THE CONCLUSIONS: This is an edited version of the summary of conclusions contained in the Inspectors' report:
Ansbacher (Cayman) Limited
The Inspectors investigated the affairs of Ansbacher in accordance with the terms of reference set out by the Order of the High Court of September 22nd 1999.
The Inspectors traced the evolution of the company from its incorporation in 1971 to the winding down of the Irish business in the mid-1990s. Based on the evidence before them, the Inspectors found that:
1. The "memorandum account" system was operated by Guinness and Mahon and GMCT (Guinness Mahon Cayman Trust Ltd) in a deliberately complex and secretive manner which concealed the names of the clients involved while allowing them to lodge and withdraw funds to and from accounts held nominally for GMCT.
2. Loans were obtained from Guinness and Mahon for GMCT clients on the security of their GMCT deposit, while the existence of this deposit was deliberately omitted from the loan agreement documentation and therefore the general regulatory system of Guinness and Mahon where it would have been seen by bank and Revenue auditors.
3. Ansbacher had established places of business within the State, being at first the premises of Guinness and Mahon and later the premises of CRH plc.
4. Ansbacher knowingly breached Sections 352, 353, 355 and 357 of Part XI of the Companies Act, 1963.
5. Ansbacher carried on banking business in Ireland without holding a licence to do so, which conclusion leads the Inspectors to further conclude that there is evidence tending to show that Ansbacher breached Section 7 of the Central Bank Act, 1971 (as amended).
The Inspectors found further that there was evidence tending to show that:
6. The discretionary trust structure as operated by GMCT in conjunction with Guinness and Mahon - through its policy of concealing the true object of the trust, the retention of control by the prime mover over the assets of the trust and the access to the funds provided to the prime mover who could withdraw funds in Dublin - amounted to a sham trust structure. There is also evidence to show that the discretionary trust scheme facilitated widespread tax evasion.
7. That the affairs of Ansbacher were conducted with intent to defraud a creditor of some of its clients, that is the Revenue authorities.
8. That Ansbacher may have committed a number of criminal offences, namely:
a) the common law offence of conspiracy (with, inter alia, some of its clients) to defraud, and
b) the offence of knowingly aiding, abetting, assisting, inciting or inducing another person to make or deliver knowingly or wilfully any incorrect return, statements or accounts in connection with their tax contrary to the provisions of the appropriate tax legislation, now consolidated in Sections 1056 and 1078(2) of the Taxes Consolidation Act, 1997.
9. That Ansbacher breached Section 5 of the Finances (Miscellaneous Provisions) Act, 1968 by failing to deliver to the Revenue Commissioners a statement in writing containing the particulars set out therein.
10. That Ansbacher breached Sections 141 and 142 of the Corporation Tax Act, 1976.
11. That Ansbacher failed to pay Corporation Tax lawfully due.
12. That Ansbacher breached Section 31 of the Finance Act, 1974.
13. That Ansbacher failed to make deductions from payments to employees, contrary to Section 126 of the Income Tax Act, 1967 (now Section 985 of the Taxes Consolidation Act, 1997).
14. That Ansbacher may have been in breach of Section 10(a) of the Cayman Islands Banks and Trust Companies Law, 1989 (as amended).
Mr Desmond Traynor
The report examines the responsibility of Mr Desmond Traynor for the wrongdoing of Ansbacher (Cayman) Limited. Based on the evidence before them, the Inspectors conclude that there is evidence tending to show that:
1. Mr Traynor facilitated the operation of sham trusts on behalf of Ansbacher's clients.
2. Mr Traynor facilitated the carrying on of a banking business by Ansbacher and Hamilton Ross in Ireland without a licence.
3. Mr Traynor knowingly and wilfully permitted Ansbacher, while carrying on business in Ireland, to breach Sections 352, 353, 355 and 357 of Part XI of the Companies Act, 1963.
4. Mr Traynor knowingly and wilfullly facilitated Ansbacher and Hamilton Ross to conduct their affairs in Ireland in such a manner as to intentionally defraud the Revenue authorities.
5. Mr Traynor improperly used subordinates in the unlawful activities of the business of Ansbacher and Hamilton Ross.
6. Mr Traynor approved of and participated in the making of payments to Mr Collery and Ms Williams without the deduction of the appropriate tax.
7. Mr Traynor facilitated Ansbacher and Hamilton Ross in the evasion of their Corporation Tax liabilities.
8. Many of the aforementioned actions of Mr Traynor may constitute evidence tending to show the commission of criminal offences.
Mr John Furze
Based on the evidence before them, the Inspectors conclude that there is evidence to show that Mr Furze conspired with his fellow-director Mr Traynor to conduct Ansbacher's affairs with intent to defraud the Revenue Commissioners.
This conclusion may constitute evidence tending to show the commission of criminal offences.
There is also evidence to show that Mr Furze consented to or approved of the carrying on of an unlicensed banking business by Ansbacher in Ireland.
Mr John Collins
The report examines the responsibility of Mr John Collins for the wrongdoing of Ansbacher (Cayman) Limited. Based on the evidence before them, the Inspectors conclude that:
1. Mr Collins must take his share of the responsibility, as one of the three early directors, for the consequences of management decisions made in its initial years, and in particular for the decision to open and maintain the GMCT accounts in Guinness and Mahon, which, the Inspectors have concluded, were operated in such a way as to defraud the Irish Revenue Commissioners.
2. There is evidence tending to show that Mr Collins shares responsibility for Ansbacher conducting unlicensed banking business in Ireland.
Guinness and Mahon (Ireland) Limited ('Guinness and Mahon')
Based on the evidence before them, the Inspectors conclude that there is evidence to show that, from 1971 to 1991:
1. Guinness and Mahon conspired with Ansbacher to defraud a creditor of Ansbacher's clients, namely the Revenue Commissioners, and that there is therefore evidence tending to show that Guinness and Mahon may have committed the offence of conspiracy to defraud contrary to common law.
2. Guinness and Mahon may have committed the offence of knowingly aiding, abetting, assisting, inciting or inducing another person to make or deliver knowingly or wilfully any incorrect return, statements or accounts in connection with their tax contrary to the provisions of the appropriate tax legislation, now consolidated in Sections 1056 and 1078(2) of the Taxes Consolidation Act, 1997.
3. Guinness and Mahon aided and abetted Ansbacher to carry on a banking business in Ireland without a licence to do so, as required by Section 7 of the Central Bank Act, 1971 (as amended).
4. Guinness and Mahon was an accessory to the carrying on of Ansbacher's unlicensed banking business within the State, and that there is therefore evidence tending to show that Guinness and Mahon may have committed an offence of carrying on an unlicensed banking business in Ireland contrary to Section 7 of the Central Bank Act, 1971 (as amended).
Guinness Mahon & Company Limited ('Guinness Mahon London')
Guinness Mahon London failed to co-operate with the Inspectors as required by Section 10(2) of the Companies Act, 1990 and the Inspectors therefore recommend that consideration should be given by the appropriate authorities as to whether an application should be made for disqualification orders in respect of the directors of Guinness Mahon London, pursuant to Section 160(2)(e) of the Companies Act, 1990.
Investec Bank (UK) Limited
The Inspectors conclude that Investec Bank (UK) Limited, as the current owners of Guinness Mahon London, failed to co-operate with them as required by Section 10(2) of the Companies Act, 1990 and the Inspectors therefore recommend that consideration should be given by the appropriate authorities as to whether an application should be made for disqualification orders in respect of the directors of Investec Bank (UK) Limited, pursuant to Section 160(2)(e) of the Companies Act, 1990.
Henry Ansbacher Holdings plc
Based on the evidence before them, the Inspectors conclude that Henry Ansbacher Holdings plc bears responsibility for the continuation of the carrying on of unlicensed banking business in Ireland by Ansbacher after October 1991.
First National Bank of Southern Africa ('FNBSA')
The Inspectors conclude that, taking into account the fact that all of Ansbacher's Irish business was wound down by FNBSA between the time that they acquired the Company and before the commencement of the McCracken Tribunal, it would be unfair to categorise FNBSA as having equal responsibility with others for the conduct of Ansbacher's unlicensed banking business.
CRH plc
The report examines the assistance provided by CRH to Ansbacher (Cayman) Ltd. Based on the evidence before them, the Inspectors conclude that:
1. CRH provided assistance to Ansbacher (Cayman) Ltd in the carrying out of its business in Ireland. This assistance cannot be said to have been given knowingly, having regard to the legal principles concerning corporate knowledge, but it is a matter for which CRH must bear some responsibility.
Bank of Ireland Private Banking Limited ('BOIPB')
The report examines the assistance provided by BOIPB to Ansbacher (Cayman) Ltd. Based on the evidence before them, the Inspectors conclude that:
1. By their failure to raise questions about the residential status of the beneficial owners of the relevant accounts, BOUPB assisted Ansbacher (perhaps unwittingly) in concealing the fact that Irish residents were the owners of the funds in the relevant accounts, and thus - again, perhaps unwittingly - assisted Ansbacher to conduct Ansbacher's business so as to defraud a creditor of Ansbacher's clients, namely the Revenue Commissioners.
Mr Padraig Collery
Based on the evidence before them, the Inspectors conclude that there is evidence to show that:
1. From 1989 to May 1994, Mr Collery assisted Ansbacher in carrying on an unlicensed banking business, in breaching Sections 352, 353, 355 and 357 of Part XI of the Companies Act, 1963, in evading tax due on its own activities and in assisting others to evade tax.
2. From 1989 to May 1994, Mr Collery knowingly assisted Ansbacher in conducting its affairs in the State so as to defraud a creditor of some of its clients, namely the Revenue Commissioners.
3. From late 1992/early 1993 to 1995, Mr Collery also knowingly assisted Hamilton Ross in operating its unlicensed banking business in Ireland, in its breaches of Sections 352, 353, 355 and 357 of Part XI of the Companies Act, 1963, in evading tax due on its own activities and in carrying on business in the State in such a manner as to defraud a creditor of some of its clients, namely the Revenue Commissioners.
4. From 1989 to 1995, Mr Collery may have committed: (a) the common law offence of conspiracy to defraud, and (b) the offence of knowingly aiding, abetting, assisting, inciting or inducing another person to make or deliver knowingly or wilfully any incorrect return, statements or accounts in connection with their tax contrary to the provision of the appropriate tax legislation now consolidated in Sections 1056 and 1078(2) of the Taxes Consolidation Act, 1997.
Ms Joan Williams
Based on the evidence before them, the Inspectors conclude that Ms Williams would have acquired some level of understanding that the Ansbacher scheme had a tax evasion dimension.
However, her position within the hierarchy of the firms in which she worked and the complicated nature of the issues involved would have effectively rendered her powerless to oppose Mr Traynor's course of action.
Mr Sam Field-Corbett
The report examines the assistance provided by Mr Sam Field-Corbett to Ansbacher (Cayman) Ltd. Based on the evidence before them, the Inspectors conclude that there is evidence to show that:
1. From 1994 to 1997, Mr Sam Field-Corbett may have acted in breach of Section 7 of the Central Bank Act, 1971 (as amended), by aiding and abetting in the manner envisaged by Section 8 of the Accessories and Abettors Act, 1861 and/or Section 7(1) of the Criminal Law Act, 1997, thereby rendering himself responsible as a principal offender.
2. Mr Field-Corbett assisted Hamilton Ross in breaching Section 355(b) of Part XI of the Companies Act, 1963.
Mr Jack Stakelum
Based on the evidence before them, the Inspectors conclude that:
1. Mr Stakelum assisted Ansbacher in the carrying out of its Irish business, but that this assistance was unknowing.
2. There is evidence tending to show that Mr Stakelum, in undertaking knowingly his deposit taking activities, may have committed a number of criminal offences as follows:
( a) The common law offence of conspiracy to defraud; (b) The offence of knowingly aiding, abetting, assisting, inciting or inducing another person to make or deliver knowingly or wilfully any incorrect return, statement or account in connection with their tax, contrary to the provisions of the relevant tax legislation now consolidated in Sections 1056 and 1078(2) of the Taxes Consolidation Act, 1997; (c) That, in accepting deposits from and effecting withdrawals on behalf of his clients, Mr Stakelum may have carried on a banking business within the meaning of the provisions of the Central Bank Act, 1971 (as amended) and 1989, and that he did so without the requisite licence.
IIB
Based on the evidence before them, the Inspectors conclude that:
1. IIB provided assistance to Ansbacher between 1991 and 1997, which enabled Ansbacher to continue its operations in the State. There was a substantial body of knowledge within IIB concerning the nature of the Ansbacher operations, but this knowledge was not concentrated in such a way as to enable corporate knowledge to be imputed to IIB.
2. IIB provided assistance to Hamilton Ross between 1991 and 1997, which enabled Hamilton Ross to continue its operations in the State. There was a substantial body of knowledge within IIB concerning the nature of the Hamilton Ross operations, but this knowledge was not concentrated in such a way as to enable corporate knowledge to be imputed to IIB.
Hamilton Ross Company Limited ('Hamilton Ross')
Based on the evidence before them, the Inspectors conclude that, between 1992 and early 1997, Hamilton Ross carried on banking business in Ireland without holding a licence to do so, which leads the Inspectors to further conclude that there is evidence tending to show that Hamilton Ross breached Section 7 of the Central Bank Act, 1971 (as amended).
The Inspectors further conclude that there is evidence tending to show that Hamilton Ross was guilty of a number of criminal offences, namely:
(a) the common law offence of conspiracy (with, inter alia, their clients) to defraud, and
( b) the offence of knowingly aiding, abetting, assisting, inciting or inducing another person to make or deliver knowingly or wilfully any incorrect return, statement or account in connection with their tax, contrary to the provisions of the relevant tax legislation now consolidated in Sections 1056 and 1078(2) of the Taxes Consolidation Act, 1997.
The Central Bank of Ireland
The report examines the Central Bank as a related matter. Based on the evidence before them, the Inspectors conclude that:
1. A combination of the misleading information furnished by Guinness and Mahon and in particular by Mr Traynor and a failure on the part of the Bank to test, appraise and gather the information available to it resulted in the true nature of Ansbacher's activities going undetected for longer than ought to have been the case.
Failure to co-operate with the Inspectors
The report examines, as a related matter, the issue of those who failed to assist the Inspectors in this Inquiry.
The Inspectors conclude that the following persons failed to co-operate as required under Section 10(2) of the Companies Act, 1990 and they issue a recommendation to the appropriate authorities that they consider whether an application should be made for a disqualification order, pursuant to Section 160(2)(e) of the Companies Act, 1990, in respect of each of the following persons:
1. Mr Stephen Enoch
2. Mr Bernard Etzin
3. Mrs Nora Shanahan
4. Mr Michael J Shanley
5. Mr Martin Turley
6. Mr John Murphy
7. The individual members of the board of Guinness Mahon & Company Ltd, London
8. The individual members of the board of Investec Bank (UK) Limited.