A Canadian judge has cleared the way for a class-action lawsuit over a charity tax credit programme that was alleged to have served to enrich a private trust and companies based in Bermuda.Businessman Edward Furtak, who lives in Bermuda, is described in the plaintiff’s filings as the “mastermind” of the programme, which landed Canadians who took part in the plan with unexpected, large tax bills.Mr. Furtak was originally a defendant in the lawsuit, but settled with Mr. Cannon in exchange for information, along with others, including former Bermuda resident and bank executive Kenneth Spurling, Sheila Zych, Axel Kindbom, Wayne Robertson, and Ronald G. Olsthoorn.The other defendants included Mr. Furtak’s corporations and private trusts, and the directors and trustees of the Funds for Canada Foundation.Mr Furtak is president of Bermuda-based Trafalgar Group and also started a number of other separate companies including technology provider Conexys Corporation, and private jet services firm JetSet International. He once bought, refurbished and offered for sale 30 French Morane Saulnier MS-760 jets.When contacted in Bermuda yesterday, Mr Furtak said, “We have no comment at this time.”The lawsuit alleged conspiracy, fraud and fraudulent misrepresentation by the Bermuda trust and companies, including Bermuda Longtail Trust, with Appleby Services Bermuda Ltd acting as its trustee.Plaintiff, retired police officer Michael Cannon, representing a group of approximately 9,925 people who took part in the Donations Canada Charitable Donation programme between January 1, 2005 and December 31, 2009, is seeking $50 million in damages.Cannon and thousands of Canadians took part in the Donations for Canada Gift Program; it was an opportunity to obtain a $10,000 charitable tax credit in return for a $2,500 donation.However, after Cannon’s and others’ tax returns came to be reassessed by the Canada Revenue Agency, they were told they had to repay their tax deductions with interest.Mr. Cannon, who donated more than $20,000, along with the others contributed a total of $144-million to the programme.“They came from all walks of life: teachers, lawyers, nurses, administrators, presidents and police officers,” the Ontario Superior Court judge wrote in his decision, according to a report yesterday in the National Post. “One person donated $4-million. More than 700 people donated more than $100,000 each.”But, the Post reported, “The CRA decided the donors lacked donative intent’, meaning that the supposed gift did not cost them anything because they expected to be enriched by a far larger tax credit. As a result, they were required to repay the full deduction, plus interest.”The Post cited a CRA statement: “The charity, in turn, paid over $14.2-million to the tax-shelter promoter as fundraising fees and directed $160.8 million to an offshore investment vehicle.“Our audit findings indicate that 79.05% of the funds directed to the offshore investment vehicle were eventually returned to the original lender of the funds. The charity retained a meagre 1% of the total tax-receipted amounts for use in its own programs.”In his claim, Mr Cannon had said that none of the promotional material explained that the cash and in kind donations to the charities were conditional and on terms limiting their use, arguing that the omission of such facts was made by Parklane, Trafalgar Trading, Trafalgar Associates, the Bermuda Longtail Trust and the Donations Canada Trustees with the intent to mislead and harm the participants.Trafalgar had argued that Mr Cannon’s claims did not raise issues that were “truly common” and a class action was not the preferable way to deal with such claims.The company said: “The gift programme was not a conventional tax planning strategy. The donors knew that there were risks involved in participating in the gift programme and expressly accepted those risks.”A trial date has not been set.