CRA leadership knew of major gaps in fraud detection as agency paid out bogus refunds, records show [Video]

In early 2024, senior officials at the Canada Revenue Agency were so concerned it had wrongly authorized bogus refunds of tens of millions of dollars that they wrote confidential briefing notes stating that the agency was plagued by significant “gaps” in its ability to spot — and stop — scammers, records show.

The Fifth Estate/Radio-Canada has learned that the agency knew of “major risks” in its fraud detection systems, including one previously undisclosed scheme that led to a potential loss of $100 million in bogus payouts since last November.

According to sources, one of the most glaring weaknesses identified by senior managers was that imposters were able to pose as accountants or tax preparers and hack into taxpayer accounts.

“This impacts the agency’s ability to detect suspicious activity both proactively and in a timely manner, resulting in undetected fraud, extended unauthorized account access and/or changes to accounts,” said one internal memo written …