An FBI agent testifying against alleged Real IRA chief Michael McKevitt owed the US Government $750,000 in unpaid taxes after his business collapsed, he said today.
Former trucking company boss Mr David Rupert was also investigated for fraud and recruited to go undercover in an operation targeting drug dealers and a female police officer in New York state, a court was told.
Mr Rupert, the main witness in the trial of McKevitt (53) was forced to declare himself bankrupt for a second time in 1992 after one of his lorries was involved in a horrific road crash which killed three children.
His evidence is crucial to the state's case against McKevitt, of Blackrock, Dundalk, Co Louth, who denies directing the Real IRA and being a member of the organisation which killed 29 people in the August 1998 Omagh bomb atrocity.
During cross-examination at Dublin Special Criminal Court, he admitted withholding employees' tax contributions in a doomed bid to keep his firm afloat.
With the Inland Revenue Service chasing him for the money, he told the court: "The penalties are brutal."
The bills kept mounting and at one stage the authorities tripled their repayment demands.
"In the end it was up around $750,000," he said. IRS officials told him he could either win the lottery, make a special arrangement with the government or keep his money hidden for a decade, the court heard.
During negotiations in Chicago, where he had moved to in March 1993, Mr Rupert claimed he was told: "If I could sit it out for 10 years, it would become moot."
All his operating funds were then transferred over to his third and later fourth wives or else kept in cash, he said.
Defence counsel Hugh Hartnett SC replied: "You had 10 years in front of you in which you had to lie low and hide your source of income from the revenue. That's a difficult thing to do."
But Mr Rupert insisted: "Not as difficult as one might think in a country of 260-something million people."
The businessman was paid a total of $1.25 million by the FBI and later MI5 to infiltrate dissident republican groupings during the 1990s.
Earlier he had told the court about his first bankruptcy in 1974 and about a civil action taken against him for two bounced cheques.
PA