Friday, February 06, 2015

And you thought you had problems!

'Tax fighter' Philippe Dio Guardi has serious battles of his own

Seriously overdrawn accounts, a costly divorce and a host of client complaints to the law society have the lawyer arguing his own case on several fronts.

By Dale Brazao, News/Kenyon Wallace, News Reporter/Rachael Mendleson, News Reporter

Wednesday, February 4, 2015
Tax lawyers Philippe DioGuardi, right, and father, Paul DioGuardi, left, who run the firm DioGuardi Tax Law, photographed outside their firm's offices in Mississauga. (Kenyon Wallace/Toronto Star)

“I don’t cheat, I change the game.”
That’s a claim made in a recent radio ad by Canada’s self-styled tax fighter Philippe DioGuardi, who with his father and law partner, Paul, presents a unified force against the “wolves” of the Canada Revenue Agency.
A Star investigation reveals Philippe has been fighting his own battles on four fronts: Paul says Philippe over-drew $2 million from their firm; his estranged wife wants spousal support of $25,000 a month; Ontario’s legal regulator is investigating nine complaints against him; and the tax lawyer has only recently settled his own $147,000 debt to the CRA.
DioGuardi, who says he has helped more than 8,500 clients over his career, traces some of his woes to the “lavish lifestyle” of the woman he met and married in Russia in 2003. DioGuardi’s affidavit filed in his divorce proceedings says wife Elena DioGuardi’s lifestyle included “countless plastic surgeries,” jewellery, luxury vehicles, fur coats and trips abroad.

Elena DioGardi, the estranged wife of tax lawyer Philippe DioGardi in a photo taken from her Facebook page.

He also claims that Elena had been married twice before, including to a wealthy 70-year-old Californian whom she met through her profile on multiple “Russian bride” solicitation websites.
In an interview with the Star, Elena DioGuardi took exception to her husband’s claims.
“He’s saying I’m a mail-order bride, and I’m going to say absolutely a different story,” said Elena, whose Facebook page includes numerous revealing glamour shots of herself. “He’s going to do anything or say anything just to make me feel bad or make me look stupid in front of the judge.”
Philippe DioGuardi has built his high-octane career as an “adversarial” tax lawyer through a slick multi-million-dollar, multimedia ad campaign, in which CRA officers are portrayed as shady characters in dark sunglasses. One commercial, posted on YouTube, features a tax agent being shot with paintballs in the face and chest, while a voiceover says, “At the first sign of tax trouble, fire back.”

A billboard for DioGardi Tax Law claiming to be "CRA proof" near the law firm's office in Mississauga.
On DioGuardi law firm’s Facebook page, another ad features DioGuardi in a suit and slicked-back hair and proclaims simply: “Tax problems end here.”
A recent DioGuardi radio ad says the CRA plays “Mr. Nice Guy to get details about your bank account and your house, and then sends in the wolves to seize your money and your assets.”
Some details of DioGuardi’s financial problems are contained in divorce proceedings ongoing in a Toronto court. Philippe and Elena DioGuardi began divorce proceedings in 2012. Both sides have provided information that is now in the public domain.
Financial documents submitted by DioGuardi show that between the years 2009 and 2012, the firm had annual revenues of about $6 million, and spent about $2 million a year on advertising and marketing.
By 2012, DioGuardi’s overdrawing from his law firm account and marital problems prompted his father to characterize the situation as a “crisis.” The elder DioGuardi was forced to come out of retirement to take control of the firm they founded more than 10 years ago, change the signing authorities over the firm’s bank accounts, and put his son on a strict budget.
In a handwritten letter labelled “Demand” dated Sept. 30, 2012, Paul tells Philippe he is aware that “you are having significant marital problems” and “you are grossly overdrawing on your monthly draws from the DioGuardi Tax Law firm.”
The situation has “reached a crisis point,” the elder DioGuardi writes. “If these matters are not attended to promptly, I shall have to remove you as one of the executors of my and your mother’s will, and engage legal counsel to protect my rights. Please don’t make me take this step.”
The letter is signed: “Your Father.”
Total amount overdrawn by the son: more than $2 million.
In a desperate effort to “appease Elena,” DioGuardi explains in his court affidavit, he purchased a condo and a Mercedes-Benz for her in Russia, spent more than $200,000 on furs, $200,000 on jewellery and $20,000 on designer handbags, as well as paying for “countless plastic surgeries.”
“I naively did all of this for many years thinking that I could somehow buy a real ‘marriage’ relationship with Elena,” DioGuardi says in his affidavit filed with the Ontario Superior Court of Justice. “I did so in a desperate attempt to please Elena, or at least abate her anger and frigidity towards me.”
In a letter to the Star, Philippe blames his cash-flow problems on his wife’s demands and his commitments to his three children from a previous marriage. He says he was responsible for putting two children through university, while his youngest son, who is autistic, requires “extraordinary financial support.”
The father-son lawyers told the Star in their letter that an arrangement has been made for Philippe to repay the funds. The lawyers say the $2 million came from “owners’ equity” in the firm. As part of Philippe’s compensation, he was entitled to withdraw funds. Over a 10-year period, he took $2 million more than allowed.
“Philippe has a private arrangement with Paul to repay Paul his overdrawing,” the letter to the Star states.
Also revealed in the divorce documents is Philippe DioGuardi’s own tax troubles with the CRA. As of 2012, he owed the CRA more than $140,000, including $58,000 in unpaid taxes from 2011. By 2013, the taxman was trying to get a response from DioGuardi, with no luck.
“One of our officers has tried to contact you personally to discuss payment of this account, but has not been able to get in touch with you,” says a May 13, 2013, letter from the CRA, which threatens legal action unless DioGuardi responds, or pays his account within 15 days.
According to the DioGuardis’ letter to the Star, “Philippe DioGuardi was unable to retire his 2011 personal income tax balance immediately upon assessment due to personal cash flow issues related to his deteriorating marital situation.”
“The arrears were paid off in full over time, through an arrangement negotiated with the Canada Revenue Agency,” the letter says.
In his court affidavit, DioGuardi says his previous wife “abandoned” him and his three children years ago, leaving him with the responsibility of raising them and putting them through school.
Elena DioGuardi told the Star she first met Philippe at a bookstore in St. Petersburg, Russia, in the summer of 2001, when she accidentally stepped on his toes while buying “English literature.”
Philippe’s family, including his father, attended their wedding in St. Petersburg two years later, she said.
In his court affidavit, Philippe says he spent the next five years trying to get Elena to join him in Canada, but that she preferred St. Petersburg to Toronto, which she considered a “cemetery” of culture.
Court documents show her breakup with DioGuardi was turbulent.
DioGuardi, 53, portrays Elena, 40, as an angry, frigid gold-digger with a “violent temper” who assaulted his new girlfriend, Sofia Smolicov, 33, and damaged both her Mercedes-Benz and his Porsche Cayenne SUV.
Elena was charged by York Regional Police in November 2012 with assault and mischief, after an altercation with Smolicov. In a police report, Smolicov alleges that Elena showed up at her home in Maple and accused her of having an affair with DioGuardi.
When Smolicov tried to usher her out, Elena allegedly ripped a necklace off her, then swung her purse at Smolicov’s head. Once out on the front porch, Smolicov claims, Elena kicked the door, then picked up a flower pot from the porch and heaved it at a white Mercedes parked in the driveway.
The incident was captured on the home’s video security system, according to the police report.
The report states that officers believe Philippe will “pay for any damage as both victim and accused advised they are still in a relationship with Phil.”
The charges against Elena were later withdrawn, and she agreed to a peace bond with a condition that she not go near Smolicov.
DioGuardi also accused Elena of smashing a rear window of his Porsche Cayenne, after he suggested she move out of the luxury Bellair Ave. condo in the heart of Yorkville they previously shared and for which he continues to pay rent of $5,000 per month. Elena denies the accusation, saying she did not even know Philippe owned a Porsche, only that he owned a Cadillac and a Corvette.
And while DioGuardi claims in his affidavit that his wife has a “very violent temper,” Elena says in her court filings that she had to hire a bodyguard and driver after receiving threats from one of DioGuardi’s three children. She also says her marriage began to disintegrate because DioGuardi “started a relationship with a woman who worked for him” around the same time he married Elena.
In his court filings, DioGuardi denies the allegation.
Huge discrepancies exist in the claims Philippe and Elena make as to the value of property in each other’s possession.
Philippe claims in court documents that his wife’s fur coat collection is worth more than $200,000. Elena claims some of the coats were fake fur purchased from Russian websites, and puts the value of the collection at only $7,000.
In January 2014, the fur coat fight intensified when DioGuardi’s lawyers asked that arrangements be made for him to collect his own wolf-fur coat and a beaver-fur coat from the Bellair Ave. condo. Elena claims Philippe had already taken them when she was away in Russia burying her mother, who had died of cancer.
The blue mink that Philippe claims is worth $25,000 was purchased for $500, repaired at Holt Renfrew and “they added a Holt Renfrew label,” Elena’s court filings state.
Philippe claims in his court filing that he’s gone to painstaking lengths to accommodate Elena’s repeated demands for disclosure of his financial records.
“I am a tax lawyer practicing for 24 years now, and I take my responsibilities as ‘an officer of the court’ very seriously,” DioGuardi says in his affidavit. “Unfortunately, however, signing and swearing to the truth of the contents in an affidavit, or any other document means absolutely nothing to Elena.”
DioGuardi stated in the documents that he was “quite astonished by the degree of corruption and skewed attitudes towards truth and honesty” in Russian society. The remark drew a sharp rebuke from Elena’s lawyers, who said DioGuardi was relying on “ethnic slurs against Russians to substantiate his claims.”
The divorce case is ongoing.
The Star reported last May that six former clients of DioGuardi had complained about the lawyer to the Law Society of Upper Canada, which regulates all lawyers in Ontario. The number of complainants has now risen to at least nine, law society records show.
According to law society documents, most of the complaints allege that DioGuardi’s law firm failed to perform the work for which it was paid, and in some cases “tax situations were made worse after retaining DioGuardi Tax Law” while some clients were “left to resolve their tax matters on their own.”
In their letter to the Star, the DioGuardis say the complainants are “all tax debtors” and in some cases “seriously delinquent in their tax filings.”
“All retained the firm after the fact and only when the CRA was threatening to audit/seize bank accounts/foreclose on property,” the father-son team said. “All became ‘unhappy clients’ when it was time to pay the tax, and the law firm was unable to magically make their taxes go away. All have used a complaint to the law society as a ‘cost-free’ way to seek a ‘refund’ of the fees they paid.”
The DioGuardis have launched a court action against the law society to prevent the regulator from releasing any information to the public about the complaints without first obtaining a written waiver from each complainant.
In a radio ad taking issue with the Star’s initial story, DioGuardi says he “challenged the law society” over the way he protects client money, which he says can be nabbed by the CRA if it is kept in a trust account, as all lawyers in the province are required to do.
Dale Brazao can be reached at 416-869-4433 or .


Post a Comment

<< Home