by Glenn Taylor
Northern News Services

NNSL (Aug 15/97) - The former chair and the former vice-president of finance of the Inuvialuit Regional Corporation are under investigation by the Department of National Revenue for alleged tax evasion.

Former chair Roger Gruben and Preston Maddin, former finance vice-president, failed to report hundreds of thousands of dollars they received during a controversial bonus-incentive plan between 1993 and 1995, according to Revenue Canada investigators.

Gruben received about $322,000 in bonus payments between September 1993 and February 22, 1995. Only about $85,000 of that was reported and taxed, according to Revenue Canada investigators. Revenue says Gruben failed to report about $299,000 in income between 1993 and 1995, and owes federal taxes totalling about $69,000.

Maddin was vice-president of finance from 1992 to 1995, during which time he received about $346,000 in cash bonuses. Revenue says he failed to report $220,649 in income during this time, and is believed to owe about $27,000 in federal taxes.

The public learned in June 1995 that, between 1993 and 1995, Gruben and an inner circle of directors had been quietly awarding themselves cash bonuses as a reward for what they later argued was a job well done.

Revenue Canada investigators determined that "the (IRC) and its related entities had developed and implemented a program of bonus-performance incentive payments for the staff, management and working directors of the (IRC) in early 1993 which was limited to those individuals who were high enough in the (IRC) organization to be able to affect policy or implement it directly," according to information gathered to obtain a search warrant.

Maddin was responsible for the development and implementation of the bonus plan, according to Revenue Canada investigators. Other directors who benefitted from the plan included Knute Hansen ($265,000), Gilbert Thrasher ($217,000), Vince Teddy ($35,000), Roger Kuptana ($25,000) and Fred Bennett ($15,000.)

In all, bonus incentive payments totalled more than $1.6 million, and were paid to about 25 different employees between 1993 and 1995.

A year later, the IRC reported an $18.5-million loss for fiscal year 1995.

Search warrants were carried out at Gruben's Tuk house and his Inuvik income tax adviser's office on June 17. Items including income and financial statements, banking records, and minutes of meetings where bonuses were discussed and approved, were seized. Maddin's Calgary home was also searched June 17 and records taken.

Neither man is charged with any offences yet, while investigators review the case. But both men may be facing a variety of charges, including making false or deceptive statements on their tax returns, and understating their taxable incomes.

Gruben allegedly failed to report income totalling $180,500 for the 1993 and 1994 taxation years and failed to file a 1995 income tax statement for income, believed at this time to be $115,953.

Maddin is being investigated for making false and deceptive claims on his 1993-95 income tax forms.