An Irish businessman who, it was alleged by the prosecution, had links with Mr Michael Keating, a former Fine Gael junior minister, was jailed for eight years by a London court yesterday for his part in a £20 million tax fraud.
Daniel O'Connell (47), of Catherine Street, Limerick, was convicted on five counts of being knowingly concerned in the fraudulent evasion of VAT, involving some £20 million, between April 1996 and February 1999. He had denied the charges.
The jury returned a 10-1 majority verdict after deliberating for 11 days at Middlesex Guildhall Crown Court at the end of a 27-week trial.
Sentencing O'Connell, Judge William Rose said that the fraud in which he had played a major part was on a totally massive scale. "This is one of the, if not the, highest VAT frauds that has ever been prosecuted", he said. "I accept that you were not working alone and that others, if not many others, were involved in the creation and perpetration of the fraud."
During the trial it was alleged by the prosecution that the fraud was achieved with the help of Mr Michael Keating, who was once a Fine Gael TD, lord mayor of Dublin and, later, deputy leader of the Progressive Democrats.
Yesterday, the jury rejected O'Connell's claims that Mr Keating had forced him into a life of crime.
Last week, Mr John Dawson (58), of Mumbles Road, Swansea, who claimed he was an "innocent dupe", was acquitted on all five counts of tax evasion. Both he and O'Connell were also formally cleared of a further count of cheating the public revenue.
The trial was told by Mr Peter Rook QC, prosecuting, that the fraud was based on the VAT-free status of goods exported from one EU country to another. O'Connell bought consignments of computer chips and components and made them appear as if they were for companies in Ireland and therefore not liable for VAT when purchased.
In reality, the vast majority of the £100 million purchases by his five firms never left British shores and were instead diverted and sold at a profit.
Mr Rook said that while O'Connell was the "prime mover" in what went on, it was the Crown's case that Mr Keating also played a central role. The firms Mr Keating was involved with - Irish Semi-Conductors Ltd and Anglo-Irish Merchants Ltd - were closely linked to O'Connell during the first part of the fraud.
When O'Connell and his alleged accomplice, Mr Dawson, were arrested, customs officers found written evidence linking Mr Keating to the fraud, the court was told.
One of the London suppliers, AJM, also dealt with Mr Keating and another man, Mr John O'Neill, at Irish Semi-Conductors, believing they were legitimate customers, it was alleged.
O'Connell pleaded duress in the witness-box, claiming that, far from being a partner in crime, Mr Keating had masterminded the fraud. He insisted that his problems began after borrowing £150,000 from Mr Keating and Mr O'Neill to bail out his building firm. After trying to pull out of the computer business, Mr Keating allegedly threatened him, he claimed.
He told the jury: "He [Mr Keating] told me I would be in a wheelchair. He said `We know where you live. We know where your wife and children are'."
The fraud was halted in December 1998 when an Irish newspaper carried a front-page story alleging tax evasion involving computer chips. By February 1999 O'Connell had transferred £4.2 million to offshore accounts.
Mr Keating told The Irish Times last night that he was not involved in any impropriety with O'Connell. "During the case outrageous allegations were made that I and others had forced Mr O'Connell to engage in illegalities. Such allegations, which were very evil in many cases, contain not one scintilla of truth."