Two of the revenue department workers have been arrested and two others suspended without pay, the Toronto Star reported. Police executed search warrants against them Tuesday, the newspaper said.
The companies -- all run by Antonio Accurso -- are Simard-Beaudry Construction Inc., Construction Louisbourg Ltee. and Hyprescon. Accurso is said to have close personal ties to Montreal city and Quebec's largest union, La Federation des travailleurs et des travailleuses du Quebec.
The revenue department alleges the companies ran nearly $4.5 million through dummy businesses used to issue false invoices.
The department employees arrested by the Royal Canadian Mounted Police for tax fraud were identified as "team leaders" alleged to have made sure the bogus businesses would not be audited, said Patrice Chouinard, director of the agency's Montreal Tax Services Office.