How three sisters (and their mom) tried to swindle the CRA out of millions

The Saker women were the model of rural ingenuity, running a successful restaurant and gourmet food businesses on Cape Breton Island. What they were mostly cooking? The books.
by SARAH TRELEAVEN illustrations by nigel buchanan
Cape Breton1

June 21, 2022

When Angela MacDonald self-published Juliette & John: The Perfect Recipe in 2014, she marketed the cookbook as a delightful slice of culturally diverse Cape Breton. Angela was inspired by the culinary traditions of her Lebanese and Italian grandparents (the titular Juliette and John) as well as her Irish husband, weaving her recipes into an eclectic collection that includes both tabbouleh and Cape Breton Irish chowder.

In her author photo, Angela has olive skin and long dark hair, and wears a fitted long-sleeve black shirt and large pearl earrings. She has the perky confidence of someone who was popular in high school. The book, she says in the forward, is meant to demystify gourmet cooking. “If you take the recipe and break it down into parts, you will see that the foundations of even the most intricate meals are based on just a few elements,” she writes. “My sisters and I call these the Elements of Cooking™.” Angela reassures readers that anyone can whip up a béchamel sauce or blend a pistachio pesto until it has “a damp sandy texture.” Her recipe for fresh shrimp and spinach ravioli with brown-butter sage isn’t exactly daunting; the first step involves plating store-bought ravioli. 

Angela was a member of the Saker family, who were well-known in Cape Breton for the Spaghetti Benders, the restaurant the three daughters—Angela and her sisters, Nadia Saker and Georgette Young—ran near Bras d’Or Lake, in a quiet, forested section of the Trans-Canada Highway about 30 minutes northwest of Sydney. The restaurant closed in 2010, and the sisters later opened an ambitious food boutique on the same site, stocking a range of their own products, including salad dressings, pesto and preserves. They offered cooking classes and catered events and proudly displayed Angela’s cookbook.

The Saker sisters seemed to be the model of rural ingenuity. In this small, economically depressed island at the far eastern edge of the country, they had identified a need for diverse food and dining options and then rolled up their sleeves to make it happen. In the introduction to her cookbook, Angela notes that running Spaghetti Benders with her sisters served as a crash course for the many companies they later started. “We created a wonderful clientele, met many interesting travellers and learned a lot about life, ourselves and the concepts of business and entrepreneurship,” she writes.

And so it might have been particularly heartwarming for an agent with the Canada Revenue Agency, when reviewing the Sakers’ tax returns in 2015, to observe that Angela’s company, which sold salad dressings and her cookbook, had done a whopping $1.5 million in sales in a single month. Perhaps even more inspiring, the sisters were moving whole pallets of their salad dressings and sauces; their catering company was booming, yielding millions in sales. The Sakers had opened several more businesses, closing gaps in the Cape Breton market for things like artisan wigs and children’s fur coats.

But the most impressive feat of all? Their restaurant, the Spaghetti Benders, reported over $400,000 in sales—in the three years after the sisters shut it down. 

Angela’s cookbook is full of memories that portray a warm, close-knit family. The girls started cooking when they were kids, and by age 10 Angela was making pizzas and roasting chickens. When the sisters were young adults, their friends would often crash at their parents’ house after a night of drinking and dancing. The Sakers’ mother, Lydia, would gather up the girls’ smoky clothing and wash it, then cook a duck with potatoes for dinner. On Christmas and Easter, their father would roast a leg of lamb and serve it with Lebanese flatbreads.

The Ballerina Birthday Cake recipe is accompanied by a 40-year-old picture of the Saker women: Lydia, her dark hair short and her smile muted, has all three girls bundled in an embrace. “Our mother always made our birthday cakes at home,” writes Angela. “A fluffy white cake recipe, pink icing and the same ballerina birthday candles. After years and years of the same cake, we eventually burned the arms off the ballerina in protest, and I believe we got a store-bought cake after that.”

The sisters—Georgette the eldest, Angela, the middle daughter, and Nadia, the baby, all two or three years apart—were popular in school, but not everyone liked them. One former classmate at Memorial High School in Sydney Mines, whom I’ll call Melissa to protect her privacy, sent me several DMs on Facebook where she described the sisters as snobby and said she’d heard that their mother made them learn how to walk and sit properly, “like a lady.” “They were in a very different class than the rest of us,” she says.

The Saker sisters had plenty of ambition. In the mid-’90s, they decided to capitalize on their love of the culinary arts and open Spaghetti Benders. (“Spaghetti bender” is a derogatory term for an Italian person.) The restaurant served classic Italian recipes with the occasional Lebanese dish. The Sakers did it all: cooking, baking, waiting tables, managing the books and paying the bills. One Twitter user reminisced about the “amazing” white lasagna he was served at Spaghetti Benders, even though his “well-travelled aunt labelled it horrible.”

In the coming years, Angela got married and had a daughter. Her family lived in a large and handsome beige-shingled home in Nova Scotia’s Annapolis Valley. Georgette married and had a son, settling in North Sydney in a white house with a gable roof and well-worn chairs on the sprawling front porch. Nadia lives close by, on a country road just south of North Sydney.

In 2013, three years after closing the restaurant, the sisters announced their intentions to convert it into a boutique and event space, where they could expand their entrepreneurship in several directions. They opened a catering business under the name Housewives in Heels and decided to use the on-site kitchen for cooking classes. They planned to design jewellery and accessories and to introduce a kids’ clothing line called Maddie & Bella, which would offer pricey fur coats. They
reserved part of their large space to display local artisan wares, such as driftwood lamps and homemade soaps. Georgette told a local newspaper that she and her sisters were combining all of their business interests to create something “like meatballs and a side order of earrings.”
Even Lydia Saker, their mother, got involved in this entrepreneurial bonanza; she started up a company that sold hairpieces.

They were also cementing their role in the community, registering a charity called Cooking with the Saker Sisters Society, also known as Lemon 77, which they described as having a focus on education and healthy eating. In January of 2013, Georgette and Nadia judged a playful beauty pageant to raise funds for a long-term care facility. The Saker sisters seemed to be setting themselves up for generational prosperity, combining business acumen with social responsibility. They were trying to fashion a mini empire, all at once. 

I tried to reach the Sakers numerous times, with no response. But according to court documents, all was not well behind the scenes. Around the time the Sakers announced their new ventures, the Royal Gazette—Nova Scotia’s official weekly government record of legal notices—included the Spaghetti Benders on a list of businesses that had defaulted on payment of their annual registration fee. I spoke to a woman I’ll call Meghan, a single mother who lived in the Spaghetti Benders building when it was briefly converted to rentals. She told me Georgette stiffed her on a deposit and she had to take her to court to get her money back. In messages exchanged between the two, Meghan refers to the fact that she repeatedly paid her rent early every month because Georgette kept telling her how broke she was. “I got the sense that she would lie for a dollar,” says Meghan.

In 2015, Carol Power was working as an auditor with the CRA in the tax services office in St. John’s, Newfoundland. Her job was to ensure companies were complying with tax laws, reviewing their records to make sure they had properly reported the taxes collected from sales and input tax credits, or ITCs, spent on expenses. When businesses in Canada file their tax returns, they note how much sales tax they’ve collected from customers; this amount is balanced against credits for taxes paid out in the course of operations. If the amount paid out is larger than the amount collected, businesses are entitled to a refund. The refundable amount is an ITC. These returns are typically filed electronically, and businesses are not asked to submit supporting documentation at that time.

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In April of 2015, Power’s team leader referred a file to her for audit: Housewives in Heels. Power reached out to Nadia, who was listed as the company director, to ask about the company books and records; Nadia told her they had been destroyed in a flood. Power advised her to go back to customers and suppliers for duplicate invoices that clearly outlined the business’s sales and purchases. She asked about the vehicle Nadia used for the business and whether she kept a log to distinguish between personal and professional use. Nadia seemed hesitant to answer.

Soon, Power’s purview expanded to include nine additional businesses related to Housewives in Heels, including New & Chic, Inc., a marketing and design company; Artisan Hair Loss Therapy; Kishk Inc., which made kishk (a traditional Lebanese food) and dressings; Latatia Advertising, Inc.; Maddie & Bella’s Children’s Clothing; Juliette & John Inc.; the Spaghetti Benders, Ltd.; and two numbered companies. Nadia, Georgette, Angela and their mother, Lydia, were each listed as principals for one or more companies. Collectively, on tax returns filed between 2011 and 2015, the Saker companies claimed $5,579,806.30 in ITCs and reported $2,572,419.90 in HST collected through sales of their products and services—suggesting they were owed a refund in excess of $3 million. Before the audit was triggered, the Sakers and their businesses had collected $239,069.34 in GST/HST refunds from the government via previous tax returns.

The CRA has increasingly become concerned about abusive GST/HST filings that fabricate businesses with the sole purpose of extracting unlawful refunds from the government. Etienne Biram, a representative from the CRA, declined to comment on the Saker case. He did, however, note that the federal government has made significant investments since 2015 to strengthen the CRA’s ability to crack down on complex tax schemes, and that the 2021 budget allocated additional funding to hire auditors and data scientists, and to modernize the CRA’s risk assessment systems to better detect GST/HST fraud. “Each year, the CRA effectively reduces the amount paid out by over $1.7 billion through examinations and audits, preventing the payout of unwarranted and fraudulent GST/HST refunds,” says Biram. “It is anticipated that the amount of recoveries and the average audit yield will increase over the next five years.”

By July of 2015, Power still hadn’t heard back about the requested invoices, so she nudged both Nadia and Georgette. Within days, several boxes arrived at the St. John’s office. Most of the documents were handwritten and separated into Ziploc bags. As Power examined the materials, she noticed two things: their sales were very high, and they had a collection of related companies that appeared to be buying and selling goods to each other. 

She noted something else, too. While Angela, Nadia and Lydia were associated with one or two of the businesses, Georgette acted as bookkeeper for all the companies under audit. When questioned, Georgette presented herself as the family caretaker—she was helping her mother with Artisan Hair Loss Therapy, and she helped Nadia’s and Angela’s businesses with invoicing. When Power asked about banking records, Georgette indicated that most of the transactions were done in cash. Power asked how it was possible that hundreds of thousands of dollars were going back and forth in cash. “I keep it in my house,” Georgette said.

By September, the scope of Power’s inquiry had expanded considerably. She was on the cusp of retirement and working part time, and the audit of the Saker family businesses was eating up most of her hours. Communication with the Sakers was, at times, frustrating. As Power pressed Georgette on audit questions, Georgette consistently asked to amend the returns, as if she could turn back the clock and make the investigation go away. Power decided a field visit was necessary so she could observe the Saker sisters’ operations firsthand.

In October of 2015, Power travelled to Cape Breton, where she met the Saker sisters at the old Spaghetti Benders location and interviewed them about their businesses. She asked about major customers, vehicle purchases, product storage, inter-company sales and bottling facilities. When she requested purchase invoices, the Sakers told her their goods were from Chinese suppliers and customs didn’t provide any import documentation. When she asked for sales invoices supporting a $270,000 sale of wigs and hairpieces, Power received invoices for seafood lasagna. Georgette offered invoices for the sale of meatballs, but when Power asked if she had a permit for the sale of meat, Georgette indicated they were “meatless meatballs.” Some of the invoices appeared to have White-Out on certain lines. When Power met with Lydia to discuss Artisan Hair Loss Therapy, Lydia appeared to be reading off of prepared notes. Power asked about one $10,000 invoice for wigs, and Lydia suggested it might be human hair from Italy, which was expensive.

By this point, Power harboured doubts that the former Spaghetti Benders served as headquarters for a multi-million-dollar conglomerate. Inside the small, single-storey building was a stand-up deep freeze and a couple of tables with articles of clothing for sale, including three children’s fur coats, priced at $1,000 a piece; Georgette explained they came from China, and she didn’t have any invoices. Power asked where the rest of the equipment was, and was told much of it had been hauled to the dump.

“In general, there was a lot of laughing between the sisters,” Power wrote in her notes. “I directed my questions to Angela MacDonald; however, she always laughed when I asked a question, looked to Georgette before she answered or said she did not know; I would have to ask Georgette. She said Georgette took care of things.”

In the report she filed upon her return, Power recommended denying all unsupported or questionable ITCs requested by the Sakers. From her perspective, the scheme was becoming clear: the GST returns filed by the Sakers claimed they were entitled to refunds on the basis that their ITCs exceeded their tax liability—in other words, they were paying out more GST to suppliers than they were taking in, and they were asking the government for a correction. 

In order to inflate their ITCs, the Sakers created a number of companies that existed almost exclusively on paper. Through these companies, they became their own suppliers, sellers and purchasers, and they tinkered with the GST collected versus GST paid to maximize their potential government refund. The Sakers invented a huge volume of sales and purchases to justify their claims—in one case, New & Chic provided design consulting to Kishk for $500,000. They mixed in personal expenses, created invoices in the name of customers and small businesses that didn’t really exist and implicated real local businesses, many of which had never even heard of the Sakers and their many companies. In reality, there were no fur coats for the children of Cape Breton.

Whatever small amount of legitimate business the Sakers were doing was dwarfed by the fraud, and the scheme could only work if the sisters worked in concert; Georgette appeared to be the ringleader. Power suggested referring the Saker case to the CRA Criminal Investigation Directorate, or CID, which pursues suspected cases of significant tax evasion. Michael Boudreau, lead investigator for the CID, obtained search warrants for properties belonging to Nadia, Angela and Georgette.

On the morning of November 22, 2017, Angela arrived at her home in Kentville, Nova Scotia, to find CRA investigators in dark clothing milling around her yard. A woman named Jennifer Jones, who works for the CRA, introduced herself to Angela and explained why the searchers were there. Angela told them they weren’t going to find anything. The neighbours were watching and she was embarrassed. 

In Angela’s telling, as laid out in court documents, the CRA team pushed their way into her home and stomped around her house; they asked her about firearms and computer passwords and at one point they shoved her, causing her to fall. She says Constable Kevin Lutz, a police officer who accompanied the investigators, put his hand on his gun and told her if she didn’t behave, he would return with the media. (Lutz denied these allegations, saying if Angela had tripped, his first instinct would have been to help her up.) The team looked through Angela’s husband’s car and the couple’s young daughter’s closet; they removed light bulbs and light switch plates. When Angela asked permission to go to the bathroom, she says the investigators made her keep the door open. She later described the search as “very abusive.” 

Georgette says she was paying bills in her kitchen when the CRA investigators arrived at her home. They showed her a business card that she thought looked funny, and she “felt she was being conned.” She says she tried to push the door closed, but three investigators pushed back. Georgette claims they put so much pressure on the door that it caused her to urinate. Her husband was dispatched to get the mop and bucket. Once the investigators were inside, Georgette told them they could find her receipts in the laundry room. She says they deployed stethoscopes to listen to her walls, combed through her flour and sugar jars and followed her to her bedroom and bathroom. CRA investigator Mike Lemmon would later testify that the search was normal other than Georgette “peeing herself.”

Nadia, who was drinking coffee in her kitchen when the action started, first called one of her sisters and then tried to contact a lawyer. She says the CRA investigators did not show her any identification. In the house, they flipped her mattress, unzipped her couch cushions and intimidated her.

Lydia Saker, their mother, who was shuttling between two of the locations, says she also saw police with hands on guns during the search. She said she was approached by investigators in dark jackets who came at her “like terrorists.” On the verge of a panic attack, she had to go out to her car to calm down.

In reality, the search was standard procedure. The CRA investigators were looking for books, records, documentation, and electronic hardware and storage devices. They subsequently spent nearly three years combing through the Saker family bank records, sales receipts and invoices and searching for T4 slips, trying to track the Sakers’ behaviour and establish their patterns. Boudreau learned that many of the businesses had been operating largely without bank accounts, and most appeared to have no employees, supplier contracts or even production expenses. When CRA investigators asked the Sakers to provide supporting documentation to prove they were entitled to the refund amounts they claimed, the Sakers produced a huge volume of vendor invoices and sales receipts.

In all, the seized documentation suggested in excess of $80 million in sales invoices; $55.7 million (before HST) were sales between the companies controlled by the four women. The Sakers claimed that a grocery store in North Sydney had purchased $1 million worth of Artisan Hair Loss Therapy’s wigs. There were 68 Housewives in Heels catering invoices, each in the amount of $50,000 for events of 500 people, for total sales of $3.4 million in just three months. Boudreau realized the sisters were suggesting they had fed 34,000 people in that period—which is just about the population of Sydney. One of the many vendors listed by the Sakers was Vandalee Industries, a name nearly identical to that of George Costanza’s fake employer on Seinfeld. It was almost like the Sakers were having a good time.

One morning in the fall of 2018, Ron Marks was at Italian Market, a specialty store and restaurant he owns in the north end of Halifax. Two government agents walked in, flashed their badges and said they’d be back to interview him. On the arranged day, the agents sat a nervous Marks down next to a tape recorder and asked him about a series of transactions. Did he sell hundreds of thousands of dollars worth of olive oils and Parmesan cheese to the Sakers? Did he buy 200 cases (or $578,750 worth) of Angela’s cookbook? Marks, despite the apparent gravity of the situation, found himself suppressing a chuckle. “It’s just so unrealistic that this amount of product would ever be sold on the East Coast,” he says. “It would barely be sold in Toronto or Montreal retail markets.” When the police showed him some of the invoices they were referencing—all related to the Saker family businesses—Marks noted that one was for $300,000 worth of “high-end” balsamic. “That’s not the way balsamic is sold,” he says. “We call it a 12-year or five-year balsamic blend. To think that anyone would believe this . . . They really aren’t great thieves.” 

By 2019, Georgette was trying to maintain a business she had been running out of her home for years, offering cooking classes for kids. On January 31, 2019, she posted a message to her Facebook followers that classes were still on: “The cost for feb is $60 and don’t believe one word!!!!!!”

The next day, the Sakers were collectively charged—along with their 10 companies—with a total of 60 counts under the Criminal Code of Canada and the Excise Tax Act related to defrauding the government, making false statements and obtaining or attempting to obtain refunds they were not entitled to. The offences were alleged to have taken place over a four-and-a-half-year period, from January 1, 2011, to July 31, 2015, ending at about the time that Carol Power started poking around.

The fraud case was heard in the Sydney courthouse in June and July of 2021, and the Sakers chose to represent themselves. Uniformly dressed like it was casual Friday, they called no witnesses and offered no evidence. When the president of a Cape Breton distillery testified that the invoices produced by the Saker sisters were fraudulent, Georgette told him she was a big fan of his whiskey. When Marks got on the stand, she said she enjoyed shopping in his store. She told another witness she looked nice and then said she had no further questions. 

The Saker family’s position was that not only were they upstanding community members and principled entrepreneurs, but they were also the victims of a vast CRA conspiracy. Georgette said Carol Power and Michael Boudreau lacked credibility and worked together to “make up this fictional event that never happened” and that there is “no proof, just a story.” She also noted that the GST returns cashed by the Saker family could have been filed by anyone who stole their CRA Netfile access codes out of their mailboxes. In her closing argument, Georgette reiterated that she and her family did not knowingly participate in a scheme to defraud the government of millions of dollars. “We are people with integrity and pride,” she told the court. “Housewives who make cupcakes. Certainly not gangsters or fraudsters.”

In the end, the Sakers’ stab at a charm-offensive-meets-­conspiracy-theory proved no match for the Crown’s case. The women—and the companies—were found guilty of all charges on February 24, 2022. Each of the women was found culpable of 10 counts of fraud. In laying out her judgment, Justice Robin Gogan wrote: “The magnitude of the fiction in this case is breathtaking. The hubris of it is shocking.” And it wasn’t just the crime, she noted, but the cover-up. When the CRA began its audit, she said the defendants doubled down by creating additional fictitious invoices and amending claims to hide their original deception. “The vulnerability of our tax system was exposed,” she wrote.

The temptation to buy into the pure ham of the proceedings proved irresistible, even for the judge. In her ruling, she said it was clear there were, in fact, no cupcakes being made by the Saker sisters and their mother. “What was being baked here was a scam of epic portions, made with equal measure of deceit, arrogance, gall and massively misguided creativity,” she wrote. “It is my hope that the Canadian public will never be subjected to this kind of recipe ever again.”

Immediately following the judgment, the Sakers announced their intention to appeal, but the 30-day period elapsed with no such filing. They’re expected to be sentenced in June, and the government has recommended federal prison sentences for each of them: two to three years for Nadia, Angela and Lydia; three to four-and-a-half years for Georgette. “Georgette Young was the ringleader of this scheme and was the driving force behind its continuation in the face of the CRA audit,” wrote Crown counsels Mark Donohue and Constantin Draghici-Vasilescu. The CRA has yet to recover any of the refunds paid out to the Sakers. 

The Sakers’ crimes were ludicrous, but they were also a massive breach of public trust. Ron Marks, owner of Halifax’s Italian Market, is only half-laughing at their escapades. “The story is absurd,” he says. “But the part that bothers me is that once the government has your name, you’re on their little list,” says Marks. “I worry this might affect me down the road, with my taxes or whatever. It’s very unfair these people put us in this situation.”

Meanwhile, the remnants of their empire have dissolved. The old Spaghetti Benders location is now part of a Travels Inn motel, which has the modest ambitions of offering reasonable weekly rates and free Wi-Fi.

This article appears in print in the July 2022 issue of Maclean’s magazine. Subscribe to the monthly print magazine here, or buy issues of the magazine here.