The Criminal Assets Bureau (CAB) has served a tax demand for more than £3.3 million on two Dublin businessmen in respect of companies which have been supplying smuggled cigarettes and confectionery to shops and street traders.
The directors of the companies received the tax assessments 10 days ago for a sum totalling £3,367,739 for unpaid income tax and VAT. The matter is now before the High Court.
Three companies are named in the CAB order, all trading from premises at Smithfield in Dublin.
The serving of the assessment follows a lengthy CAB investigation, under the title Operation Kingsize, into the wholesale distribution of smuggled cigarettes to shops and street traders in Dublin.
The operation began in July, and members of the National Bureau of Crime Investigation (NBCI), which investigates non-political serious crime, assisted the CAB officers.
As part of the investigation, officers raided the premises from which the goods were being distributed, a number of private houses and the offices of accountants and solicitors.
The investigators are also, separately, looking at the business activities of a north Dublin criminal figure who has also been involved in the distribution of smuggled cigarettes.
In recent years the wholesalers have branched into confectionery, from soft drinks to sweets. The cigarettes and confectionery are being sold from the Smithfield warehouse at prices below which other wholesalers in the city can source the same goods while paying tax.
The matter was brought to the attention of gardai by wholesalers and traders in the city who objected to the widespread distribution of the illegal goods. One of the city's major wholesale suppliers of confectionery goods is said to have been threatened by the illegal trade.
Gardai from the Criminal Assets Bureau also worked closely with the association representing small traders, RGDATA.
The two businessmen who have received the tax assessments are expected to appeal against the assessment, one of the three or four served by CAB in the past year for similar amounts. One businessman is based in Co Meath and the other in north Dublin.
The assessment in Operation Kingsize brings the total amount of tax and VAT assessed by CAB to £23 million, according to recently-released figures. The amount of tax demanded as a result of successful actions is now put at £32 million.
The CAB has also collected £3 million in taxes since it was set up to counter organised crime after the murder of the journalist Veronica Guerin. It has seized property, cash and other assets valued at a total of £11 million.
CAB officers have also issued demands for the repayment of £800,000 in fraudulent social welfare claims. It is also estimated that the CAB actions against people falsely claiming social welfare payments have saved the State a further £700,000.
The success of CAB has attracted the attention of other EU member-states, and the British Home Secretary, Mr Jack Straw, has had talks with the Minister for Justice, Mr O'Donoghue, one of the architects of the criminal assets legislation, about introducing similar measures in Britain.