Cost of alleged fraud at Dr Quirkey’s rises to €2.5m

The cost of the alleged fraud uncovered at Dr Quirkey’s Good Time Emporium arcade and casino business has risen to €2.56 million, according to its latest accounts. The figure for the years 2018 and 2019 was put at €2.06 million.

The accounts said that €543,758 alleged fraud perpetrated on the firm in 2020 was made up of €427,387 in misappropriated cash and €116,371 in misappropriated bank payments.

The long-established Dublin-based business Dublin Pool and Jukebox Ltd is owned by 75-year old-businessman Richard Quirke.

The alleged 2020 fraud now brings the misappropriated cash total to €2.22 million for 2020, 2019 and 2018 and the alleged fraud from the misappropriated bank payments to €342,764 over the three years.

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After the alleged fraud on the firm was discovered in December 2020, the firm appointed external financial consultants to carry out a forensic investigation into the company’s systems and processes.

The accounts note that “this led to the identification of unpaid taxation and interest liabilities which have been fully accrued in the company’s accounts”.

The accounts show that a further €495,355 appears under the heading of “interest on overdue tax” and this brings to €946,952 having been paid out in interest on overdue tax across 2020, 2019 and 2018.

Auditor Colm Malone from Rush Malone and Co has qualified his opinion concerning the financial statements over the alleged misappropriated cash 2020 total of €427,387. Mr Malone said that “with respect to amounts considered to have been misappropriated of €427,387, the information available was limited to determine the exact nature of the misappropriation”.

“During the year, the company did not undertake regular cash counts and did not have an adequate system of recording all cash movements,” Mr Malone said.

He added: “Owing to the nature of the company’s records, we were unable to obtain sufficient appropriate audit evidence regarding all cash movements during the period by using other audit procedures.”

The Dr Quirkey’s business on Dublin’s O’Connell Street shut down in spring 2020 and did not reopen until December 2021 due to Covid-19 lockdown measures.

This contributed to revenues declining by 4.75 per cent from €10.06 million to €9.58 million in the 12 months to the end of June 2020.

The €543,758 cost of the alleged fraud and €495,355 arising from interest on overdue taxes in 2020 contributed to pretax losses increasing by 27 per cent at the company to €1.61 million for fiscal 2020.

The 2020 loss resulted in the balance sheet of Dublin Pool and Jukebox Ltd taking a further hit with shareholder funds reducing from €33.6 million to €31.93 million.

The firm’s accumulated profits stood at €24.45 million with cash funds of €3.93 million.

In response to the alleged fraud, the the accounts said that “the company has implemented an extensive and wide ranging programme of governance and operational improvements at all levels within the organisation”.

The 2020 accounts also repeat, under the heading of “contingent liabilities”, that the company “is currently the subject of a Revenue investigation, the outcome of which is uncertain at present”.

The note goes on to say that “the directors have provided for additional liabilities and interest in the financial statements but have not provided for potential penalties which may arise”.

The 2020 loss also takes account of non-cash depreciation costs of €1.35 million, the loss of €629,653 on the sale of a tangible fixed asset offset by a €375,000 gain on the value of an investment property.

Numbers employed by the business remained at 86 and staff costs increased to €6.18 million.

Pay to directors remained at €213,000 while the amount owed by the business to Mr Quirke reduced from €528,794 to €112,839.

With the lifting of Covid-19 restrictions, the company said it was “confident that the business will fully recover and result in strong liquidity.”

Dr Quirkey’s Good Time Emporium has been contacted for comment.