Anglo paid €3m tax bill for ‘bogus’ accounts, court hears

Anglo Irish Bank paid more than €3.1 million in settlement of a Deposit Interest Retention Tax (Dirt) bill after an audit by revenue in 2003, the trial of three former officials at the bank has heard.

The money was paid in settlement of tax due, plus penalties and interest, for bogus non-resident accounts held at the bank between 1986 and 2003, revenue officials told the court.

Aoife Maguire (63) of Rothe Abbey, South Circular Road, Kilmainham, Dublin, Bernard Daly (67) of Collins Avenue West, Whitehall, Dublin and Tiarnan O’Mahoney (56) of Glen Pines, Enniskerry, Co Wicklow have been charged with trying to hide accounts, connected to the former chairman of the bank, Sean FitzPatrick, from Revenue between March 2003 and December 2004.

They have pleaded not guilty.

The court had heard that Dirt did not have to be paid on accounts held by genuine non-residents. Anglo Irish Bank had previously said it had no bogus non-resident accounts, but several Anglo account holders had come forward following the announcement of an amnesty by revenue in 2001.

Gerard Howard, assistant secretary at revenue, said he was involved with an Anglo audit in 2003 and 2004. He confirmed the bank had paid more than €3.1 million to settle its obligations.

He said he was satisfied when the audit was completed that the bank had met was required of them. He said it was a large settlement relative to a small institution and relative to other banks.

He confirmed, to Sean Guerin SC for Mr Daly, that during the course of a meeting in early 2003, to discuss a High Court order seeking disclosure of non-resident accounts at the bank, one bank official Brian Gillespie, had told him Anglo didn’t have computer records for 1990 or 1995.

Asked if he was concerned, Mr Howard said he had serious concerns because in the past, things had been said to him that proved not to be true.

Mr Howard also agreed it was impossible for revenue to spot that an account held by Mr FitzPatrick’s brother-in-law, John Peter O’Toole, that had been included in the High Court order, was missing from the revenue audit.

Also giving evidence on Thursday, revenue assistant principal officer Anthony Rice, said a deposit account in the name of Mr O’Toole should have been included in the audit of 2003/2004.

The account held over IR£138,000, and revenue had sought details of all non-resident deposit accounts that contained over IR£100,000 on March 31st 1990, 1995 and 1999. It also sought details of a percentage of accounts with smaller sums. He said the audit began on November 10th 2003 and finished on July 1st, 2004.

Mr Rice confirmed to Dominic McGinn SC, for the prosecution, that the audit list provided by the bank for March 31st, 1995 included 75 personal deposit accounts of more than IR£100,000. He also confirmed that Mr O’Toole’s account contained more than IR£138,875 at the time, but was not included.

Mr McGinn asked him if he would have expected to see it on the list, which was compiled in order of sum size.

“I would say so, yes, it should be there,” Mr Rice responded.

He agreed that if it had been on the list, it would have been fully reviewed by revenue.

Mr McGinn said the focus of the audit was to ascertain if non-resident accounts were bogus or if the holder was genuinely non-resident. Mr Rice agreed.

Mr McGinn showed him documentation with Mr O’Toole’s various addresses including in Kent, London and Australia.

Asked if those documents would have been sufficient to satisfy revenue, Mr Rice said there may have been some question as to the authenticity of the addresses.

Asked if he could tell whether Mr O’Toole’s account would have created a Dirt liability, Mr Rice said he did not think it was possible to ascertain at this remove.

Under cross examination, Mr Rice said there was no facility for cross checking the information received by Revenue on foot of the High Court order with the information received by his audit team.

But shown minutes of a number of meetings which referred to such cross referencing, he said it seemed to be the case that information was cross-checked.

Mr Rice also told the court a huge amount of information had been received by the Revenue Commissioners and it took them weeks to sift through it.

The case continues on Friday before Judge Patrick McCartan and a jury of six men and six women.