Executive Summary: Key Legal and Evidentiary Issues

• Use of a shell corporation (9315-6560 Québec Inc.) and 1,252 false invoices to generate fictitious expenses and claim GST/QST input tax credits, thereby reducing Otika’s declared net income and taxes.
• Proof of deliberate tax evasion over roughly six years (Volets 1 and 2 combined), including sophisticated planning, exclusive use of the sham entity, and cheque cashing through money service businesses to conceal the ultimate beneficiary.
• Assessment of Mr. Hamza’s intent and credibility through his testimony, pre-sentence report, and subsequent 2022 conduct with new shell companies, leading the court to characterize him and Otika as incorrigible tax offenders with a high risk of recidivism.
• Application of sentencing principles for provincial penal offences under the Loi sur l’administration fiscale and the Code de procédure pénale, while drawing guidance (with adaptation) from Criminal Code proportionality, totality and deterrence jurisprudence.
• Determination of appropriate quantum of fines, including setting GST (LTA) penalties at 100% of the taxes evaded, to ensure that non-compliance is not profitable and to reflect the substantial public loss (over 1.37 million dollars in this volet alone).
• Structuring of multiple custodial sentences (concurrent versus consecutive) across two volets and two statutes (LAF and LTA), and deciding that the 54-month sentence for Volet 2 must run consecutively to the earlier 36-month sentence for Volet 1, for a global 90-month imprisonment term.

Factual background and tax scheme

The case concerns a large-scale tax evasion scheme orchestrated by Tarek Hamza through his construction company 9252-7266 Québec Inc. (known as Otika). Over several fiscal years, Otika performed legitimate construction and related work, generating multi-million-dollar gross revenues in both 2017 and 2018. However, instead of reporting the true level of taxable profits and remitting the GST and QST collected, Mr. Hamza set up and used a façade company, 9315-6560 Québec Inc. (9315), to fabricate deductible expenses and support fraudulent input tax credit claims.
9315 had no real commercial activity. It existed solely as a paper entity through which false invoices were generated. Otika booked these invoices as subcontracting costs and claimed the related GST/QST as input tax credits. In 2017, with gross revenues of 5,834,722 dollars, Otika reported a net income of only 40,697 dollars after claiming 2,608,441.43 dollars in fictitious subcontracting expenses to 9315. In 2018, Otika reported gross revenues of 5,523,671 dollars and net income of 170,399 dollars while using further fictitious billing related to 9315.
To complete the scheme, Otika issued 1,252 cheques to 9315, totaling close to six million dollars. These cheques were not deposited in a normal corporate banking structure but were instead cashed at a cheque-cashing centre (Cambrex). From the outset, a power of attorney allowed Mr. Hamza personally to cash these cheques on behalf of 9315. The court concluded that the only logical inference was that Mr. Hamza himself appropriated the funds. In substance, Otika was pretending to pay a subcontractor when, in reality, the money was being cycled back to Mr. Hamza while the company claimed artificial expenses and tax credits.
On the provincial side, the false invoicing reduced Otika’s corporate tax, allowing it to avoid at least 462,503 dollars in income tax that should have been paid over the 2017–2018 period. On the consumption tax side, Otika claimed and received GST and QST refunds it was not entitled to, by treating the fake invoices as real taxable purchases. The decision identifies provincial (TVQ and income tax) losses of 1,072,792.47 dollars and federal (TPS) losses of 305,910.20 dollars, for a total spoliation in this volet of 1,378,702.67 dollars.

Investigations and prior proceedings (Volet 1)

The 2026 sentencing judgment (Volet 2) must be read together with an earlier decision rendered in 2025 (Volet 1), which dealt with similar conduct in prior fiscal years. In Volet 1, Revenu Québec had already uncovered that Otika, under Mr. Hamza’s direction, used two other shell companies to implement substantially the same strategy: false subcontracting invoices, improper input tax credits and understated taxable income. Those earlier offences covered the fiscal years 2013–2014 and 2016 and resulted in total losses of 724,973.01 dollars (including both income tax and sales tax elements).
In Volet 1, the Court of Québec found Mr. Hamza and Otika guilty and, on 12 February 2025, imposed a global custodial sentence of 36 months on Mr. Hamza, together with significant fines, including 10 months’ imprisonment concurrent for the LTA component and 100% penalties of the GST evaded. This earlier judgment is explicitly integrated by the sentencing judge in Volet 2, both to assess pattern and recidivism and to determine a globally proportionate sanction across both sets of proceedings.

Charges and legal framework

The charges arise under two statutory schemes. Provincially, the case engages the Loi sur l’administration fiscale (LAF), which contains penal provisions for making false or misleading statements in tax returns, aiding in the making of false entries in records, and thereby eluding or attempting to elude income tax and QST. Specifically, the court applies sections 62(a) and 62.1(b) LAF, which create offences for false declarations and aiding or acquiescing in false entries, and section 63 LAF, which mandates substantial fines tied to a percentage of the tax evaded (minimum 125% and up to 200%).
At the federal level, the charges are under the Excise Tax Act (Loi sur la taxe d’accise, LTA), particularly section 327(1)(a) and (b)(ii). These provisions penalize making false or misleading statements in connection with GST returns and aiding or abetting such conduct, with fines fixed as a percentage of the GST or “net tax” evaded (between 50% and 200%), plus a possible term of imprisonment on summary conviction.
Because these are penal regulatory offences rather than Criminal Code crimes, the procedural framework comes from the Code de procédure pénale (CPP) of Québec. Article 229 CPP states that the judge must impose a sentence within statutory limits, taking into account the circumstances of the offence and the offender. The court also notes that the LAF itself does not enumerate detailed sentencing principles and, accordingly, it is appropriate—though with adaptation—to draw guidance from the sentencing provisions of the Criminal Code (sections 718, 718.1, 718.2 and 718.3). The judge accepts that the central principle remains proportionality between the gravity of the offences and the offender’s degree of responsibility, with deterrence (especially general deterrence) and denunciation playing a strong role in serious tax evasion.

Key evidentiary findings and credibility assessment

On the evidence, the court finds that the tax offences were not the result of negligence or sloppy bookkeeping but reflected a carefully designed and executed fraud. The creation of 9315 as a shell company, the fabrication of 1,252 invoices, the systematic use of cheque-cashing services, and the absence of genuine business operations at 9315 all support the conclusion that Mr. Hamza intended from the outset to construct an artificial structure to drain tax revenues and enrich himself.
The judgment gives significant weight to a pre-sentence report, which portrays Mr. Hamza as having weak moral boundaries in financial matters and a tendency to rationalize or minimize the impact of his actions. He previously received social assistance while being paid under the table, downplayed the resulting loss to the state, and in the present context offered explanations for his conduct that the court found implausible.
The court also carefully scrutinizes inconsistencies in Mr. Hamza’s statements about his family finances. He portrayed himself to the criminologist as the sole breadwinner, suggesting that imprisonment would leave his family destitute. However, tax records showed that his wife, Ms. Jamel, reported substantial employment income from Otika—frequently in the six-figure range—from 2019 to 2023. This discrepancy led the court to question whether he was misleading the report writer to evoke sympathy or whether the salary attributed to his wife did not correspond to real work performed. Either way, it undermined his credibility.
Furthermore, the court considers later conduct in 2022 as detailed in an internal Revenu Québec report by a verifier, Mr. Abdullah. That report identified two new associated entities used by Otika as apparent shells in 2022, lacking employees and employer accounts and having their GST/QST registrations cancelled. Their cheques from Otika were again cashed at centres d’encaissement. Mr. Abdullah hypothesized that the funds were used to pay workers in cash, likely to avoid source deductions. Although he referred to an unidentified “third party” cashing the cheques because he could not prove who did so, the court viewed this as entirely consistent with the pattern already proven in relation to 9315 and as further evidence of an entrenched scheme.
When testifying on sentence, Mr. Hamza argued that if the tax authorities simply “requalified” the 2017–2018 subcontracting expenses as wages, the problem would disappear, and he pushed the idea that he had merely been careless in choosing subcontractors. The judge rejected these arguments as surreal and manipulative because they ignored the core finding: that the invoices were fabricated, the alleged subcontractors were shells, and the entire structure existed to defeat both income tax and GST/QST collection.

Sentencing analysis and principles

In working out the sentence, the court distinguishes between objective and subjective gravity. Objectively, the offences sit at the top end of the provincial penal scale. The relevant LAF provisions allow fines up to one million dollars per count and imprisonment up to five years less a day, and the LTA provisions permit significant fines and up to two years in jail on summary conviction. The jurisprudence consistently treats serious tax fraud as comparable, in gravity, to other major economic crimes, emphasizing that such conduct erodes the self-assessment tax system and increases the burden on honest taxpayers.
Subjectively, the court regards the case as particularly severe. Among the factors the judge lists as aggravating are: deliberate and sophisticated planning; duration of over two years in this volet (and six years across both volets); the high number of false invoices; a very large total spoliation (1,378,702.67 dollars in Volet 2 alone and 2,103,675.68 dollars across both volets); a motivation purely rooted in greed; an implicit abuse of public trust in the tax system; and a very high risk of recidivism indicated by both the pattern of conduct and Mr. Hamza’s mindset. The court finds no mitigating factors of substance. Lack of prior LAF convictions before these offences is discounted given the scale and persistence of the misconduct, and there has been no repayment of the amounts due, only a professed willingness to repay that has not materialized in action.
The judge also addresses the appropriate fine level for the LTA charges. While the statute permits fines from 50% to 200% of the GST evaded, the court refuses to adopt the minimum. Imposing only a 50% penalty—allowing the offender to keep half the fraudulently claimed tax refunds—would in effect make deliberate non-compliance profitable. In light of the seriousness of the scheme and the offender’s profile, the court holds that fines equal to 100% of the GST evaded under the LTA counts are the minimum acceptable in this case.
In determining imprisonment, the judge situates the case within broader Canadian sentencing ranges for fraud. Drawing on doctrinal authority and Court of Appeal case law, the court observes that frauds involving more than 500,000 dollars are generally treated as “fraudes de grande importance,” typically attracting sentences between three and five years in Criminal Code prosecutions, often higher when the fraud reaches into the millions. While recognizing that provincial regulatory offences are not identical to Criminal Code offences, the court still finds it appropriate—subject to moderation—to align punishment with these benchmarks because the moral blameworthiness and societal harm are comparable.

Structure of concurrent and consecutive sentences

For Volet 2, the court first fixes what it considers proportionate terms of imprisonment for each count taken individually. Under the LAF file, the court assigns: 54 months for the false return and related false entries tied to the QST refunds (counts 1 and 3), 30 months for the false expense declarations for fiscal year 2016–2017 (count 4), and 18 months for the false expense declarations for fiscal year 2017–2018 (count 6). Under the LTA file, it assigns 24 months for each of the GST-related counts (counts 1 and 3).
In principle, because the different counts relate to different tax heads (QST vs GST) and different tax years or types of misconduct (refund fraud vs income under-reporting), many of these sentences could justifiably run consecutively. If they all did, the total would reach 126 months (10.5 years) for Volet 2 alone. Applying the principle of totality, which requires that the overall sentence not be crushing or disproportionate in relation to the offender’s culpability, the court instead orders that all the Volet 2 custodial terms run concurrently, yielding a global sentence of 54 months for this volet.
The court then has to decide how this 54-month term interacts with the prior 36-month sentence imposed in Volet 1. Since the earlier and later offences relate to distinct time periods (2013–2016 in Volet 1 and 2017–2018 in Volet 2) but form part of a single, evolving tax fraud strategy, the question is whether justice and proportionality are better served by concurrent or consecutive treatment. After reviewing the total spoliation of 2,103,675.68 dollars across both volets, the persistence of the scheme over six years, the escalation in amounts in Volet 2, and the absence of any genuine rehabilitation, the court concludes that a global sentence of 90 months (7.5 years) is justified and not excessive. Consequently, it orders that the 54-month custodial sentence for Volet 2 be served consecutively to the earlier 36-month sentence from Volet 1.

Final orders and overall outcome

On the monetary side, the court imposes very substantial fines. In the LAF file (500-61-552599-228), Mr. Hamza personally is fined 764,861.84 dollars on each of counts 1 and 3, 365,608.75 dollars on count 4, and 216,520.00 dollars on count 6, for a subtotal of 2,111,852.43 dollars. Otika receives identical fines on its corresponding counts (8, 10, 11 and 13), adding another 2,111,852.43 dollars. In the LTA file (500-73-004838-229), Mr. Hamza is fined 305,910.20 dollars on each of counts 1 and 3 (total 611,820.40 dollars), and Otika is fined the same amounts on counts 4 and 6 (another 611,820.40 dollars). Across both volets of the present proceedings, the total monetary penalties imposed on Mr. Hamza and Otika in this sentencing judgment amount to 5,447,345.66 dollars in fines, over and above any tax, interest, and collection measures pursued by the revenue authorities.
Overall, the successful party is the prosecuting authority—Agence du revenu du Québec, acting also on behalf of the federal Crown. The court grants its request for firm custodial sentences and elevated LTA fines, concluding that general and specific deterrence, denunciation, and protection of the tax base demand a strong response. Mr. Hamza will serve a total of 90 months’ imprisonment when Volets 1 and 2 are combined, and he and his company are jointly burdened with fines totalling 5,447,345.66 dollars in favour of the state as penal sanctions for the large-scale fiscal fraud carried out through Otika and the shell companies.