The former Guinness & Mahon banker, Mr Padraig Collery, conceded yesterday it was likely that he had issued bogus certificates in respect of a fictitious £260,000 loan from the bank to Princes Investment Ltd, a company associated with property developer Mr John Byrne.
Such certificates, indicating that a loan existed in the books of Guinness & Mahon when it did not, and detailing the amount and the interest paid, were relayed to Mr Paul Carty of Deloitte Touche on two occasions, the Moriarty tribunal was told.
The chairman, Mr Justice Moriarty, thanked Mr Collery for his evidence and added: "And I say that more warmly than on previous occasions."
Yesterday, after two hours of intensive questioning by Mr John Coughlan SC, for the tribunal, Mr Collery conceded that it was he, on the instructions of the late Mr Des Traynor, who had "probably" created - or caused to be created - the fictitious statements on which the certificates were based, for both Princes Investments and Central Tourist Holdings, a company associated with Mr Byrne and Mr Denis Foley TD.
This would have been around the time the auditors had requested the certificates to enable them to assess the amount of tax due.
Mr Coughlan: "You knew you had sent certified statements (to the auditors) knowing the balances shown to be fictitious?"
Mr Collery agreed that he "probably" did.
What triggered the creation of the fictitious statements was the decision by Princes Investments to repay the loan - a year after it had been cleared from the books of Guinness & Mahon in 1985 by an Ansbacher-linked payment.
Significantly, a "banker's payment" for £260,000 dated July 23rd, 1987, made out to Guinness & Mahon, was ultimately credited to Amiens Securities Ltd, a vehicle used by Mr Des Traynor in connection with Ansbacher transactions. This amount was debited to a Princes Investments AIB account in Tralee. A banker's payment was a special transaction, Mr Collery explained, which enabled the "full value" of a cheque to be issued without delay.
Princes Investments traded mainly as the Mount Brandon Hotel, Tralee. Its directors were Mr Byrne, Mr William Clifford and Mr Thomas Clifford. Mr Byrne and Mr Denis Foley TD were, along with Mr Thomas Clifford, directors of Central Tourist Holdings, which the tribunal heard earlier had also had a loan from Guinness & Mahon, secured by a back-to-back Ansbacher deposit.
Documents were produced for the Revenue Commissioners indicating that Central had a loan outstanding when the real position was that it had not.
In the case of Princes Investments, documentation made available to the tribunal by Guinness & Mahon showed that a loan of £116,000 was granted to Mr Byrne's company, to be repaid a year later.
It would appear the loan was still outstanding by 1986. A bank minute stipulated that security for the loan was "guaranteed by J.J. Byrne and Thomas Clifford" and added: "Guarantors are well known to Guinness & Mahon and in this case the security is considered adequate." This formula was used to describe loans secured by Ansbacher deposits.
The loan was denominated in sterling and appeared to have been cleared in full on September 4th, 1985, said Mr Coughlan, when £186,986.82 was transferred from Guinness Mahon Cayman Trust college account. The Central Tourist Holdings loan was cleared the same day and in the same way.