A Co Westmeath businessman, Mr Brendan Galligan, who was one of more than 400 investors in an unauthorised investment scheme sold by National Irish Bank (NIB), has pleaded guilty to two charges of making false tax returns to the Revenue Commissioners.
At the District Court in Mullingar yesterday, Mr Galligan (56), who operates and is a director of Mullingar Travel, faced charges relating to tax returns for 1992/93 and 1993/94.
Judge Conal Gibbons adjourned the case for mention on March 20th and ordered Mr Galligan to settle fully his tax liabilities before returning to the court for sentencing. Mr Galligan faces a possible fine of €12,069 and or 12 months' imprisonment.
The Revenue Commissioners established that Mr Galligan had failed to disclose the income used to invest in the NIB scheme together with monies invested at Bank of Ireland and Woodchester Crédit Lyonnais banks, on which €52,000 in taxes was due to the State. These unpaid taxes were discovered by the Revenue Commissioners as part of its investigation into the Clerical Medical International (CMI) offshore investment products offered to NIB customers.
Mr Donal Buckley, a senior inspector at the Revenue prosecutions division, explained that it had become aware of the CMI scheme in 1998. During its investigation it discovered that Mr Galligan had taken out one of these products at the end of 1993 but had not disclosed these funds in his tax return for that year.
Mr Galligan was found to have invested €19,000 of undisclosed income in a CMI bond in the tax year of 1993/94. The Revenue also established that he had previously invested €33,000 at Bank of Ireland and Woodchester using money that he had failed to disclose.
The Revenue Commissioners had three witnesses from these financial institutions who were prepared to verify these accounts at court yesterday. They were not called to give evidence following Mr Galligan's guilty plea.
Mr Galligan's solicitor, Mr Paul Green, told the court that his client had paid €403,000 to the Revenue Commissioners last Friday. This figure was calculated by his advisers as representing the full payment due to the Revenue including the €52,000 in unpaid taxes, plus interest and penalties.
Mr Green said this substantial payment had been made in the context of the ongoing relationship between the Revenue Commissioners and Mr Galligan and showed that he was making efforts "to get onside".
Mr Galligan had previously made an attempt to become tax-compliant in 1999 when he made a payment of £185,000 (€235,000) to the Revenue. Mr Green suggested that the three-year delay in finalising his liabilities was partly due to differing advice on how he should proceed in dealing with the Revenue, which had initiated a criminal prosecution against him.
"He is here to face up to the facts," Mr Green said and added that the payment of €403,000 last Friday was not an attempt to buy off the Revenue.
He appealed to the court for Mr Galligan's guilty plea and his efforts to discharge his liabilities with the Revenue to be taken into consideration. Mr Green also emphasised that Mr Galligan, a father of three, was a key figure at Mullingar Travel and that there was a risk that the business would suffer without his "guiding hand".
Judge Gibbons said he would wait until the Revenue was in a position to confirm that Mr Galligan was compliant before considering the appropriate sentence. Mr Mark Connellan, the State solicitor acting for the Revenue, said it was still awaiting the receipt of further information from Mr Galligan.
"I would like to know that what is due rightfully to the State has been paid. It is important that the court be satisfied that the defendant is compliant and all that is deemed to be due should be paid," Judge Gibbons said.
