only options for what happened here: either the intermediary payment never occurred as stated on Canada-Israel’s T3010 and the money disappeared, or the payment was passed off to an unknown third-party using legal loopholes in Israeli tax law to conceal its true destination. Sufficient direction and control was not maintained in either case beyond a shadow of a doubt.
As a brief aside, the author believes this is why the perpetrators chose the name they did for the charity. It was named it as if it were a private foundation — the Canada-Israel Education Foundation-and not a charitable organization. These are not the same type of registered charities; charitable organizations undertake charitable activities whereas, in most cases, private foundations only provide financial support to charitable organizations. This appears to be a trick deployed by Canada-Israel’s directors to fool the operators of these legal flow-throughs. A misdirection to acquire access.
As mentioned, a Schwartz Foundation director and compensated Gerald Schwartz employee, Aviv Bushinsky, was also noted among the intermediaries. A trusted Schwartz consigliere, Bushinsky could potentially reroute funds just like the Schusterman Foundation. It would be almost impossible to trace, which is why deploying a director from a major contributor as an agent outside Canada is illegal.
Interestingly, this obfuscation tactic is common in a different type of illegal practice — money laundering. The diagram below shows just how byzantine this rerouting process makes this transaction trail once one realizes that Canada-Israel was essentially just rerouting Gerald Schwartz’s funds. The perpetrators appear to be attempting to conceal the ultimate destination by making donations into organizations or individuals who will pass on the funds either knowingly or unwittingly. Not surprisingly, the destination is one of the other intermediaries. The reason it was not paid directly has to do with attention. They just didn’t want to draw too much of it, in case an auditor came stumbling through the door while Canada-Israel was active. So, some payments were split off and rerouted.
Consider this a preview of what’s to come.
(v) Sourasky Medical Center. Another intermediary listed alongside Bushinsky in fiscal 2015 was a hospital foundation for the Sourasky Medical Center, Israel’s largest urgent care facility. A hospital foundation is a type of entity that also acts as a flow-through, similar to Schusterman-Israel.
The CEO of the hospital was kind enough to respond to a request for information regarding the foundation and confirmed via email that all funds received are used only for the hospital’s activities. His term was a “1:1” link, meaning every dollar that is donated to the Association of Friends of the Sourasky Medical Center is transferred to the hospital. This is a flow-through solely and only for the hospital’s activities. He was very adamant in his email response and CC’d the foundation’s CEO in his reply to assure he was accurate. The Association of Friends of the Sourasky Medical Center does not have the capacity to act as an intermediary and legally could not partake in Canada-Israel’s activities even if it had that capacity. Canada-Israel, once again, violated the CRA’s “Own Activities” Test.
(vi) The Lawfare Project (“Lawfare”) is a New York City, NY, USA charitable organization registered in the United States. According to its website,
We are a global network of legal professionals that contribute our skills, time and expertise to defending the civil and human rights of the Jewish people and pro-Israel community, and fighting discrimination wherever we see it.
In particular, the organization is dedicated to fighting lawfare, which it defines on its website as,
The Lawfare Project produces research that educates policymakers about the threat of lawfare — the abuse of the law as a weapon of war against western democracies
The Lawfare Project was contacted multiple times regarding the intermediary payments. Brooke Goldstein, the founder of the Lawfare Project, did respond to general inquiries but refused to answer any direct inquiry into the intermediary payment or the Lawfare Project’s relationship to Canada-Israel. Therefore, the analysis of the agency payments was completed using the i990 Charitable Tax Returns submitted by the Lawfare Project to the Internal Revenue Service (IRS) and the organization’s public disclosures through their website.
The Lawfare Project was paid on individual T3010 lines by Canada-Israel in fiscal 2014 for $23,935, and 2016 for $23,611, and on a combined line in fiscal 2015 with the Friends of Israel Initiative for $256,206. Given the size of the additional Friends of Israel Initiative payments relative to the tiny payments to the Lawfare Project, it is reasonable to assume that the vast majority of the funds on the combined line were actually paid to the Friends of Israel Initiative.
According to the Lawfare Project’s i990 tax returns the vast majority of their funding was earned as unencumbered contributions to the charity between fiscal 2014 to fiscal 2016 — $666,013, $345,868, and $1,027,751 respectively. There is also a substantive amount of revenue earned from program services during the same time period; $27,374 in fiscal 2014, $24,227 in fiscal 2015, and $4,660 in fiscal 2016. All other revenue sources listed on the i990 Charitable Organization tax returns are inconsequential given the size of the intermediary payments at issue.
If Lawfare declared the payments from Canada-Israel as unencumbered donations, where the vast bulk of revenue was declared on the tax returns, then, once again, Canada-Israel failed to maintain sufficient direction and control over its resources. The only alternative would have the Canada-Israel payments listed in the Program Services lines of the i990 tax returns. Unfortunately, Program Services Revenue is also inappropriate for an intermediary payment. According to IRS guidance, program services revenue is declarable only where the service performed “furthers the organization’s exempt purpose.” Lawfare lists its program service accomplishments on its i990 tax returns,
To raise awareness about the phenomenon and specific instances of Lawfare, assuming the subject matter received the credibility and immediacy it warrants 2. To facilitate legal and non-legal responses to the perversion and misapplication of international and National Human Rights Law 3. To identify potential lawfare threats and mobilize human and institutional resources to combat them 4. To bring diverse and interested parties together in a common forum to discuss the phenomenon.
This charitable purpose in no way aligns with the charitable purpose — educating on the historical and contemporary dimension of the Canada and Israel bilateral relationship — of Canada-Israel. More importantly, the CRA in the recently publicly released Beth Oloth audit clearly states that “combatting Lawfare” is not a valid charitable purpose for a Canadian charity.
Therefore, unless the tax returns from the Lawfare Project have been incorrectly filed, there appears to be another piece of evidence that Canada-Israel did not deploy an intermediary in furtherance of its charitable purpose and instead used the intermediary for a purpose that was not charitable as defined by the CRA.
The Lawfare Project’s tax returns were prepared by CPA Nancy Kelly from Kelly and Associates, a Boston accounting firm. Like the Friends of Israel, this means a certified public accountant has verified that all intermediary payments made by Canada-Israel did not maintain sufficient direction and control across multiple fiscal years.
(viii) Another problem Canada-Israel suffers from is listing organizations that do not exist as intermediaries, but are misprints. One such example is Menifa-Manof Lachaim in fiscal 2015. Menifa-Manof Lachaim does not exist. But a charity named Menifa does.
Menifa is a Jerusalem-based non-profit organization that has established learning centers across Israel working in conjunction with the Israeli Ministry of Education to prevent disadvantaged teenagers from dropping out of high school.
During the fiscal year where the intermediary payment is listed, Menifa was running a donation drive in conjunction with the Ministry of Education called L’Chaim. This donation drive involved sponsoring a disadvantaged Israeli youth for entrance into one of Menifa’s Learning Centers. The style of entrance for the intermediary payment on the T3010, specifically noting the L’Chaim donation drive, legally means that Canada-Israel deployed not an organization, but the donation drive as an intermediary. A donation campaign is not a valid intermediary. This is a donation to sponsor a disadvantaged Israeli youth. Again, sufficient direction and control were not maintained.
(vii) The Committee for Shomron Residents is identified as a paid intermediary of Canada-Israel in fiscal 2013. This is in reality the Shomron Resident’s Committee, the only organization in Israel carrying this name, for reasons that will shortly become obvious.
A report was obtained from Molad, the Center for the Renewal of Israeli Democracy, on this organization. According to Molad, the Shomron Resident’s Committee is a “political arm” for politicians in the disputed West Bank territory engaged in “Price Tag” terrorism against Israeli Defense Forces. If the allegations in this report from Molad are correct, the use of this intermediary violates Canada’s international obligations irrespective of whether sufficient direction and control were maintained by Canada-Israel.
According to the Center for the Renewal of Israeli Democracy, Gershon Mesika recently became a state witness in a vast corruption trial. At issue at trial was the transfer of money to the Yisrael Beitenu party in exchange for receiving state funding. Mesika’s deputy and acting head of the Shomron Council, Yossi Dagan, also helped found the committee and acted as its spokesperson. His home address at the settlement of Shavey Shomeron is still registered as the official mailing address for the organization.
The report prepared by the Center for the Renewal of Israeli Democracy presents damning evidence for the following two key findings,
The Shomron and Binyamin Residents Committees…first developed the “Price Tag” policy. Their functionaries call for illegal action to delay or prevent security forces from evacuating illegal settlement structures in the West Bank. These nonprofits were formed in order to act in ways that the official regional councils cannot. In a series of publications disseminated among right-wing activists, they called on their communities to carry out “Price Tag” acts and various illegal activities, including rioting and erecting new outposts, in order to deter the IDF from evacuation attempts. They also commended acts such as burning fields and other property and injuring Palestinian civilians. Urging citizens to break the law and encouraging violence constitutes incitement, which is considered a criminal offense under penal law.
And,
The Shomron Committee’s work plan — one of the documents first exposed here — calls on supporters to riot and block roads, attaching maps with detailed directions to locations that will guarantee maximum disturbance of security forces’ work. Disseminating these maps allegedly constitutes accessorial liability
Though evidence has been produced to buttress these allegations, they are, to this date, still allegations. If proven true, obviously promoting attacks against Israeli Defence Forces in Palestinian territories is not a legitimate charitable activity for a Canadian charity to be involved in. Given its public activities, it is therefore very difficult to understand in what capacity the Shomron Committee could have been deployed in furtherance of Canada-Israel’s charitable purpose — Israeli Canadian bilateral relations.
More importantly, the Shomron Committee is active only in the disputed West Bank territories. The courts have held that an organization is not charitable in law if its activities are contrary to public policy. This is not a valid intermediary.
Relevant to Canada-Israel’s deployment of the Shomron Committee as an intermediary is Global Affairs Canada’s official policy entitled “Canadian Policy on Key Issues in the Israeli-Palestinian Conflict”. In part, it reads,
Canada’s policy on Occupied Territories and Settlements
Canada does not recognize permanent Israeli control over territories occupied in 1967 [including the West Bank]. The Fourth Geneva Convention applies in the occupied territories and establishes Israel’s obligations as an occupying power, in particular with respect to the humane treatment of the inhabitants of the occupied territories. As referred to in UN Security Council Resolutions 446 and 465, Israeli settlements in the occupied territories are a violation of the Fourth Geneva Convention. The settlements also constitute a serious obstacle to achieving a comprehensive, just, and last peace.
Even if direction and control had been maintained by Canada-Israel over the Shomron Committee, Canada-Israel’s use of it would serve to encourage and enhance the permanency of the settlements and therefore be contrary to Canada’s public policy on this issue.
A second issue with this intermediary is the absence of any declared political activities on the T3010 returns of Canada-Israel. It is very difficult to understand how a Canadian charity could use an intermediary that was founded ostensibly an “unofficial political arm” for controversial politicians in furtherance of charitable purposes that were not political.
If the reader requires more evidence from additional intermediaries they are directed to the supplement. As mentioned, the T3010 Charitable Information Returns were designed for one agent or intermediary to be entered per T3010 line. Canada-Israel shoveled their seventeen intermediaries into only twelve lines, listing as many as five per entry.
This would appear another attempt at obfuscation, a way of hiding how much was paid to whom. It didn’t work. It was, instead, a gift for the analysis. Of the $1.76 million in traceable payments paid to third-party intermediaries strong evidence has now already been presented that sufficient direction and control were not maintained over a whopping 90 percent of the dollar value per entry line, including every case where a single intermediary was listed on a line.
Gerry’s Game
Of the $2.63 million in total contributions obtained by Canada-Israel used to make these illegal foreign expenditures, $2.24 million — 85 percent of total revenue — was traced directly to a series of donations from the Gerald Schwartz and Heather Reisman Charitable Foundation (“Schwartz Foundation”), chaired by billionaire private equity tycoon Gerald Schwartz alongside his wife, Chapters/Indigo CEO Heather Reisman who is the private foundation’s President. The donations were listed on the Schwartz Foundation’s 2010 to 2016 T1236 Qualified Donee Worksheets.
All evidence indicates that the Schwartz Foundation dominated Canada-Israel, making the first and last donations into the conduit and dwarfed total contributions from any other individual or entity. The Schwartz Foundation donations were so overwhelming that in fact of law they were technically illegal until at least mid-2013 when amendments to the Income Tax Act (“ITA”) were forced through by the Harper Government. Beyond this point, Schwartz was still a controlling influence on the charity which violated te CRA’s arm’s length relationship with donors.
None of this is surprising. CIJA and its CEO Shimon Fogel aren’t independent of Gerald Schwartz. In some ways, CIJA is just Gerald Schwartz and his conspirators wearing different clothes. Staunch lifelong Zionists, Schwartz Foundation Chairman Gerald Schwartz, and President Heather Reisman co-founded a four-man informal group in the spring of 2002 (often misreported as the fall of 2002) with the goal of reforming Jewish advocacy in Canada. They called it the “Israel Emergency Cabinet.” It’s well represented at the Schwartz Foundation; one of its only two other founding members, Brent Belzberg, is also a director at the private foundation. The Zionist quartet recruited others, including Howard Sokolowski and Israel Asper. Together, the Emergency Cabinet used their combined financial clout to lead a substantive reform effort of Canadian Jewish advocacy. Shimon Fogel directly participated and championed the project, contributing his Shared Value Policy to the effort. CIJA was the result. By 2011, CIJA had absorbed both of the historic advocacy groups on behalf of Canadian Jews; the Canadian Jewish Congress which handled domestic advocacy; and the Canada-Israel Committee which was responsible for Israeli lobbying. All that remains today of Canada’s historic Jewish champions is Gerry’s monolith.
Schwartz Foundation remains very substantive financial supporters of the Jewish Federations which provide all funding for CIJA. Millions are contributed every year. According to charitydata.ca, the Schwartz Foundation made the second-largest donation by any private donor to the UJA of Greater Toronto in 2014, ninth-largest in 2015, and second-largest in 2016. The Schwartz Foundation is one of very few consistent major supporters at the top of the list each and every year. They are dominant contributors.
If that was Schwartz’s single connection to the conduit’s directors, it would be substantive. It is only the tip of the iceberg. In fact, the President of Canada-Israel, Moshe Ronen, is directly employed by Gerald Schwartz, organizing the Canadian side of his Israeli activities. The Jerusalem Post gave the most befitting description of Schwartz’ use for Ronen in a 2006 profile,
For the past several years, Ronen has quietly brought Canada’s power elite to Israel, believing that the best way to understand Israel is to see the country itself. Schwartz participated in one such mission in June 2004, and was followed by Reisman six months later. Since then, boosting Ronen’s organized trips has become a major focus for Schwartz and Reisman. Ronen has become the managing director of the couple’s burgeoning Israeli affairs office in Toronto, while Aviv Bushinsky, a former chief of staff in the office of Binyamin Netanyahu, manages their offices in Tel Aviv.
Aviv Bushinsky, mentioned in the above quote, is a director and Vice-President under Schwartz and Reisman at the Schwartz Foundation. A former Chief of Staff to current Israeli Prime Minister Benjamin Netanyahu, Bushinsky is of mixed-use to Schwartz, also handling major business transactions in Israel on his behalf and, as earlier noted, acts on behalf of Gerald’s personal charity HESEG. It must be stressed that Bushinsky himself is listed as an agent on the foreign activities for Canada-Israel in 2015, receiving a portion of an intermediary payment for over $327,000.
Ronen is a key personal adviser to Schwartz. He also briefly sat on the board of directors at the Schwartz Foundation and acted as a Vice-President, just like his counterpart Bushinsky, between December 2007 and January 2008. It should be noted here that Canada-Israel’s corporate shell was formed less than a year later, December 2008.
Ronen’s employment with Schwartz helps explain Fogel’s participation in the conspiracy. Ronen was one of Schwartz’s representatives on the Restructuring Committee that elected Shimon Fogel as CEO of CIJA on December 8th, 2010, just months after Canada-Israel became active as a charity. Fogel’s previous employer, the Canada-Israel Committee, was in the process of being absorbed into CIJA and shut down right when Canada-Israel became active. Heavy job losses soon followed. He was likely involved in Canada-Israel because he was trying to keep his job.
There is also a far more direct connection in July 2009 when the application was filed. At that time, Ronen was the Chairman of the Canada-Israel Committee, still in existence. Fogel was that entities CEO. They are two of the three founding directors at the nascent charity listed when it gained charitable status in July 2010 and two of four corporate directors. The Application asks whether 50% or more of the directors at the applying charity are arm’s length. Employment relationships are directly referenced in the application as creating a potential conflict. An organization’s Chairman clearly has influence over the employment and compensation of the same organization’s CEO. This moves Ronen and Fogel within arm’s length and violated CRA rules when the Application was filed.
Where information on additional contributors to Canada-Israel could be obtained by the investigator conducting the audit of the charity, virtually all were traceable to close personal relationships with Gerald Schwartz or are major contributors to CIJA. These include the private foundations of Conservative Party Canadian Senator Linda Frum and Howard Sokolowski, who sits on the board of directors of Mount Sinai Hospital with Gerald Schwartz, and the private foundation of the late Israel Asper, Schwartz’ long-time business partner and mentor. The 2016 donation to Canada-Israel from the Friedberg Foundation, a major supporter of Israeli lobbying in Canada, was marked as “Canada-Israel Education Foundation (CIJA)” on that foundation’s T1236 Program Worksheet despite Canada-Israel ostensibly having no legal relationship with the Israeli lobby and indicated as such on the application. Canada-Israel also received a contribution in 2013 from the UJA Federation, the umbrella organization which funds CIJA itself. Numerous additional relationships with CIJA were found among Canada-Israel’s intermediary payments outlined in the supplemental documentation. This appears to potentially yet another falsehood.
The Case Against Schwartz
I am personally of the opinion that Gerald Schwartz is so close to the directors of Canada-Israel to be indistinguishable, and should therefore be charged as a Joint Defendant. However, a case against Gerald Schwartz relies on common intent under s. 21(2) with the directors of the Canada-Israel Education Foundation is a plausible path. s. 21(2) states,
(2) Where two or more persons form an intention in common to carry out an unlawful purpose and to assist each other therein and any one of them, in carrying out the common purpose, commits an offence, each of them who knew or ought to have known that the commission of the offence would be a probable consequence of carrying out the common purpose is a party to that offence.
Let’s move “ought to have known” in the above definition out of the way. Gerald Schwartz is professionally trained as a Canadian tax attorney and has a Harvard MBA. He is deeply involved in charitable activities, including both founding a multi-million dollar Canadian charity known as HESEG and sitting on the board of directors of multiple charitable organizations and private foundations. Mr. Schwartz is a billionaire financier and founder of the largest private equity company in Canada. He has been involved in complex financial transactions for decades. He is highly familiar with his obligations under the Income Tax Act. There are very few individuals with more knowledge of or resources for his legal obligations in Canadian history than Gerald Schwartz.
Despite Canada-Israel’s clear violations of the Income Tax Act, the Schwartz Foundation, controlled by Gerald Schwartz as per its own bylaws, provided 85% of this charity’s revenue — over $2.24 million in total — with consistent and dominating support across no less than seven fiscal years using his private foundation (2010–2016). This was confirmed by the Schwartz Foundation’s own T1236 Qualified Donee Worksheets submitted to the CRA.
The Schwartz Foundation was the only known contributor to provide consistent support across all fiscal years of Canada-Israel’s operations. He, using his private foundation, was the only large donor of any kind. The President of the charity was Moshe Ronen, a former director at the Schwartz Foundation and Schwartz’s compensated advisor on charitable affairs. It is unreasonable given this relationship to assert that Schwartz did not know exactly what was going on in the charity. Even more so considering another Schwartz employee and Schwartz Foundation director, Aviv Bushinsky, was actually deployed as an intermediary in a payment that was found to not maintain sufficient direction control in two separate ways including Bushinsky himself.
In fact, it is reasonable to assert that after considering Gerald Schwartz’s overwhelming financial support and compensated advisors Bushinsky and Ronen's role in the charity that the Canada-Israel Education Foundation could not have existed at all without him. It’s not a charity. It is an extension of the Schwartz Foundation and thus Gerald Schwartz himself.
Importantly, and as will be discussed in detail in the next section, Canada-Israel failed to file its 2017 T3010 Charitable Information Return (for year-end June 30th, 2017) but remained active until the CRA revoked charitable status on November 24th, 2018. Yet, despite consistently supporting Canada-Israel across the previous seven fiscal years, the Schwartz Foundation’s donations stopped at the end of fiscal 2016 (November 30th, 2016) right before the failure to file internally occurred at Canada-Israel. But Canada-Israel was, at least outwardly, still active. Its website was the exact same blank “Under Construction” page it always ways. It’s operations, non-existent as they were, had not appreciably changed. Therefore, one can easily ascertain from the facts that Gerald Schwartz must have had detailed knowledge that Canada-Israel’s charitable status was going to be revoked before the failure to file occurred in 2017 and adjusted his private foundation’s behavior. He stopped donating. Which, of course, provides yet more (as if there was not enough) evidence the billionaire was never arm’s length with Canada-Israel’s directors at all and participated directly in the conspiracy.
The author cannot see how anyone would doubt the claim at this point. However, if any doubt remains, please see the following supplement regarding misstatements on the T3010 at Canada-Israel on declarations of their revenue between individual donors and private foundations. It will show the Schwartz Foundation acting in concert with the directors at Canada-Israel in how donations are structured by Schwartz and subsequently categorized by Canada-Israel.
Please see Supplement: The False Returns
Even if the author’s argument on common intention is not accepted, somehow, in the author’s opinion Schwartz should still be a party to the offense using s. 21 (1)(b) for “does or omits to do anything for the purpose of aiding any person to commit it” largely for the reasons already discussed.
This is open and shut. I’ve got Gerald Schwartz dead cold.
The real question isn’t whether Criminal Fraud occurred. It’s obvious. The real question is this: why risk it? Schwartz is among Canada’s wealthiest individuals and the amount involved is but a pittance for a man of his substantial means. Nor is he a reckless or inconsiderate man. He knew full well that if the truth of Canada-Israel was discovered, however unlikely, his reputation and freedom could be at risk. His conduct considered in a vacuum makes little sense.
Unless we flip the script. Canada-Israel, tiny and unassuming, was lost among 84,000 peer charities. It had no employees and its directors disavow association with it. Today, it doesn’t even exist. Charitable status has been revoked. Identifying this defunct charity was like finding a needle in a stack of needles. A miracle. It should have disappeared forever.
Because Canada-Israel isn’t really a charity. It’s the perfect format for something else. The legal construct that was chosen for one stage in the process of money laundering. A trail that leads to Stephen Harper.
