I never went crazy, or flew around the place
“They used to meet me here in the Quartiere Bloom but now I had to go to their offices. If I rang up, they’d say they would ring back and then put me on speaker-phone. I believed my calls were being recorded.”
Normally, Wallace would have sold off a few apartments to pay the big VAT bill that arose at the end of a development. But the last 10 wouldn’t sell and he tried to buy time: “So I filled in a false VAT return, something I’m going to get murdered for.”
He says he has no complaint with the Revenue’s approach. He couldn’t have paid the tax man anyway because the banks, to whom he has given personal guarantees, would have taken anything.
He was also at loggerheads with his subcontractors, who he owed €3.4 million to. He got this down to about €1 million through negotiation. Ultimately, all the subcontractors were paid but MJ Wallace was fined €7,000 last year for late payment of his workers’ pension contributions.
In October 2010, Wallace went to the Revenue and revealed his under-declaration of VAT. “We opened up our books . . . that’s one of the reasons they didn’t throw the book at me.”
MJ Wallace agreed to pay off its debts to the Revenue in monthly instalments. However, last November ACC Bank secured a €19.4 million judgment against the company.
“That finished us off. When that happens, you don’t tick the boxes any more. You can’t get State work. And we could no longer make the monthly payments.”
Consequently, the Revenue moved to claim its money, and a €2.1 million settlement was agreed last February. Wallace says the Revenue categorised his behaviour as “careless” rather than “deliberate” so the maximum fine wasn’t imposed.
“I don’t feel good about the fact that I owe Revenue that money but it was outside my control.”
The other banks the company owes money to are now closing in. With Wallace’s permission, Ulster Bank is selling properties it funded. Wallace says the Revenue will get €450,000 from these sales and Dublin City Council will get €360,000.
AIB is also looking at selling off property, again with his permission, while Bank of Scotland, which is less exposed, has yet to make a decision.
His wine bars are run by Wallace Calcio Ltd, a separate company. It is tax compliant, he says, though many of the cafes are in buildings that were owned by MJ Wallace but are now being sold. They continue to trade.
He doesn’t understand the rationale of the banks and believes there is serious undervaluation in the property market. A site on which he owes €8 million is on the market for €1 million. Apartments that cost €230,000 to build before site costs are being sold for €100,000.
None of this matters much now, as he is reduced to the role of spectator while his former business is dismembered.
He still lives by his motto “work hard, play hard”, making sure his cafe bars “wash their face” and attending to his Dáil work. “I lived simply. I never went crazy, or flew around the place in a helicopter.”
There remains, too, his lifelong passion for soccer, which will bring him to the European Championships in Poland next week.