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CINAR Documents Seized

Fraud troubles for CINAR Corp. increased as RCMP agents seized four boxes of the ARTHUR TV-series producers' tax documents. With a warrant in hand, a joint team from the RCMP (Royal Canadian Mounted Police) and provincial police searched the Old Montreal offices of the Société de développement des entreprises culturelles (Sodec) on the morning of Thursday, April 6, 2000. The search was part of an ongoing investigation launched by the RCMP on October 19, 1999 [AF 10/19/99] after a Bloc Québécois MP made tax fraud allegations in the House of Commons. The search warrant was necessary because provincial access-to-information laws prohibit Sodec from voluntarily handing over confidential fiscal data related to Revenue Quebec, said lead RCMP investigator Staff Sgt. Carrier. Sodec serves as an evaluator for tax credits, while Revenue Quebec distributes the funds. Sodec's federal counterpart, the Canadian Audio-Visual Certification Office, has not been searched by police but is co-operating with the RCMP. Allegedly, the kids' TV producer falsely obtained Canadian tax credits by putting the names of Canadians on scripts written by U.S. scribes. The Quebec tax credits are similar to federal credits, which grant increased funds based on the number of Quebec residents who work on a given production. One of the false names used was Erika Alexandre, a derivative of co-founders Micheline Charest and Ron Weinberg's children's names - Eric and Alexandre. The name was then registered with the local Société des auteurs et compositeurs dramatiques (SACD), the French-language scriptwriters' royalty agency, as a pseudonym of Hélène Charest, Micheline's sister, who isn't even a scriptwriter. In December 1999, SACD lawyers threatened legal action against Hélène Charest if she did not refund CA$980,000 with interest to SACD to recover royalties paid to her. CINAR has confirmed that such a sum was reimbursed to Hélène Charest but refused to give a reason. The SACD acted after a group of Quebec scriptwriters alleged that several scriptwriters, including Americans, signed away their right to royalties and that CINAR or personnel at CINAR received the royalties instead, using the name Erika Alexandre. CINAR also received subsidies from Telefilm Canada and the Canadian Television Fund, which have both frozen funds until CINAR adequately explains their current situation. The production company's own investigation into the scandal is still pending.

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