Court asked to impose maximum disqualification on director

Company director admits role in fraudulent scheme to avoid paying VAT on €8m of machinery

It is claimed VAT due on the goods bought in the UK by Kevin Rabbitte was not paid to Revenue when the machinery was subsequently sold on in Ireland.  The Four Courts. Photograph: Chris Maddaloni/Collins

It is claimed VAT due on the goods bought in the UK by Kevin Rabbitte was not paid to Revenue when the machinery was subsequently sold on in Ireland. The Four Courts. Photograph: Chris Maddaloni/Collins

 

The High Court has been asked to impose the maximum disqualification period possible on a company director who has admitted his role in a fraudulent scheme to avoid paying VAT on some €8 million of machinery.

The application concerns Kevin Rabbitte, a director of Westman Plant and Civils Limited, which was put into liquidation in 2017.

The company’s VAT number was used to import plant and machinery, mainly from the UK, into Ireland between July 2014 and June 2015. It is claimed VAT due on the goods bought in the UK by Mr Rabbitte was not paid to Revenue when the machinery was subsequently sold on in Ireland.

The company never declared its purchases or any subsequent sales for VAT purposes and filed nil VAT returns for the relevant period, it was claimed.

Westman also failed to file returns to the Companies Registration Office and was eventually struck off the Register of Companies.

The application to disqualify Mr Rabbitte, of Clonberne, Ballinasloe, Co Galway, was brought by the company’s liquidator, Myles Kirby.

Arising out of his investigations, Mr Kirby claimed Mr Rabbitte had knowingly participated in a fraud known as “carousel fraud” or Missing Trader Intra-Community VAT Fraud.

Machinery auctions

The court heard Mr Rabbitte had said he was asked on behalf of an unnamed individual to attend machinery auctions in the UK where he would bid for the machinery and, if successful, use Westman’s VAT number to acquire the goods.

Mr Rabbitte had said the individual in question would then pay him a commission.

On Tuesday, as the application to have Mr Rabbitte disqualified was due for hearing, John Kennedy SC, for the liquidator, told Mr Justice Brian O’Moore that, “at the 11th hour”, Mr Rabbitte was consenting to certain orders.

Mr Rabbitte consented to a declaration that, as an officer of the company, he knowingly carried out business on behalf of Westman with the intention to defraud the firm’s creditors, including the Revenue Commissioners.

He consented to being made personally responsible for €1.5 million of the company’s debts and liabilities and to being disqualified from acting as a company director for a period to be decided by the court.

Mr Kennedy, with Sally O’Neill, said Mr Rabbitte’s actions were very serious and the court should consider the longest period of disqualification possible.

Solicitor Robert Dore, for Mr Rabbitte, asked that the period of disqualification be set in the low to medium range.

‘Draconian’

The proposed disqualification and agreement to be liable for up to €1.5 million of the firm’s debts were “draconian” matters his client had agreed to do, Mr Dore said.

By his consent to orders, Mr Rabbitte had avoided the costs of a hearing expected to last several days, Mr Dore said.

He agreed with the judge Mr Rabbitte’s case was that his actions were on behalf of an unnamed third party for whom the machinery was bought and for which Mr Rabbitte was paid a commission.

Mr Dore also agreed the third party had not been named by Mr Rabbitte, who was “petrified” of that person.

The judge will rule later this week on the disqualification period.