Canadian law procedures

I'm not a legal expert, but I can try to help... I'm not sure on the details of the question, though. How is the will worded? Did he leave her 'the company and all its profits," in which case she'd be shit out of luck, or '$5 million from my estate as well as controlling interest in Nonexistent Corp," in which case the bequests would be separate items.

Any proceeds of crime would go for reparations to the victims based on a court ruling, iirc, and anything he gained through provably illegal means (pyramid scheme, etc) would end up tied up int he legal system for years before she saw any of it, but someone would have to be aware of the crimes first.

I have to admit to having no idea what you're trying to describe, but any competently drawn will has a "rest and remainder" clause, where anything that is not specifically granted to someone goes into the rest and remainder which goes to a specific person or entity. That would appear to cover this situation.

Best of luck,

Jim Clark-Dawe

I am not a business lawyer, but in the U.S.A. the situation could exist and would be handled similarly, I think.
Are you saying that the late husband did not have a business corporation, or had the corporation papers been so mishandled that the corporation was never registered? Those are very different situations. If there was no business, then there wouldn't have been anything to inherit. If there was a business that the husband had call Something Corporation for several years and had kept books and filed taxes under that name, then the matter of the missing papers probably could be corrected retrospectively. Or, if the corporation conldn't be created, then it would be treated as a sole propreitorship or partnership, which would make the matter of inheritance easier, especially if there were a "rest and remainder" clause.

So what is the situation?

Can you perhaps rephrase the question so the situation can be understood?

I think it would hinge on whether the money was illegally obtained and whether or not there's an investigation/proof it was illegally obtained.

Without knowledge of the source of the money there might be an investigation and they might look into whether she owes taxes on the money.

How could he pay his taxes for a company that doesn't exist? The government has records of these things. I'm not sure if your scenario is fleshed-out enough yet.

stormowl7 said:

sorry I wasn't too clear about this, I'll try and give some backstory to make more sense! FYI, it's a Paranormal Mystery, but I wanted some of the 'real world' aspects to make sense


Celina has a husband, Thomas, who created a company and has been working there for 5 years. He makes plenty of money, Celina doesn't have to work.

Thomas is murdered. Celina finds out his company never existed, but no one knows where all the money is coming from.

Now, my question is, if Thomas, in his will, left Celina all his money, can she still have it even though they now know the company never existed but they don't know where the money came from? Would there have to be an investigation, and if so, who would investigate and how long might it take?

Thank you!

Click to expand...

If they can prove that the money was obtained illegally, then it can be taken. But that would mean that some officials would have to learn that the company from which he purported to receive the money did not exist. If no one told them, then it would take a long time for the matter to be noticed. Had the character been paying income taxes?

Is this forensic accounting story?

Someone should tell Celine to move to another country, preferably one without a tax or extradition treaty with Canada.

Canada Revenue would investigate, I think. Some or all of his assets would probably be frozen at the time of his death, pending distribution of his estate, except for any accounts on which she was a signatory. (So if they had a joint banking account, that wouldn't be frozen automatically on his death.)

As far as inheritance laws go, that's provincial, not federal -- each province has its own regulations. For all of them, I think (not a lawyer!) a will leaving things to the legal spouse supercedes all other claims, unless there are kids who require provisions.

http://en.wikipedia.org/wiki/Inheritance_law_in_Canada

All debts owing are paid before anything gets distributed from the estate.

I THINK (not a lawyer!) that, if there's anything hinky suspected, it all gets frozen and goes to the RCMP for investigation in case of money laundering, etc. RCMP Proceeds of Crime Division: http://www.rcmp-grc.gc.ca/poc-pdc/index-eng.htm

I'm not sure exactly how one would go about proving that it wasn't illegal, if there's no paper trail.

If you need her to get the money, or at least some of it, I'd suggest giving them a joint account (maybe one she didn't know about? secret Swiss bank account in her name to be revealed in the event of his death?) that wouldn't get immediately frozen, so she can move the money somewhere else.

How does anyone find out the company never existed?

If the lawyer executing the will knew the company didn't exist and there was no above-board explanation as to where the money came from, they'd be obliged to report it. Otherwise, I can't see why anybody needs to know.

Do you want there to be an investigation or not? I mean the simple version is, the lawyer gives her access to the bank accounts, she gets everything, it's all smooth. Maybe the tax man will be curious at some point as to where the money came from, but without a tipoff, it's unlikely they'll notice (they didn't have the resources to randomly audit people like this in earlier times and Harper's cut funding significantly for just this kind of investigation). She'd eventually figure out the company was a fake, but why would she go shooting her mouth off? If you want an investigation, then make it obvious to the lawyer that the company didn't exist.

It all seems very strange. I live in BC and I've registered several companies, it's really easy, you can do it online in about 20 minutes and I think it was $35. With such a low bar, why wouldn't he at least create the company on paper? That would be a sticking point for me as a reader if there's no good explanation.

A friend of mine represented the wife of one of the largest bookies in Boston, MA in her divorce. Everyone knew what was going on, including the judge, although no one ever admitted to actually knowing what was going on. The numbers were made to work with some slights of hand.

First off I'm wondering why a corporation wasn't formed. As Drachen points out, easily done and gives you access into the banking system. Sixty payments without banking access is going to be difficult. Canadian banks are required to support suspicious activities and sixty payments over five years are going to be suspicious.

If you can get the transactions into the banking system, then you're not going to have problems with the court system. But the war on terrorism has created strong international banking regulations involved on tracing money. Since I have no idea where the money is coming from, I'm not sure where the difficulties arise.

Best of luck,

Jim Clark-Dawe

I think it would help us a lot if we knew what you wanted StormOwl. Do you want an investigation, do you want to avoid an investigation, do you want her in jail? What works for the story? All those scenarios are plausible, depending on how things were arranged and what she does about it.

You don't buy a building with cash. Canada requires a report being submitted for any cash transaction over $10,000 Canadian.

I take it you want this realistic. If so, you'll get to learn about smurfing money. In Europe, the US, Canada, Australia, and some other countries, inserting cash into the system has to be very carefully done. You've got two watch dogs -- banking and the taxman. You've got to keep them fooled.

So your office front has to actually do some work. The receptionist, who is not hired for his or her brains, will receive invoices from the demon, so that she sends out bills to fake addresses. Checks are then received for the invoices, and deposited in the bank in the normal course of business. The receptionist also pays the "bills" that occur in the running of the business. Sloppy paperwork is to be encouraged here. The less anyone can actually follow this paperwork the better off you are.

All this paperwork disguises the fact that there's nothing there. A tax man, looking at the books, will see a set of books that match what the tax returns say. He'll look to see whether there is income being hidden (there isn't -- over reporting is the trick here). When there's no sign that income isn't being hidden, then the tax man goes away happy.

(Laundering money is a pain in the butt.)

When the demon dies and the attorney shows up, he initially sees signs of a busy office, but we can now go several routes. For example, a professional like an accountant or a lawyer, upon dying, has a tendency to go out of business immediately. Other businesses can run forever without the boss.

If this is done right, it could just disappear. It could trigger an investigation. It's sort of up to you. Part of this would go into the preparation the demon put into this.

A computer program can be set up to generate the invoices and bills.

Best of luck,

Jim Clark-Dawe

I think pretty quickly she'd get all her assets frozen. The lawyer would be obliged to contact police and Revenue Canada and that's the first thing they'd do. She'd probably be allowed to remain in the house, drive the car etc, but they'd be pretty tight beyond that.

She would almost certainly be questioned very early in the process and probably repeatedly. They would certainly investigate her, but if there wasn't any evidence that she knew of illegal activity it probably wouldn't take long.

She would probably never gain access to the money, or at the very least it would be tied up legally for a very long time unless she hired some very good lawyers (hard to do when you don't have access to large amounts of money). Her own bank account would probably be frozen as well, but I think they'd allow her to withdraw a stipend until everything was sorted out.

Now it's the 1920s?

I think the bottom line is who you expect your readers to be, because there seems to be a lot of 'credibility stretching' here.

If you have a Canadian Lawyer friend, that may be your best bet around all this because it seems to me you're trying to build things the wrong way round.

You don't want her to get the money? Is that the bottom line? If it isn't, what is the purpose of this complicated set up? What is the mystery?

All the demons I know set up corporations for moving money around.

Even in the 1920's real estate would have been paid for with a check, unless it was a lot that sold for less than $100, but even then it would look strange for someone to carry that much cash. The reporting requirements were not strong then, but bankers don't thieves, and a banker would have bee suspicious of someone carrying the equivalent of $5000.

It would be easy to set it up so that she would get the money, and it could have been set up in the past, then that could be done. If you want her to have legal problems, then that would be easy to arrange also.

I am assuming your demon wants to keep this all quiet. Paying all cash doesn't keep things quiet. It never has and never will. Most businessmen don't deal with a lot of cash, but with credit instruments like checks and credit cards.

The manuscript I'm working on has, as one of the major issues, how does the protagonist get five million dollars back into the US without exciting anyone. It ain't easy. (If you want to read my manuscript to see how complicated it is, let me know.) You need to understand the Financial Action Task Force and how it effects moving money.

Here you want a continuous stream of cash entering the money system. This stuff is tracked by the government. It knows how much cash should be in an area. This is one of the ways in which counterfeiting is identified, as well as drug money.

So as Bufty suggests, how credible do you want to make this?

Banking secrecy is pretty much a thing of the past. But if I was your demon, I'd print up a ton of cash (millions) and go to a country on the FATF watch list such as North Korea (where there is still secrecy) and deposit the cash. Then all you have to do is figure out how to get into Canada.

But unless this is a big issue for your book, I'd slide this through and not explain it. Your not going to get someone knowledgeable to buy this without a lot of work, so why worry about readers like us?

Best of luck,

Jim Clark-Dawe
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stormowl7 said:

It's 2014, and I was just throwing a number out there in the sense that he bought it back in the 1920s since he's been 'alive' for quite some time.

It's for Adults, and no, I don't have any lawyer friends, that's why I came here on the board.

The bottom line is finding out little by little that her husband was hiding things from her and had lied for quite some time.



A few Beta Readers said that it was not believable and that I should work on getting the facts straight.

So I was thinking, from what was suggested here, of maybe just saying that the company disappeared after the husband died and that the secretary (the only employee there) disappeared as well or just doesn't know anything. From there, I could just make the lawyer dealing with the husband's will report that something is suspicious, and for the time being, MC can't get the money but she's not investigated either since she had nothing to do with the company. The story only spans over a little less than a month. Thoughts?

Click to expand...

It doesn't take much to give the impression that something is a business. The secretary could help but is not necessary. A file cabinet full of invoice copies and receipts and bank deposit slips that match each. The guy could have set himself as a consultant, a term that can cover anything from a sales coach to an adviser on business strategies or a mining engineer. If all of the paperwork balances and agrees with what was reported on income tax returns, then the matter might be dropped at that point, and the money released. If the investigator goees upstream and finds no record of any correspondence with the guy among the companies that he billed, then there would be trouble.

Or you could have him be a professional gambler. Casinos pay in check and EFT if the amount is large, but they will pay small winnings in cash.

Or he could have covered his tracks in the import-export business, which would entail having connections with many actual shippers and contracting with them to carry shipments. Some of that is still cash, but only very little anymore.

Having bought a lot in Toronto in the mid-1800's in cash would have been plausible, and he could have had a high quality building erected that he continued to use. Rents could be inflated as needed to cover the counterfeit. Having the property owned by a trust would hide, somewhat, the actual ownership, and it would allow the building to never be transferred.

For a company to "exist" in Canada he'll need a business license, some kind of WCB coverage (workers compensation board - a general disability policy publicly managed by the province they live in) and a GST number. Once he has these things, the company legally exists. And he'd need all of them in order to file taxes showing that he owned a company. I've done all this myself to set up my own sole-proprietorship company in BC.

So, if he's filing taxes the company, as a legal entity, exists.

If you want it to be some kind of shell company or front, that's a different statement.

If you want the company to be basically a money laundering operation for demon-generated revenue, what's stopping this company from actually existing? It can still have an office, a receptionist, an on-staff bookkeeper, etc. 3 to 5 employees in a light industrial park or trendy but sort of rundown downtown neighbourhood (those are almost always leased by the way, unless he owns the whole building and is renting out the rest of it). The complexity of actually having a legal company, with employees etc. seems a little more like there'd be some amount of mystery invovled in the finding out of revenue sources. The guy himself could make up the "clients", and being that he's the owner and only sales person, and all business activities take place elsewhere, there's no reason for any of the employees to question what kind of "consulting" he does....

If you want realism, you can't just oversimplify to the point of "the company doesn't really exist" and expect intelligent readers to buy it.

Also, I'm not sure about joint bank accounts not being frozen after a death. Assets like houses and cars would remain in her posession during probate, but joint accounts may not. Any accounts holding company money, since the company is in his name, would also be frozen during probate, regardless of who he was leaving it to. The executor of the estate may be able to access a small portion (since the executor gets a portion anyway) but unless the cash is in her name entirely, she's going to be broke for at least 6 months, up to 2 years, while the will is executed. My grandmother's estate was a handwritten will with only cash assets, and a small house, (easiest kind to deal with) and no one contesting anything, and it still took more than 6 months. A friend waited a year and a half for her inheritence from her father, a mechanic who rented in a trailer park.

What you want to do involves too many things that are contradictory. You want the demon to have money before he disappears without anyone questioning it and then have it unravel immediately after he dies. And then ignoring the inherent hurdles to cash these days.

King Neptune's idea of a gambler is about as good as it's going to get. Lots of cash can be laundered in legitimate gambling, and even more with illegal gambling. But if he's gambling to hide his cash, then he's filing income tax returns indicating gambling as a source of income.

Another solution would be for people to think he's involved in crime, such as prostitution, drugs, or protection. But in that case, he's going to have a front business, such as an antique store. Most criminals have a front business to explain their incomes and avoid the tax man.

I'd make his income a bit sleazy before he died, but that she doesn't check up on it before, and then when he dies, really start checking up on it. This makes your female lead a bit more credible, and makes it easier to thread a tale around his money. I'd still go with the gambling. It's a great way of burying cash and no one asks questions.

Best of luck,

Jim Clark-Dawe

Another solution just came to mind. If the guy doesn't have to stay in the area, then he could claim to be a mercenary leader with a company of mercenaries under him. He sells their services and gets paid in cash that he funnels through the official banks in a client's country and transfers the money to his accounts in Canada or somewhere else. Of course, he is no more a mercenary than he is a manufacturer's agent, but it would be difficult to trace the money.