Court lifts order freezing company’s bank accounts

An order freezing €293,000 in a company's bank account granted after the Criminal Assets Bureau claimed the company was involved with others in a multi-million Euro diesel oil fraud has been lifted by the High Court.

CAB had brought proceedings against 21 companies and individuals arising from an alleged fraudulent interconnected scheme involving “marked” diesel (agricultural diesel liable to lower taxes) being passed off as standard diesel and related matters concerning alleged laundering of diesel.

CAB claimed two families were central to the alleged fraud and alleged both ran fuel laundering enterprises separately but with a high degree of connectivity. It was alleged all 21 respondents were involved with the alleged enterprises.

CAB alleged one of the families had used the respondent company — X — to purchase fuel products from wholesale suppliers because that family was having difficulty with suppliers due to their suspected involvement with the illegal fuel landering.

Mr Justice Kevin Cross noted “transfers” of some €5.5 milion were made into the X firm’s account from accounts of two other companies allegedly involved in the fraud while other transfers amounted to about €15 million.

CAB alleged the “main purpose” of the X firm’s account was collection of funds from some “end users” to finance the purchase of quantities of wholesale fuel produced from legitimate companies.

The X firm had argued it was a legitimate oil supplier and denied any involvement in the alleged fraud. It applied for the freezing order on its account to be lifted on grounds CAB had failed to disclose material matters to the court last April when seeking that order ex parte (one side only represented).

In his judgment lifting the freezing ordet, Mr Justice Cross said CAB sought that order on the basis of alleged fuel laundering, not money laundering,  and, in that regard, disclosure obligations were not met by CAB.

The Bureau, he found, had failed to tell the court the company’s explanations that all its transactions were legitimate commercial ones backed up by paperwork from legitimate companies.

After “some hesitation”, the judge said he had concluded, notwithstanding that an application for a freezing order on the basis of alleged money laundering might have been successful had all the facts of the matter been put before the court in April, he would lift the order due to the Bureau’s failure to disclose the “non-marginal” matters.

While some matters raised by CAB caused him “some concern”, including the possible supplying by X of its bank lodgement book to a customer allegedly involved in the alleged fraud, that remained only a suggestion or possibility, not an established fact, and was clearly not considered relevant in CAB’s original application, he added.

CAB had denied any material non-disclosure and also argued the court should not lift the order on grounds including CAB’s “immense value” to the public in fighting  crime.

While fully accepting CAB performs necessary work for the State, often dealing with “very dangerous persons”, that alone could not be a basis for not appyling rules of disclosure to it, the judge said.1 Because CAB acts in the public interest, the court must be particularly concerned, when it is bringing ex parte applications, the obligations of disclosure are met.

The case now being made against X was of money laundering, and while a Garda had raised matters of potential concern in an affidavit, the company could have addressed those had they formed part of the original freezing order application, he said.