They settled in Victoria, purchased luxurious homes and became permanent residents — qualifying for Canadian health care and other social services.
But that also meant they would eventually have to start paying tax on their investment income from $25 million in offshore accounts.
Instead, in December 2001, Peter and his sons signed up for a massive offshore tax dodge designed and run by the Canadian accounting firm KPMG and paid virtually no income tax for more than a decade, according to documents filed in the Federal Court of Canada and the Tax Court of Canada.
Unreported documents obtained by the CBC’s The Fifth Estate and Radio-Canada’s Enquête show that even after it was discovered they were using KPMG’s offshore tax dodge, Peter Cooper and his sons continued using the scheme, which Canada Revenue Agency auditors had called a “sham” that involved “deception.”
The KPMG scheme involved setting up shell companies for Canadian multimillionaires and billionaires in the Isle of Man, a British crown dependency in the Irish Sea. A client would purport to give away their wealth to one of the shell companies and then get back regular tax-free “gifts” from income earned when the money was invested abroad.
Through their lawyer, the Cooper family declined to comment.
In 2015, Marshall Cooper said KPMG approached his family to sign up for the tax dodge, and that questions should be directed towards the accounting firm.
The scheme involved at least 25 well-heeled Canadians.
The Coopers are “just the tip of the iceberg,” said Dennis Howlett, the former head of Canadians for Tax Fairness, a group that advocates against offshore tax secrecy.
The House of Commons finance committee rebooted a long-dormant probe into Isle of Man shell companies last month after CBC/Radio-Canada reported on suspicious money transfers unrelated to the Coopers.
During hearings into the KPMG Isle of Man companies back in 2016, the Liberal chair of the finance committee abruptly blocked testimony — before MPs were able to know how much money the government might have lost in revenue or the names of all the KPMG clients behind those shell companies.
In the case of Peter Cooper, who died in 2016, documents filed in Federal Court and Tax Court state he had access to a fortune of more than $25 million offshore and owned a $4-million mansion across the street from the Royal Victoria Yacht Club.
Yet the CRA says in court filings that he paid little or no income tax between 1999 and 2010.
In 2001, Cooper received a $250 cheque from a federal government program to help low-income Canadians with home heating costs. The documents state that every year from 1999 to 2010, both he and his wife claimed and received GST rebate payments — a tax credit for individuals and families with low or modest incomes.
His sons also benefited from government tax credits, court records show. Richard Cooper claimed a $9,000 home renovation tax credit in 2009 and Marshall Cooper paid $3,049 in total income taxes between 2002 and 2011, while receiving tax credits worth $5,420 over the same period.
At the same time, the Coopers were secretly receiving what added up to millions of dollars in what KPMG had called tax free “gifts” from their offshore investments from their family fortune.
At some point, the CRA observed that Peter Cooper’s “lifestyle was not supported by the income he reported,” the agency says in its court filings.
It all seemed to come to an abrupt end for KPMG and the Coopers when CRA auditors discovered the confidential Isle of Man scheme in 2010.
In 2012, aside from having to pay back taxes and interest, the Coopers were assessed nearly $4 million in penalties for what the CRA termed “gross negligence.” The agency stated the KPMG scheme was a “sham” and that “deception was part of the plan” to not declare income in Canada and instead label the money as tax-free gifts.
But despite the CRA unearthing the KPMG offshore scheme, the Cooper family continued to use it for several years without tax officials realizing, the documents filed in Federal Court show.