Ruling on 'carousel' VAT fraud case reversed

The High Court has overturned a District Court order directing the the Criminal Assets Bureau (Cab) to produce to the UK authorities a number of documents seized by the Cab here around the time of an investigation into an alleged stg£100 million (€148.5 million) VAT "carousel" fraud in the UK.

The documents were seized from the home and company offices of a Co Clare man, Mr Dylan Creaven, of Woodstock View, Ennis, sent later to the UK for proceedings involving Mr Creaven on charges connected to the alleged fraud and then returned to the Cab following Mr Creaven's acquittal on all charges.

The documents had been sought by the UK authorities for separate proceedings involving another man, Mr Yogesh Pala. Those proceedings have since collapsed. The UK authorities had returned the documents in question to the Cab but wanted them back to meet discovery obligations in the proceedings related to Mr Pala.

Mr Creaven was arrested in London on November 19th, 2002. After being remanded in custody for almost a year, he was later freed on bail on charges in connection with the alleged VAT fraud which, it was claimed, involved high-value computer components and the alleged movement of those goods in a circle between various com-panies to generate VAT payments that were not declared to the UK authorities.

Mr Creaven and his companies had denied the claims and he has since been acquitted on all 28 charges in court proceedings in England.

He recently made a €26.8 million settlement with the UK and Irish authorities agreeing to pay the Cab and the British Assets Recovery Agency stg£18 million and to hand over a villa in Marbella and four racehorses.

In proceedings before Mr Justice Frank Clarke, lawyers for Mr Creaven objected to the documents seized from his home and company premises being returned to the UK authorities. It was argued there was no jurisdiction to make such a production order in aid of substantive criminal proceedings in a foreign jurisdiction which might, theoretically, give rise to a confiscation order in the event of a conviction.

It was also argued that production orders could only be made to assist foreign prosecuting authorities in a post conviction confiscation process rather than for a substantive criminal trial.

Yesterday, Mr Justice Clarke outlined his reasons for directing last July that a production order made by a district judge on June 10th, 2006, in response to a request from the UK authorities should be quashed.

Mr Justice Clarke said that, in order to justify the making of a production order, there must be an investigation into whether a person has benefited from an offence in relation to which a confiscation order might be made.

The natural meaning of the relevant law concentrates on the investigation into the benefit.

Dylan Creaven Profile: Weekend