Thurles Information

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.

The Dublin Central Criminal Court, situated at Parkgate Street, Phoenix Park, Dublin 8, is expected to be the venue on Wednesday (June 6th) next, in the trial of Tipperary Independent TD Mr Michael Lowry, latter accused of allegedly filing incorrect income tax returns for the year 2002 (some 16 years ago) and of allegedly conniving in the delivery by his company, Garuda Ltd., (latter a refrigeration company owned by the former cabinet minister) of incorrect corporation tax returns for the years ending 2002 and 2006.

The Director of Public Prosecutions (DPP) had previously secured an order transferring this trial from the Tipperary Circuit Criminal Court to the Dublin Circuit Criminal Court. This secured order was perceived as stating in effect that a Tipperary jury could not be trusted to comply with their oath or indeed any warning given by a trial judge.

We understand that the case taken by the Revenue Commissioners will be heard by Mr Justice Martin Nolan.  Judge Martin Nolan will be remembered for his imposition of a previous sentence based on his principles of ‘punishment and deterrence’, in the jailing of Mr Paul Begley, head of the fruit and vegetable importers Begley Brothers Ltd, Blanchardstown, Dublin, whom he jailed in March 2011, after the latter admitted avoiding customs duty on garlic imported from China.

Later, in March 2013 the Court of Criminal Appeal (CCA) ruled that Mr Justice Nolan had erred in principle by overlooking, or not properly valuing, a number of mitigating factors which had been pleaded on Mr Begley’s behalf and that the landmark Revenue sentence was not proportionate to the crime committed.

Mr Lowry over the past number of years has strongly denied charges of allegedly filing incorrect income tax returns for the year 2002 and of conniving in the alleged delivery by his company Garuda, in incorrectly filing Corporation Tax returns for the years ending 2002 and 2006.

He also denies a fifth charge, brought under provisions of the Companies Act, of wilfully causing a company to fail to keep proper accounts, between August 28th 2002 and August 3rd 2007.  The transaction which gave rise to the prosecution involved a €372,000 payment, due to Garuda by a Finnish company, Norpe OY.

This prosecution was initially grounded on Revenue calculations that Mr Lowry had a personal tax liability of some €516,000, including interest and penalties, while Garuda had a liability of some €510,000, however those calculations were later disproven by Revenue Appeals Commissioners, who confirmed that Mr Lowry had no tax liability and Garuda had a €38,000 liability, which had been long since paid.

Their was no suggestion that Revenue officers had acted in bad faith, but all had operated on the wrongful conclusion that Mr Lowry and his company had a global tax liability of some €1m.

This unusual 16 year old Revenue prosecution case, is expected to be found extremely difficult to comprehend by any sworn body of people, (jury) convened to render an impartial verdict, officially submitted to them by a court.