In the Tax Authorities Crosshairs: More than 0M in Hidden Earnings for a Former Cirque du Soleil Vice President

In the Tax Authorities Crosshairs: More than $100M in Hidden Earnings for a Former Cirque du Soleil Vice President

The Canada Revenue Agency (CRA) is hot on the heels of a former partner of star director Franco Dragone, who is suspected of concealing more than $100 million in money laundering and international tax evasion.

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Federal tax authorities estimate that Louis Parenteau owes him between $24.7 million and $56.5 million, according to a court filing consulted by our Bureau of Investigation.

The CRA filed a lawsuit against Parenteau in mid-July to try to lift the corporate veil and get its hands on high-value assets that were transferred to trust companies, including three properties in Quebec (see other text).

Parenteau, a qualified attorney with the Quebec Bar, was vice president of legal affairs at Cirque du Soleil in the 1990s before taking over the business from former circus star director Franco Dragone.

Trouble with the Belgian judiciary

According to a case filed with the Supreme Court, Revenue Canada received information from Belgian authorities in connection with an investigation into “alleged money laundering and international tax evasion in which Parenteau and certain of his associates were involved”.

Dragone’s company offices in Belgium were raided in 2014 and Parenteau was interrogated in 2016. However, no charges were brought against the latter.

In the Treasury Officers crosshairs More than 100 million in

Franco Dragone
director

Our Bureau of Investigation had reported in 2020 that Belgian authorities had finally decided not to press charges against him because the suspected facts were too old.

According to the proceedings, Parenteau joined the Dragone Group in 2001 in exchange for a fee of US$1 million upon taking office and an annual salary of US$350,000.

However, after a dispute in 2008, a division of the Dragone group’s assets would have been decided, with the transfer of assets (money and licensing rights to shows) totaling more than $100 million to an island company that sells British Virgins connected were parent.

Parenteau would then have deposited $17 million worth of investments in the Virgin Islands into a personal account in Guernsey.

Monster notification of the investment

After an audit, Canada’s tax authority issued Parenteau tax returns “to tax income from the ending of her partnership with Dragone.”

Specifically, the CRA added an amount of $113.9 million to Parenteau’s 2013 reported income.

“Total, as determined by the Department of Appeals or the Tax Court of Canada […]the latter’s tax liability will range from $24.7 million to $56.5 million,” the tax agency claims.

In October 2021, Parenteau appealed the received orders to federal court.

Canada’s Internal Revenue Service believed that collection of the amounts could be at risk and requested the court to urgently seize certain assets related to Parenteau.

No payment received

In July, an order was issued authorizing the tax authorities to take collection measures.

The court issued a certificate stating that Parenteau owed the tax authorities $24.7 million.

Despite these steps, “no payment was received,” according to the Canada Revenue Agency.

THE CASE IN BRIEF

2001: Louis Parenteau, former vice president of Cirque du Soleil, takes over the management of the Dragone group.

2008: Louis Parenteau and Franco Dragone stop communicating after a dispute. A division of assets is agreed via an offshore company.

2013: Franco Dragone and Louis Parenteau are the subject of criminal investigations in Belgium, according to the Belgian newspaper Le Vif.

2015 : Land and assets related to Louis Parenteau are transferred to trusts.

2021: Canada’s Internal Revenue Service issues assessment notices against Louis Parenteau over hidden income estimated at more than $100 million.

Luxurious houses and treasure transferred to trusts

One of the properties sold by Louis Parenteau to Trusts at Lac-Brome in the Eastern Townships.

Photo Martin Chevalier

One of the properties sold by Louis Parenteau to Trusts at Lac-Brome in the Eastern Townships.

Louis Parenteau is said to have been selling two very valuable assets and three properties in Quebec to two trusts when he started feeling the heat, according to the Canadian Internal Revenue Commissioner’s complaint.

Two properties purchased in Lac-Brome, in Estrie, in 2009 and 2013 for more than $600,000 each have been sold, as has a home in Outremont valued at $1.7 million a year 2018

“Plaintiff alleges that these gifts were made to protect Parenteau’s assets from its creditors, particularly the tax authorities,” the CRA alleges in its filing.

According to the CRA, the trusts of which Parenteau is a beneficiary and a number company are nothing more than attorney alter egos.

In fact, in a Royal Bank document, Parenteau describes itself as the “owner” of the assets on behalf of the trusts, the tax authority points out.

Insolvent

The CRA alleges that Parenteau is now insolvent. “His current assets are not sufficient to settle his tax liability,” argues the tax authorities.

In the proceedings, the name of Hyman Jaimes Himan appears as trustee of the Trusts associated with Parenteau. He is a former partner at Ernst & Young in Montreal.

His name appeared on a list of 41 accused in Belgium, but Belgian prosecutors found there was no need for charges in his case.

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