An Irishman behind a £100 million VAT fraud was arrested in a dawn raid on the London hotel room he was sharing with his mistress, a court heard yesterday.
The former Fine Gael TD, minister of state and Lord Mayor of Dublin, Mr Michael Keating, also figures in the case.
Customs officials swooped on the Grosvenor House hotel in Park Lane in a "dramatic ending" to the two-and-a-half-year computer fraud run by Mr Daniel O'Connell, the jury heard.
Diaries found in the hotel room and at Mr O'Connell's Limerick home, where his wife lived, allegedly provided evidence of the fraud, which netted almost £20 million in undeclared VAT. A raid on the home of Mr John Dawson uncovered evidence linking the fraud to Mr O'Connell's "partner in crime", Mr Michael Keating, Middlesex Guildhall Crown Court heard.
Mr Keating allegedly played a key role in facilitating the fraud through his company, Irish Semiconductors.
Mr Peter Rook QC, prosecuting, said: "At Dawson's address in Swansea a diary was found containing a list of addresses. There were references to Keating, who appears to have been involved with Irish Semi-conductors.
"There was also a list of telephone numbers relevant to the fraud including . . . Keating's mobile and home numbers."
The court heard that Mr O'Connell (46) avoided paying millions in tax by claiming the computer chips he was buying were bound for Ireland, where VAT is not payable because it is within the EU.
Irish companies, including Irish Semi-conductors, provided bogus paperwork and airline tickets backing up the story, it is claimed. But most of the Intel Pentium II processors never left the UK at all, the court heard.
Instead, Mr Dawson (58) allegedly transported them a few miles away to Keash, a computer firm run by co-defendant Ms Bernadette Devine (33), a former Ealing councillor.
Mr O'Connell sold £100 million worth of the chips to Ms Devine at a loss, giving her the chance to sell them on at a profit, whereas he pocketed the VAT, the court heard. In March last year customs officials moved in and arrested the three defendants.
Ms Devine and Mr Dawson denied any knowledge of the fraud while Mr O'Connell declined to comment. Mr O'Connell, of Catherine Street, Limerick, Mr Dawson of Blackpill, Swansea, and Ms Devine, of Perivale, Middlesex, each deny five counts of tax evasion and one count of cheating the public revenue.
The trial continues.