Oil firm evaded tax and 'washed' diesel

A Wexford oil distributor has admitted having laundered diesel and making a series of incorrect VAT returns.

Rosslare Oil Ltd, which went into liquidation last September, and director Mr John Devereux each admitted 12 charges at a sitting of Enniscorthy District Court.

The court heard that the company was one of a number of fuel suppliers and retailers targeted by the Customs and Excise in an exercise to identify people involved in the sale and distribution of laundered, or washed, diesel.

The prosecution brought by the Revenue Commissioners and the Customs and Excise dates back to June 2002, when customs officials visited the company's depot and took samples from diesel on site.

Tests on the samples showed that the marked gas oil had been tampered with and the marker removed to make it appear like ordinary diesel which sells for around double the price of marked gas oil and on which higher excise duty is liable.

Around 9,600 litres of the diesel was removed from the premises in Rosslare Harbour.

Subsequent investigation by the Revenue revealed that the company and its directors had incorrectly claimed VAT credits on purchases of fuel in five separate two-month periods between January/February of 2002 and May/June of 2003.

Mr Noel Wall, an inspector of taxes attached to the Revenue's investigations and prosecutions division, told the court the company also owned VAT on sales that were incorrectly recorded.

He said invoices removed from the company's offices had been shown to three different suppliers who had apparently issued them. The suppliers told Revenue inspectors that they had never issued the invoices in question nor had they done any business with Rosslare Oil or Mr Devereux.

Mr Wall told the court that it appeared VAT had been claimed in respect of fictitious purchases. The sum involved over the five separate periods totalled €46,111.

In the May/June 2003 period, company records showed the company had charged customers VAT at 21 per cent but recorded just 13.5 per cent in company records. The sum involved was €1.734.

Separately, Mr Wall said, the company had paid out €326,956 through 35 cheques to fictitious suppliers. Mr Wall told the court the Revenue was unable to trace where this money went. It did not go to a supplier but Mr Devereux was unable to tell them where it had gone.

In the circumstances, Mr Wall said, the Revenue held Mr Devereux liable for tax at 42 per cent on the sum involved, a liability of €137,319.

The court heard that Rosslare Oil went into liquidation in September last year. A statement of affairs produced by the directors declared that, at the end of August last, the company had a deficiency of €197,203.

The total amount of tax foregone was €185,164, the court was told and penalties of 100 per cent, plus interest, could be expected to be levied in such a case, the Revenue said.

Mr Devereux and Rosslare Oil admitted five offences of evading or attempting to evade excise duties. They also admitted five charges of knowingly and willingly delivering incorrect tax returns, a charge of failing to keep proper records and a charge of failing to produce records.

The case was adjourned for sentence on March 9th.