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Ontario Superior Court has reportedly approved a partial settlement in a class action lawsuit Canada alleging a GLGI charitable donation scam bilked consumers out of tax dollars.
Under the terms of the charitable donation scam class action settlement, a subset of the defendants, lawyers and law firms who allegedly assisted in the scam, will pay nearly $1.5 million. The estimated 40,000 Class Members will reportedly not see that money. According to Financial Post, “there will be no distribution to the Class from this settlement. The settlement funds will be used to repay disbursements, pay a levy to the Class Proceedings Fund, and pay legal fees to Class Counsel.”
In addition, these defendants have agreed to help the plaintiffs pursue remaining class action lawsuit claims against the remaining defendants, including the Global Learning Group, Inc. (GLGI), its director and officer, and other companies who allegedly helped perpetuate the tax scheme.
The Ontario Superior Court certified the proposed Class in June of 2019. Class Members include those who participated in the Global Learning Gifting Initiative between 2004 and 2014. The class action lawsuit alleges that the GLGI scam duped Class Members into paying $300 million in what they believed were charitable donations.
The GLGI Charitable Donation Scam
Lead plaintiffs, Lynn Wintercorn, Peter Newman, Emily Flammini, and Alex Kepic alleged that they each paid hundreds and even tens of thousands of dollars to GLGI as a part of a Global Learning Gifting Initiative Charitable Donation Program. They claim that they and others who gave were told that their donations, including cash and courseware, would be given to underserved communities and they would be able to claim the donations as tax credits.
According to a class action lawsuit filed in 2017 over the alleged GLGI charitable donation scam, those who gave were misled. The plaintiffs said that their tax credit claims were rejected by the Canada Revenue Agency because the agency determined that the GLGI charitable donation program had no charitable purpose.
GLGI Allegedly Funneled Donations Back
The plaintiffs claimed in their complaint that, instead of going to underserved communities, their donations were funneled back to GLGI and the individuals and companies that helped perpetuate the scam. The GLGI charitable donation scam class action lawsuit alleged that only about 10% of donations to the Global Learning Gifting Initiative made it to underserved communities.
Tax Court of Canada Deems Program A ‘Sham’
Indeed, according to a 2015 decision by the Tax Court of Canada, the GLGI program the plaintiffs donated to was determined to have no charitable purpose and was called a “sham” in court documents. As a result, the tax credits the plaintiffs and other Class Members thought they were receiving for their donations were invalid. Therefore, according to the lawsuit, they say they had to pay for the tax credits and, in some cases, additional penalties.
Law Firms Settle, Claims Remain
According to a recent announcement by the lawyers representing the plaintiffs, several lawyers and law firms who allegedly assisted in the scam have agreed to settle class action claims against them. In their most recent complaint, the plaintiffs alleged that lawyers assisted GLGI by guiding them on the structure and formation of the Global Learning Gifting Initiative program. In addition, the lawyers helped draft documents that identified beneficiaries of the GLGI program and also obtained software licenses for the program.
The $1.45 million settlement in the GLGI class action lawsuit is not the end of the road, however. This settlement will go to pay administrative costs and ongoing prosecution of claims against the remaining defendants, notes the announcement.
Did you take part in the GLGI charitable donation program? We want to hear about your experience with GLGI donations and any tax consequences. Tell us what happened in the comment section below!
The plaintiffs are represented by Margaret L. Waddell of Waddell Phillips PC.
The GLGI Charitable Donation Scam Class Action Lawsuit is Lynn Wintercorn, et. al v. Global Learning Group Inc., et al., Case No. CV-17-583573-00CP, in the Ontario Superior Court of Justice, Canada.
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10 thoughts onGLGI Charitable Donation Class Action Reaches Partial Settlement
I donated in 2005 and 2006. I ended up participating in other what I thought were investments set up by the sellers of GLGI, that turned out to be scams. Perpetrators have gone to prison and been released ( more than $4000000 sitting waiting for them. I am still trying to deal with the backlash from CRA. I just received a bill for, just under $21,000. For interest only, resulting from the 2005 2006 GLGI program. I received a letter from CRA stating if I paid the principle within 5 days all interest would be removed. By the time I received the letter the 5 days had already passed. I am now fully disabled and unable to work not sure how I am going to manage this debt.
I contributed for 3 years, the only reason I participated in year 2 was because the Federal Government provided a tax refund which was valid as seen by the official government rebate. When year 2 was a repeat of year one I again participated, with the same pattern for year 3. In 2010 this decision was reversed and I ceased to contribute. I paid an ex CRA agent to file for relief of interest but have heard no reply from CRA on this front. Since I was retiring I then paid all monies owing, while also paying money to be part of the class action suit. This is the same type of charity as cars for kids but this remains legal, while the GLGI became illegal AFTER 3 years of acknowledged returns from the Federal Government. I agree with changing course but do not agree with reversing a decision AND making it back payable. This is an injustice and morally wrong to do so.
I participated in 2008 only – but I just received a Notice of Confirmation from CRA . Looks like I have till May 8th to appeal. The tax I received back in 2009 vs. what I need to repay now – is double. Do not know what to do now. I still feel It was my tax back from CRA – if it was not legit , why CRA sent me money? . Give and take, give and take,,, not right. CRA should get the money back from GLGI, not us the victims of scam! I honestly thought I ‘m doing the right thing. 🙁
I did this back in 2006 and let me tell you if I ever seen the so called friend that got me into this I’d be in jail ..
I paid back over 30k and ever since this I won’t do anything on my taxes but my job t4s period.. 15 years later I get another letter from the cra about 2006 I just about had a heart attack but after I called they said I owe nothing since I paid everything then thank God…..
My Husband donated money for 2 years on the advice of his accountant. A couple of years later the CRA wanted the money back plus interest as it had been in court trying to get a decision. And of course the CRA doesnt want to wait so we had to scramble to get the money to pay them. Not a great experience.
Is there any hope of donors/participants in GLGI getting any money back?
I got sucked into this deal my accountant convinced me that it was a great way to save on taxes and at the same time help natives and other groups learn computer skillsI joined a class action suit with Merchants Law had to pay $500 to join nothing happened the government has been adding interest to this tax I feel I got scammed bothway
Frank, I got same and did the same with the same result, Scammed from GLGI then the Government, then the Merchants Law debacle.
Similar story all around for my father and nd he passed away with this unfinished. CRA still chasing me for this injustice.
This is the same scenario for me. I contributed 2011 and 2013. I paid back 2011 but last week was contacted but cra for 2013. Don’t know what I am going to do. While we have to pay the money back and lose out on the initial donation ,I wonder whatever happened to the people that created it (Glgi)and how they’re spending our millions sitting on a beach somewhere drinking margaritas. I have also heard absolutely nothing from merchant law