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 The jury sitting on the trial of Tipperary Independent TD, Mr Michael Lowry and on his refrigeration company Garuda Ltd.; both accused in relation to alleged tax offences, are expected to resume their deliberations on Monday morning next at 10.30am.
As readers will be aware, these charges relate to a commission payment of some €372,000 correctly due from a Finnish refrigeration company, Norpe OY, and made payable to Garuda Ltd in 2002. Same was paid to a third party in the Isle of Man on the verbal direction of Mr Lowry, who was abroad on extended leave, at the time of the transaction.
The Irish State would maintain that same payment was kept off the books in 2002, and that Mr Lowry and the company then attempted to introduce this payment in his 2006 tax returns.
Mr Lowry and Garuda Ltd. have both rigorously denied these charges, pleading not guilty to knowingly delivering incorrect accounts and information in relation to Corporation Tax for the year 2002. They had also rigidly denied making an incorrect Corporation Tax Return in 2007, relating to the business year 2006 and with failing to keep proper audited accounts; allegedly brought about with Mr Lowry’s consent or connivance.
A charge alleging that Mr Lowry himself had submitted an incorrect tax return for 2002 was already dropped by the prosecution on Wednesday last.
Yesterday Mr Justice Martin Nolan, summing up, informed the jury that the issue in this case was “what Mr Lowry actually knew”. He stated that the selected jury members must be fully satisfied, beyond a reasonable doubt, that Mr Lowry was fully aware that this earned commission, had not been included in his company accounts and tax computations.
He said Mr Lowry’s explanation was that he had instructed a staff member to raise an invoice in 2002, and had assumed this had been completed and the money automatically entered onto the company’s books by his firm of accountants.
Judge Nolan also told the trial jurors that they must be fully satisfied, beyond a reasonable doubt that this is not true in order to convict. He said that if they found the explanation was reasonably believable, then they must acquit. He further stated that if the jury believed Mr Lowry did not know about the money appearing in Garuda’s 2006 accounts, they must also acquit on that charge as well.
Judge Nolan articulated that the eleven person jury must also deliver a corresponding verdict for both Mr Lowry and Garuda Ltd. as Mr Lowry was and is “the company”. He said the jury must look at the evidence in a common-sense way, before coming to a decision coldly in the light of facts.
Earlier yesterday, Mr Lowry’s personal Senior Counsel, Mr Michael O’Higgins SC had informed jurors that the case against his client was was “deeply flawed” from the “get-go” and “jaundiced from the outset”. “You can read a lot of stuff telling you about Michael Lowry. The people of Tipperary are almost shamed for returning him, election in and election out,” Michael O’Higgins SC, told the jury. “There is no aura about Michael Lowry. No mystery about him topping the polls; he grafts,” (This referred to evidence from his political secretary, that he works from 8.00am to midnight, throughout his Tipperary constituency).
He further inquired of the jury if they had “ever made a mistake in your life, the kind of mistake that comes under scrutiny” and immediately afterwards there is some “authority figure” investigating you. “You are told your mistake is not just up for grabs, but your motive too and you are told that you are under investigation,” counsel told the jury. Mr O’Higgins said that because of “time pressures”, the charges were “simply laid against” his client, although Mr Lowry was willing to meet with his accusers, the Revenue tax inspectors. This case was taken just a mere 3 weeks before the 10 year elapsed time frame for Lowry’s alleged offence.
“Time Pressures” refers to a past statement [See Section 1078 (7)] of the Taxes Consolidation Act; regarding the then Caymen island scandal by the former Revenue Commissioner chairperson Ms Josephine Feehily. She had then stated that while many cases passed the serious evasion test to be considered for prosecution, the time elapsed, typically in excess of 10 years since the alleged offence had occurred, meant it would not be possible to mount a successful prosecution.
[Section 1078 (7)] of the Taxes Consolidation Act provides that proceedings must be initiated within 10 years from the date of the commission of the offence] Notwithstanding any other enactment, proceedings in respect of an offence under this section may be instituted within 10 years from the date of the commission of the offence or incurring of the penalty, as the case may be.]
Mr O’Higgins asked the jury if they had found it somewhat bizarre that Mr Lowry had never once been interviewed by a tax inspector, despite his home and business premises being raided, on the same hour, by some 21 persons employed by Revenue. Taxes Inspector Ms Shelia Hanley who was involved in the raid and the thorough search of Mr Lowry’s home, had informed the jury that she accepted that only a “small sheaf ” of documents were recovered and same were “not of any evidential value”, meaning that nothing untoward had been located suggesting any criminal activity.
Mr O’Higgins claimed that Revenue inspectors had put their summons out, because of time pressures, without even having a case against Mr Lowry. He said the jury now needed to focus on whether Mr Lowry had the fullest knowledge of what had been accounted for in his company’s books. Here he said was a case where there was an ‘excessive form of zeal’; ‘a form of tunnel vision’, and a case brought about which displayed utter ‘inflexibility’ and was entirely ‘disproportionate with regard to the real facts’.
We will return to report on this case on Monday next, when the jury will again convene to further deliberate.
 Dublin Circuit Criminal Court The remaining eleven person jury in the trial of Tipperary Independent TD Michael Lowry were told by Mr Patrick Treacy SC, defending Garuda Ltd, that an alleged missing invoice had “an innocent explanation” and the missing document could not be misconstrued as part of some “conjuring act” .
The State’s case is that Mr Lowry’s company, Garuda Ltd, received £248,624 (Stg) or €372,000 (Euro) in commission from Norpe OY, a Finish refrigeration company back in August 2002. Allegations have been made that Mr Lowry arranged for this payment to be made to a third party, one Mr Kevin Phelan, latter residing in the Isle of Man, and the paid commission; part of an agency agreement between Norpe OY and Mr Lowry, didn’t appear in the accounts of Garuda Ltd, for that same year 2002.
My personal observances during the previous weeks proceedings, saw a somewhat feeble team of Revenue witnesses, convened by the prosecution, all who had inferred that accounts were falsified in 2007, to mirror that the payment had been only received in 2006.
A Revenue witness for the prosecution, Mr Thomas Keating; the latter a former, now retired Senior Tax Inspector at Thurles Tax Office, gave evidence that a CT1 form received on behalf of Garuda Ltd, for that year (ending 2002), forwarded by his accountants was neither “signed nor dated”. He further confirmed that same should not have been acted upon, due to the fact it bore no signature. Mr Keating further accepted, under pressure, from Mr Patrick Treacy that the ‘fine print’ as such on the declaration form provided, states that the person signing the document agrees that everything included in the form, to the best of the clients knowledge, is correct and complete. In this case there was no signed statement made on that CT1 form and none of the boxes were then deemed as being either correct or complete.
Mr Patrick Treacy had asked Mr Keating if he had heard Mr Farrell’s original opening statement of the previous day e.g. “Cooking the books not once but twice” and “Putting toothpaste back into the tube” ; to which Mr Keating muttered, “I wasn’t in court, but I heard it on the RTE news“. Mr Treacy, defending, continued “Surely, when the CT1 form is not even signed, the lid can’t have been even removed from the toothpaste tube and the books couldn’t have been cooked”.
Continuing to defend Garuda Ltd., Mr Patrick Treacy SC, further reminded the jury that the politician’s private secretary, had given a frank explanation justifying the reason there was no invoice for the €372,000. He stated that Norpe OY had informed her that an invoice had to issue from Mr Kevin Phelan directly, rather than Garuda Ltd and that remained the very simple, innocent explanation for the absence of an invoice. There was “no conjuring act here”, Mr Treacy confirmed, this evidence given was a key moment during the trial.
In a major development on Wednesday last, inside Court No 9, an allegation against Mr Michael Lowry, for having personally filed a false tax return, relating to the years 2002; Mr Justice Martin Nolan had directed the 11 person Jury to find Mr Lowry “Not Guilty”. “When this charge against Mr Lowry was dropped yesterday, the prosecution case went up in a puff of smoke”, Mr Treacy verbalized.
A tax inspector had determined that the €372,000 was an emolument, (a wage or salary), and because of that both Mr Lowry and Garuda Ltd owed income tax, PAYE and PRSI. Both were assessed as owing a total bill of €1.1 million including interest, fines and penalties on the €372,000. This assessment was later successfully challenged before the appeals commission and reduced to nil.
“Such was the engine driving this whole case”, stated Mr Treacy, who continued, advising the jury that Revenue didn’t anticipate that; “The engine ran into a serious problem in terms of staying on track”. Mr Lowry and Garuda Ltd would now fight this assessment “tooth and nail”.
“Yesterday the engine got decoupled from the carriages and the whole engine that drove this whole thing, to bring it into court, is gone. It went because what they thought was their case had evaporated,” stated Mr Treacy, “however the eight carriages remain trundling on”
Referring to the opening speech on the Monday of the previous week where the counsel for the prosecution Mr Remy Farrell SC, had stated that Garuda’s books were “cooked, not once but twice”, council for Garuda stated that “the only cooking being done now was by Revenue. This case relates to the misfiling of an invoice and it is presented to the 11 of you, as a gross fraud on the exchequer,” he continued.
Referring to Mr Farrell’s description that some of the accounting procedures adopted by Garuda Ltd was “an attempt to move the body”, Mr Treacy declared “This isn’t a body case. It is not even a murder case. It is a Revenue case.” He further stated that the charge of making an incorrect return in connection with corporation tax in 2007 was not what the State claimed “the disposal of the dead body”.
Mr Treacy now asked each of the the jury members to consider the symbols of justice when determining the case. “This symbol (Justitia, c 1AD) is of a blindfolded woman who holds a sword in one hand and the scales of justice in the other. This sword represents the power of reason and the ability to cut through and decide on what is truth and what is a falsehood. The scales represents the balance of the individual against the needs of society and a fair balance between interests of one individual and those of another. “She is blindfolded to represent equality, knowing no differences in the parties involved, and it means you are to remain blind to anything that may be prejudicial, or anything that may colour you from adjudicating properly on this case,” Mr Treacy declared.
He went on to described the prosecution case as “madness”, “relentless”, “manic”, and “a joke”. He informed the jury that the law under which his client is charged requires that you can be convicted by Revenue even if the mistake in the return leads to an overpayment of tax. “The only way this now halts is when an external authority states that this has gone too far, and that same authority is the eleven of you”, Mr Treacy suggested.
Finally, Mr Treacy asked the jury members to ask themselves “one fundamental question”, “Is it right that his client should be prosecuted in Dublin Circuit Criminal Court by the Revenue Commissioners in relation to an underpayment of corporation tax of €5,541?”
The trial will continue before Judge Nolan and a jury of three women and eight men on Monday.
 Taking you inside Court No 9 today, to show the seating arrangements currently in use within the Dublin Circuit Criminal Court building. As our readers will be aware we have been closely following the trial of Tipperary Independent TD Mr Michael Lowry. This latter trial was moved out of Co. Tipperary, to the Dublin Circuit Criminal Court to be heard before a Dublin based Jury; on the grounds that he was “too popular” in Tipperary to be judged by a jury of his peers.
In a major development this morning inside Court No 9 at the trial, the charge /allegation against Mr Michael Lowry, for personally filing a false tax return, relating to the years 2002; Mr Justice Martin Nolan has directed the 11 person Jury to find Mr Lowry “Not Guilty”.
The prosecution had agreed to withdraw the allegation, following an application by Mr Lowry’s lawyers, and while in the absence of the 11 person jury members.
The withdrawn charge had alleged that that Mr Lowry, on 21st October, 2003, knowingly or will-fully had made an incorrect tax return for 2002, through failing to reflect or account for £248,624 (€372,000) obtained by him from Garuda Ltd, which should have been declared as personal income.
His trial will continue over the coming days in Court No 9, before Mr Justice Martin Nolan and his jury of eight men and three women, in relation to four other allegations.
More details on this case in the coming days.
Day four of the trial involving Independent Tipperary TD Mr Michael Lowry, together with the refrigeration company Garuda Ltd, concluded today’s session in the Dublin Circuit Criminal Court, in connection with alleged tax offences; same purportedly having been committed some 16 years ago, back in 2002.
Court No. 9, Dublin Circuit Criminal Court The trial, which is expected to continue for a further seven days, was informed that Tipperary TD, had not withheld even one cent of his tax liability, and had in fact taken a second mortgage out on his family home to meet tax liabilities, which could easily have been written off through Limited Liability had he allowed his company Garuda Ltd, to “go to the wall”. A later witness to take the stand, chartered accountant Mr Neale O’Hanlon, further agreed that in relation to tax liability, Mr Lowry had been most anxious to discharge his debts, so that his company; the jobs of his employees; creditors and clients who depended on him, would not be future endangered.
The court heard confirmation that a €1.26 million settlement which had been finalised in 2007, were furnished through monies loaned by Lowry to Garuda Ltd to deal with these same tax liabilities. It was again confirmed to the court that Lowry had never once opted to liquidate Garuda, choosing instead to re-mortgage his family home, in his efforts to raise the demanded €1.26 million settlement by Revenue.
Yesterday evening the court heard that the prosecution were completely satisfied that the Isle of Man company, named as “Glebe Trust”, was and is, the sole creation of one, Mr Kevin Phelan and that TD Michael Lowry had absolutely nothing whatsoever to do with the same, said company.
Those following this case are aware that Mr Lowry has fully denied conniving with his refrigeration company, Garuda Ltd, to furnish an incorrect return; thus providing incorrect information. He has also denied causing his company Garuda Ltd, to fail to follow correct accounting procedures with regard to the recording of a payment. He further denies knowingly making an incorrect tax return for the financial year 2002, in relation to commission involving the sum of some €372,000; latter a payment correctly due from the Finnish refrigeration company, named as Norpe OY.
At today’s hearing the trial heard evidence from witnesses Mr Neale O’Hanlon and Mr Kieran Bourke from the BBT Accountancy firm; both the latter, who had previously been involved in auditing Garuda’s 2006 accounts, back in 2007 some eleven years earlier.
Mr Kieran Bourke, a former employee of BBT Accountancy, who had previously undertaken most of the overview of the work during the audit, stated that he had not been made aware of a letter forwarded by Mr Lowry to BBT directing that the €372,000 receipt should be included in the 2006 accounts.
The letter on Streamline Enterprises headed paper; latter which was the trading name of Garuda Ltd., was dated 15th January 2007. In it, Mr Lowry stated that he wished to advise his accountants that following the issue of an invoice to Norpe OY in respect of money outstanding to the value of €372,000, in 2006, he requested that the obtained payment of this amount was made directly to himself. But he said, this was in fact money which was correctly due to the company and sought that it be returned and reflected in his accounts with the tax paid and set against his director’s loans.
Accountant Mr Kieran Bourke stated that the insertion of these figure into an accounts document, had been undertaken by Mr Neale O’Hanlon and had not in fact been recorded by him.
Barrister for Garuda Ltd, Mr Patrick Treacy SC, put it to Mr Kieran Burke, that one of the charges against the company and indeed against Mr Lowry was that the company failed to keep proper books of account. The Senior Counsel then put it to Mr Burke that Garuda’s defence to this charge was that it believed it had employed a competent and reliable person under company law to ensure its books were fully compliant. Mr Burke agreed that his then firm was more than competent enough to have conducted the audit.
Mr Neale O’Hanlon confirmed that this submission letter from Mr Lowry would have been drafted by the accountants, and then signed by Mr Lowry, and confirmed he could not recall bringing it to Mr Burke’s attention.
Mr O’Hanlon confirmed that he was not fully aware that the payment had actually been made in 2002 and not in 2006, until he met with Mr Michael Lowry, following notification by the Revenue Commissioners of their investigation in 2013. Had he been aware he would have dealt with it differently in the 2006 accounts.
Under cross examination by Lowry’s Senior Council, Mr Neale O’Hanlon confirmed, again today, that the Revenue Commissioners had raised assessments against Mr Lowry and Garuda Ltd, which had totalled over €1 million; however same had been reduced to zero, following an appeal decision by the Appeal Commissioners, thus further confirming that not one cent of tax currently remained unpaid to date, by either Michael Lowry or indeed Garuda Ltd.
Mr O’Hanlon fully agreed it was very possible that confusion had arisen with Mr Lowry in 2007, regarding the €372,000 payment.
His trial will continue tomorrow morning in Court No 9, before Mr Justice Martin Nolan and his jury of eight men and four women.
 Dublin Circuit Criminal Court The trial involving Independent Tipperary TD Mr Michael Lowry, together with the refrigeration company Garuda Ltd, continued in the Dublin Circuit Criminal Court today, in connection with alleged tax offences; same purportedly having been committed some 16 years ago, back in 2002.
Revenue Witnesses
Two senior officials gave evidence on behalf of the Revenue Commissioners, during the course of today’s hearing.
First to appear on the stand was Mr Kelly an Information Technology (IT) expert, employed by Revenue and supporting Revenue’s ROS system (Revenue On Line Service).
Mr Kelly explained briefly at the behest of prosecuting barrister Mr Remy Farrell SC, to the Jury of eight men and four women assembled, how ROS worked. He however was unable in some cases to confirm details regarding tax rules associated with the ROS System, requiring barrister Farrell to further confirm that Mr Kelly was more akin to IT technology, than taxes legislation.
The second witness for the prosecution, Mr Thomas Keating; the latter a former, now retired Senior Tax Inspector at Thurles Tax Office, sitting then in the heart of Mr Lowry’s constituency of North Tipperary, from January 2006 to October 2014, was next called to give evidence.
The Court was to learn that an income tax return for the year ended 2002 had been submitted on behalf of Mr Lowry in October 2003, using the new Revenue Online Service (ROS). This return indicated that the accused had accrued a total income of some €151,050, including a public office salary of €69,515, but as he had already paid P.A.Y.E for that year, it remained that he had no tax liability and had in fact overpaid his taxes by some €136.00.
A Corporation Tax Form, also known as a CT1 form then submitted on behalf of his company Garuda Ltd, by his accountants concluded that it operated at a loss of almost €100,000 for the year ending December 31st, 2002 and as such no tax liability existed, but rather a refund of €3,500 was justly due.
A CT1 form submitted in August 2007 for the year ending 2006 stated that Garuda Ltd had an income of just over €915,000 and a tax liability of some €114,000.
The Tax Inspector, Mr Keating, agreed with Mr Patrick Treacy SC, defending Garuda Ltd, that the declaration on the CT1 form received on behalf of Garuda for that year (ending 2002), forwarded by his accountants was neither “signed nor dated”. He further confirmed that same should not have been acted upon, due to the fact it bore no signature.
Mr Keating further accepted, under pressure, from Mr Patrick Treacy that the ‘fine print’ as such on such a declaration form provided, states that the person signing the document agrees that everything included in the form, to the best of the clients knowledge, is correct and complete. In this case there was no signed statement made on that CT1 form that none of the boxes were then deemed as being either correct or complete, due to the forwarded declaration remaining unsigned.
Mr Patrick Treacy asked Mr Keating if he had heard Mr Farrell’s original opening statement of the previous day e.g. “Cooking the books not once but twice” and “Putting toothpaste back into the tube” ; to which Mr Keating muttered, “I wasn’t in court, but I heard it on the RTE news“. Mr Treacy, defending, continued “Surely, when the CT1 form is not even signed, the lid can’t have been even removed from the toothpaste tube and the books couldn’t have been cooked”.
Mr Keating further agreed with defence barrister Mr Michael O’Higgins SC, that his client’s tax agent, BBT Accountants had received a letter from Revenue on August 26th, 2013, concerning the sum of money that currently “remains the core issue of this case”. Mr Keating fully accepted that this letter clearly stated that Revenue considered that the sum of £248,624 (Stg), received in 2002, constituted income for tax purposes. It further outlined that Mr Lowry now owed income tax on same, along with penalties in the form of levies and fines; same totalling some €516,000.
Mr Keating also further accepted that a similar letter was issued to Garuda Ltd, stating that this company owed some €510,000, which again included the original tax, penalties etc.
Mr Keating had no problem in agreeing that Mr Lowry and Garuda had a perfect right to challenge Revenue’s then findings, through use of the Appeal Commissioners, same the highest authority in the land. The same Appeals Commission assessed both Mr Lowry’s and Garuda’s tax liability and agreed that same be both reduced to a NIL liability, in effect stating that both Mr Lowry and his company Garuda each individually had nothing more to pay.
The trial will continues before Mr Justice Martin Nolan and his jury of eight men and four women tomorrow morning.
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