Solicitors blocked efforts to get data on accounts

 

Lawyers for the Law Society of Ireland outlined to the High Court yesterday the difficulties the society had in obtaining information on the accounts operated by Dublin firm Roger Greene & Sons.

The court yesterday suspended from practice solicitors Henry Colley and Colm Carroll, who were joint principals in the firm at the time of an investigation by the society into its affairs.

The two solicitors yesterday admitted operating secret accounts in a deliberate bid to evade tax.

Shane Murphy SC, for the Law Society, said its application was based on an affidavit from Mary Devereux, a chartered accountant with the society's regulatory department, who was appointed to investigate the firm's practice in June 2003.

She was unable for some time to complete her investigation because of the lack of information in the firm's books and records and said her investigation continued to be obstructed until the society got a court order against both solicitors in May 2004.

She said there was an apparent shortfall of some €197,000 in the clients' account in June 2003 because client balances were not reflected and client liabilities recorded as being due at December 2001 had just "disappeared".

Ms Devereux outlined that the accounts of the firm had to be reconstructed. She was later told the two solicitors had operated the Ulster Bank deposit account but had not disclosed that to their own accountants.

A review of the accounts showed that €32 million was lodged into this account between January 1st, 2000, and June 30th, 2003, and that withdrawals were made by cash or bank drafts. This account was like a client account and was closed in October 2003.

In the 3½ months before the account closed, there were lodgements of some €9.1 million to it and some €5.4 million was withdrawn.

She had established that health board payments were made to accounts of which she was unaware until later in 2004.

In June 2004, she got a list of accounts maintained by both solicitors, including personal accounts, an account in the name of Folerick Holdings Ltd and a Swiss bank account in the names of Mr Colley and his wife.

Health board monies were lodged to the Folerick account and other accounts. Mr Carroll also initially failed to give an acceptable explanation for cash withdrawals from the Ulster Bank account apparently used to reconstruct his wife's farm.

Both solicitors had admitted misconduct, including deliberate non-compliance with the solicitors account regulations and deliberately falsifying books of account to evade payment of tax.

In an affidavit of May 2004 on behalf of himself and Mr Colley, Mr Carroll had said the Ulster Bank account was unknown to the firm's reporting accountants and client, personal and office transactions were made to it primarily to facilitate the under-declaration of income and tax.

He said he accepted the accounts for the firm were not properly maintained but said no deficit arose on monies received by or on behalf of clients. The situation had arisen as a result of "the wrongful actions of the firm in evading tax liabilities".