Douglas M. Nagel - Amateur Forensic Accountant

[Hilfskreuzer Möwe]

Another little oddity – the curious progression of Douglas Nagel, a.k.a. Douglas M. Nagel, a.k.a Doug Nagel. His name came up in the Desautel's case discussed in this thread (viewtopic.php?f=46&t=8307). In a 2008 interview Nagel (http://www.canada.com/reginaleaderpost/ ... b9&k=15028) described himself this way:

"I was practising forensic accounting to take and expose the issues." The 76-year-old says he has four decades of practical and field experience operating an accounting company -- "you can't get that training in any university or any school" -- but no degree. His last 13 years have been for "special work for people in financial difficulty."

While Nagel certainly ultimately spiraled off into la-la land, he also appears at times to have actually played that role straight, for example Holte v. The Queen, 2002 CanLII 1091 (TCC) (http://canlii.ca/t/1c2k4), Canadian Imperial Bank of Commerce v. Taylor, 2001 SKQB 297 (http://canlii.ca/t/5h39), though not always successfully: Canada Trust Co. v. Osicki, 2002 SKQB 175 (http://canlii.ca/t/5j3t).

Nevertheless, in 2002 the Law Society of Saskatchewan obtained an injunction to prevent Nagel and his companies (Hubick & Nagel Accounting, Naget’s Debt Review Inc., and Amazing Opportunities by Nagel’s) from engaging in legal services. A copy of this order is attached to Capital One Bank (Canada Branch) v Buckle, 2012 SKQB 449 (http://canlii.ca/t/ftq5w), where the court punts material from Nagel that does “… not seek any identifiable relief.” Capital One v. Buckle appears to be an attempt to clear a credit card debt by spurious means.

The injunction against Nagel is rather interesting because it offers all kinds of specific examples of lawyer-ish activity Nagel for which Nagel is prohibited, for example:

(i) On the correctness or otherwise of any security arrangements;

…

(vi) On the meaning and applicability of provisions of the Bank Act, The Interest Act, The Personal Property Security Act of Saskatchewan, The Cost of Credit Disclosure Act, The Saskatchewan Farm Security Act, or any other state of Canada, Saskatchewan or otherwise;

(vii) As to whether the Statute of Frauds applied to a particular situation;

…

(xii) Whether an interest rate exceeds the maximum allowed by law and/or advising whether the calculation of interest complies with the law; …

Nagel not only promotes tax and obligation avoidance schemes, but also used them himself. This leads to a very quirky bit of litigation on whether a partnership, Superior Exteriors 2007, had correctly collected and remitted sales tax to the CRA. The dispute stalled at a very preliminary step, because Nagel refused to disclose corporate and share documents on this corporation, which he co-owned with a Denis Tysowski. The CRA sued to force Nagel to hand over the documentation.

R. v. Nagel, 2008 SKPC 117 (http://canlii.ca/t/20q65)

The trial decision is detailed, and runs through the narrative of how the CRA tried to convince Nagel to cooperate. Alleged defects in service were rejected, but CRA witnesses clearly established they had a history with Nagel. David Marshall, the Assistant Director of Revenue Collections and Client Services, reported he had ordered Nagel out of the Revenue Canada Office Building a few years earlier, and refused to meet Nagel: paras. 15-16. However, that led to this encounter:

… On the day Mr. Marshall ordered Mr. Nagel out of the Revenue Canada Building, Mr. Marshall was advised by a commissionaire that a taxpayer, Mr. Gavin Lemieux, had come into the office to see him. Mr. Marshall went to meet this individual who he had never met before. Mr. Marshall brought Mr. Lemieux into an office booth to meet with him. Mr. Marshall further testified as follows:

• And at that time, just - - just as I went to sit down I saw Doug who had obviously been hiding in the office, came around and start [sic] to come into the booth. And I got up said, hey Doug, I told you I wasn’t seeing you. If this matter is in regards to the same thing, I’m not seeing any of you right now. And I - - I allowed one of the individuals five minutes. And after I listened to him for five minutes and heard the same thing that he wanted, I said, hey, I’m not discussing this anymore, leave the office. And I had the commissionaire remove them from the office.

Crouching tiger, skulking Nagel! Sadly, this encounter seems basically irrelevant to the case.

Most of Nagel’s arguments devolve on statutory interpretation. He argued the court had no jurisdiction, which was rejected (para. 27). Nagel’s argument that tax legislation is unconstitutional had already been addressed by other courts
(paras. 28-30). A more quirky argument that is popular in Canadian OPCA circles is that unless one can produce a hardcopy, “official” version of legislation, it doesn’t exist. The idea is that legislation that is often updated (i.e., tax legislation) is therefore miracled out of existence. Sadly for Nagel, this too had often been tried and already rejected (paras. 31-33). Nagel also argued the authority to send him notices had not been properly delegated, again unsuccessful (paras. 36-47).

Nagel is found guilty of failing to take reasonable steps to respond to the CRA’s request for documentation. But would he take that answer? Of course not.

R. v. Nagel, 2009 SKQB 502 (http://canlii.ca/t/275cl)

The Queen’s Bench appeal is very brief and rejects Nagel’s arguments. It does reproduce his 14 grounds for appeal (para. 2). Number 13 is pretty cryptic, at least to me:

13. THAT at the opening of the Trial on April 7th, 2008, after addressing the NOTICE of disclosure and the request for SUBPENA DUES TECUM to be issued to Mr. David J. Marshall, Jackie Osborne and Susan Babey. In the transcript of April 7th, 2008 page 78 liens 10 to 14, The Court stated “It would be a subpoena (ad testificandum), not a subpoena dues tecum.” By denying my request for SUBPENA DUES TECUM prevented my full answer and defence before the court.

R. v. Nagel, 2010 SKCA 118 (http://canlii.ca/t/2cqjh)

The Court of Appeal doesn’t buy it either. Nagel’s argument that “Douglas Martin Nagel” is an “artificial entity” and “… somehow stands or exists as an artificial entity separate and apart from Doug Nagel is self-evidently wrong.” (para. 12). Similarly, the court rejected his claim that legislation cannot be amended (paras. 13-14), that provincial courts cannot hear criminal matters (paras. 15-17), that the title of documents from the CRA are critical to their validity (paras. 18-19), that printed legislation without a coat of arms is inherently invalid (paras. 20-21), and that the Excise Tax Act is unconstitutional (para. 22).

Nagel and an associated company “Nagel’s Debt Review Inc.”, at one point appears to have “purchased” assets in an attempt to shelter them from CRA tax collection. Breitkreuz v Breitkreuz, 2011 SKQB 366 (http://canlii.ca/t/fnc00) reports Nagel’s unsuccessful attempt to revive and take control of an action where two brothers disputed ownership of a dairy herd and milk quotas. The decision does not address the substance of the scheme, this is simply a procedural matter.

Nagel also makes an appearance in R. v. Lemieux, 2007 SKPC 135 (http://canlii.ca/t/1twnt), which is a rather typical Detaxer proceeding. Nagel’s contribution (after he was refused permission to represent Lemieux) was a document entitled “Fuctum” (para. 15):

This undated document was presumably filed by the accused. I will give the accused the benefit of the doubt that he simply misspelled the word “Factum” on the cover page of the document and did not intend otherwise to be offensive or disrespectful. This document consists of materials obviously received from or prepared by a Douglas M. Nagel. It is of interest that Mr. Nagel attempted to represent the accused on the first return date of this matter, knowing that he was the subject of an injunction obtained by the Law Society of Saskatchewan on November 27, 2002 enjoining him from, among other things, practicing at the Bar of any court of civil or criminal jurisdiction. I refused to allow Mr. Nagel to represent the accused. The document in question deals with unsuccessful attempts to obtain a certified copy of the Income Tax Act. I ruled that this was a matter to be dealt with in closing argument after all the evidence had been heard.

This decision features another curious legal expert, “Lovey Cridge, a retired certified management accountant”. Her special contribution was research to establish there never was an Income Tax Act of 1948: paras. 31-33. Which was irrelevant.

Another unsuccessful attempt to use Nagel as an expert (nutjob) witness is reported in Dirks (Re), 2007 SKQB 124 (http://canlii.ca/t/1rc3m) at paras. 4-5. This decision has the CRA attempt to recover large sums from a pair of bankrupt senior citizens who had made very ill-chosen investments that generated large tax obligations ($141,835 for Eldin Dirk, $63,377 for Olive Dirk). It appears Nagel’s argument once more was on jurisdiction. The Dirks took a more … theological approach (para. 6):

On September 29, 2004, the bankrupts wrote to a representative of the objecting creditor reiterating their refusal to pay income tax. A flavour of this position can readily be captured from the following two paragraphs of this letter which read:

• Greetings and salutations from Eldin and Olive Dirks, bonded servants in life of Jesus the Christ in the kingdom of God Almighty, redeemed by the sacrifice of his blood which covers us by His acceptance. His saving grace has redeemed us from the charge of any debt as a debtor to any claim. It has been offered to us by your agents, Cameron Tees and Dennis Sarvajc that you have a claim for which they have come forward to notice us in the names of ELDIN DIRKS and OLIVE DIRKS on assessments with your name at the bottom.
  
  …
  
  We as living flesh and blood, man and woman, known as Eldin and Olive Dirks can only provide you with a true credit to settle and close the account as we are not debtors and do not deal in debt to discharge matters as that would be serving another master, the debtor (SATAN) and we are bound and washed of debt by the blood of our Lord Jesus Christ who has redeemed us of all debt.

Registrar Herauf responds at para. 7 to another classic OPCA motif, that citizens are shareholders in Canada:

… Apparently, it is the bankrupts’ contention that, as citizens of Canada, they are entitled to a pro-rated share of the value of Canada which can be set off against the “alleged” debt owing to the objecting creditor. I need add nothing further to this brief recitation of the bankrupts’ misguided beliefs. It is pure unadulterated rubbish!

The Dirks are ordered to pay up a slice of their debt prior to discharge of their bankruptcy: paras. 12-16.

That’s about all I could find about Nagel. The Leader Post article linked above comments on many of these cases, and on Nagel and his compatriots, as well as aspects of the Detaxer community, in this case a Poriskyite:

One of the De-Tax Group founders was a B.C. man who went by the name Sir Laurence Leupol. But the CRA maintains there are no loopholes. (And Leupol, himself, was eventually fined for failing to file his income tax returns.) Once the cases started surfacing, the CRA took the unusual step of issuing information to debunk what it calls "tax myths" and state unequivocally that income tax is not voluntary; it is constitutional; you must pay up whether or not you are a "natural person" or an "artificial person"; and there is no such thing as a GST-exemption card.

Our friends at the Church of the Ecumenical Redemption International (viewtopic.php?f=47&t=9261) also get a mention:

"A number of these Saskatchewan individuals claim to belong to what they call the Church of Ecumenical Redemption," … An "ecclesiastical notice" placed in Kamsack's newspaper said members of the Church of Ecumenical Redemption had an agreement which includes "free passage in a private auto for performing all ministerial functions without need of a commercial licence or registration."

Nagel places himself outside the Detaxer community, but as the review above illustrates, he’s using many of their motifs:

From Doug Nagel's standpoint (or Douglas-Martin: Nagel as it has appeared in some documents), that's only because not everyone understands the nuances of the law.

"The public must be aware of what's taking place," he says as he speaks about "ambiguities" in and "purported copies" of the Income Tax Act, "private contracts in the man or woman," and case law he believes shows the provincial court has no jurisdiction over federal acts.

Asked about the unusual punctuation in names, Nagel says it "really isn't important." But he adds the key is capital letters, since commerce, like income tax, is dealt with in capital letters.

To be clear, Nagel says emphatically that he is not a "de-taxer."

"I don't have any relationship with persons in a de-tax group or anything else." However, the Regina senior's name has cropped up in a number of tax protest cases, as an adviser, potential witness or assistant preparing and filing documents.

"Do I have an interest, and do I do work for individuals that have been in court? Yes I do," he says, conceding later that he and those in the de-tax movement may advance similar arguments at times.

I looked for an obituary but did not find one. If Nagel is still kicking and litigating then he's about 81. An interesting retirement, I suppose. Similarly, I found no online presence for his various companies.

SMS Möwe

[notorial dissent]

Isn't an Amateur Forensic Accountant kind of like an Amateur Brain Surgeon? Kind of an oxymoron and all that, particularly when you don't seem to even be a real accountant to begin with.

[Famspear]

The 76-year-old says he has four decades of practical and field experience operating an accounting company -- "you can't get that training in any university or any school" -- but no degree.

And, as unpleasant as it may be for those without formal training to hear, it is just as true to say that you cannot get the knowledge obtained from four years of formal training in accounting at the college or university level through "four decades of practical and field experience", etc., in accounting.

Some people without formal credentials resent people who have credentials, but the fact is that both formal training and extensive experience have their places. In parts of four decades in which I have practiced public accounting (both as an auditor of financial statements and as a tax practitioner), I have never once prepared a consolidated financial statement (I've prepared tax returns that required consolidation, though). However, I know how to prepare a consolidated financial statement. And the reason for that is that I had one entire accounting course in consolidated statements in college and part of another course -- and I was required to study even more after college so that I could show competency in (among many other things) the preparation of consolidated financial statements -- on something called the Uniform Certified Public Accountant Examination.

When someone says he or she has years of experience, I respond with: "Doing what?" For example, a non-degreed bookkeeper who has spent twenty years doing nothing but payroll and payroll tax work would be totally lost if confronted with the task of preparing consolidated financial statements of multiple companies in conformity with generally accepted accounting principles -- something that a "green" accountant just out of college with a bachelor's degree in accounting should be able to handle.

Some exceptional people have become fabulously wealthy without having earned credentials such as college degrees through the normally accepted processes (people like Bill Gates, Michael Dell, David Geffen, etc., come to mind).

That does not necessarily mean, however, that many years of experience will trump a few years of formal training in every case.

[webhick]

When someone says he or she has years of experience, I respond with: "Doing what?" For example, a non-degreed bookkeeper who has spent twenty years doing nothing but payroll and payroll tax work would be totally lost if confronted with the task of preparing consolidated financial statements of multiple companies in conformity with generally accepted accounting principles -- something that a "green" accountant just out of college with a bachelor's degree in accounting should be able to handle.

I've never encountered a situation where a bookkeeper-prepared financial statement was acceptable for anything but shits and giggles.