Amway whistle-blower sues feds
Dorothy Edgar, 67, says Revenue Canada didn't make good on a deal to pay her for information
By Roseann Danese
Star Court Reporter
FROM "THE WINDSOR STAR"
A 67-YEAR-OLD CHICAGO WOMAN has launched a $12-million lawsuit against the Canadian government, claiming Revenue Canada reneged on a promise to share with her the millions it recovered in the Amway Corp. tax evasion scam.
Dorothy Edgar, a former executive secretary for a top Amway executive, is suing the government and an investigator with Revenue Canada for failing to make good on an alleged agreement to pay her for the information she provided.
The suit claims she was entitled to $7 million, or 10 per cent of what the Canadian government recouped from Amway Corp. and its Canadian subsidiary Amway of Canada Ltd. for the evasion of taxes. Another $5 million is being sought in punitive damages.
The lawsuit will be heard in Windsor because Edgar is represented by local civil litigation lawyer Harvey Strosberg.
"She's been devastated by this," Strosberg said. "She expected to be treated fairly. She was eligible for an award. She should have been paid an award."
Seen as key player
Strosberg said Edgar was a key player in criminal and civil proceedings launched by the government against Amway Corporation in the early 1980s as a result of an investigation into the company's practices.
Amway, with its corporate headquarters in Ada, Mich., had been evading duties and taxes by using false invoices to misrepresent the value of its products being shipped across the border. The investigation led to fraud charges, to which the firm pleaded guilty in November 1983 and was fined $25 million.
A lawsuit filed by the Canadian government was settled out of court in 1989 and Amway was required to pay $45 million.
According to court documents, Edgar agreed to co-operate with Dwight St. Louis, an investigator with Revenue Canada, when no one else would. "She copied documents and gave them to him," Strosberg said. "There's a critical memo she produced. She was the key person."
Edgar claims she has lived a life of misery since she helped the Canadian government. She's been unable to find work since the 1980s because she's seen as a "whistle-blower" who helped uncover a scam involving very powerful people in the U.S.
Living in fear
"Whistle-blowers don't get jobs," Strosberg said. "She's never really worked ... since then."
She also lives in hiding and fears there are people who want to hurt her for what she's done.
"She is very frightened about this whole thing," according to Don Soeken, who runs Integrity International, a Washington-based non-profit group that helps whistle-blowers.
"She shouldn't have talked. She should have said the heck with you people, you're going to use me and then throw me aside and you will have to get your information some other way."
Edgar was the executive secretary to Edward Engel, Amway's vice-president of finance. In late 1977, Engel learned of the fraudulent practices and urged his company to disclose to Revenue Canada what was happening. Amway refused and as a result Engel and Edgar resigned in January 1979.
In February of that year, Revenue Canada caught wind of the scam.
St. Louis was assigned to investigate. He approached Engel, who initially refused to assist but eventually agreed to talk.
St. Louis told Edgar she would be paid between five and 10 per cent of whatever amounts were recovered in Canada from Amway, according to Edgar's statement of claim. Payments to informants could be made under provisions in the Customs and Excise Award Payment Regulations, which was in force until May 1986.
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