Many accounts were opened at a time when a bank's manager and officialswere very influential in their local community, writes Siobhán Creaton, Finance Correspondent.

Some people will end up with nothing when the Revenue is finished with

them. Their nest egg and retirement plans are destroyed. It has turned into

a nightmare for many

Registered letters rarely bring good news and particularly so when they are from the taxman. In the past couple of weeks, 30,000 individuals who are the focus of the Revenue Commissioner's latest round-up of tax dodgers have been asked to sign for this most unwelcome correspondence.

They should have known it was on its way. Revenue chairman Mr Frank Daly repeatedly warned that there was "no hiding place" for these individuals and that he would shortly be "knocking on their doors".

They are the people who have been identified as having used bogus non-resident accounts to hide money from the Revenue, in some cases going back as far as 30 years. Many are people in their 50s and 60s who fear they are facing financial ruin. They are stressed out, upset and afraid, but above all they are blaming the Irish banks for turning them into criminals.

A reaction group has been established in recent weeks to offer advice to these individuals. The group was founded by former bank officials who, for a fee of €250, will assist account holders to prepare to deal with the Revenue. It will also put them in contact with others in the same situation if they want. But its main objective is to compile a legal case against the Irish financial institutions, accusing them of having openly advised and coerced their customers to break the law.

The key individual in the reaction group is former AIB assistant manager Mr Conor O'Mahony, who has spoken to hundreds of these tax dodgers in the past couple of weeks. Around 90 per cent of them are AIB customers, he says. "We are advising them to settle up because they should but also for their own peace of mind. There are some very sad stories."

Twenty or 30 years ago there were very few options for people searching for a home for their savings. Banks could offer customers a deposit account but there were no sophisticated products like there are now. It was a time when tax rates were over 50 per cent. Interest rates were also high and customers could have been offered a rate of interest of up to 20 per cent on their savings.

It was also a time when a bank manager or senior official would have been one of the most influential individuals in a local community, on a par with the parish priest and the doctor. It would be fair to say that if the local banker suggested a good home for a customer's savings, few would have contradicted them.

A number of the tax dodgers who are now being forced to atone for their sins have spoken to the The Irish Times, explaining how they ended up on the Revenue's "Wanted" list. Many were naive, while some knew it was wrong but believe the banks bear much responsibility for their current predicament.

A Bank of Ireland customer from Co Mayo was very upset to have received her registered letter. She had lived abroad for many years and had legitimately held a non-resident deposit account that was exempt from Deposit Interest Retention Tax (DIRT). "I was very stressed out when the letter arrived and got very little sympathy from my local bank. In fact the manager hung up on me."

She, as it turns out, is one of the lucky ones. It has been established that she should not have received this letter and will not have to dip into her savings to pay the taxman. But it could have been otherwise.

"I remember that when I did move back here I had bought some property and went to the bank to change my address to my new Irish address. At that time a very senior official at that branch told me not to bother changing the address on the account to avoid paying DIRT tax. I said that I wanted to change it because I was now living here."

After the rudeness shown by her local bank manager she is considering moving her account elsewhere and has great sympathy for some of the individuals who held these accounts. "The banks have shown such arrogance and will not take any responsibility for what happened. They did encourage people to open these accounts."

A man in Co Donegal is coming to terms with the fact that he will probably have to make a huge settlement with the Revenue that may leave him in dire straits. His account was opened in 1981 and initially contained more than £100,000 (€127,000). The account would have attracted a high rate of interest and further lodgments were made over the year. He is facing interest and penalties nearly double the amount held on deposit on top of the tax that is due.

He says he rues the day the bank official from the local AIB called to his house to suggest that he opened a non-resident bank account.

"He came to the house shortly after I had started a new business and suggested that I should put some money on deposit. I had moved back from the UK and had some funds from a house that we had sold. The bank official said he knew how he could avoid paying tax on those funds."

He claims that the banker suggested an address in Scotland that could be attached to the account to make it appear as though it was owned by someone living outside the State. "I would never have known about this type of account if he hadn't suggested it."

The account was closed in 1998. His accountant is attempting to calculate how much money he will have to pay. It's a severe blow.

The registered letter has also caused great pain and distress to an elderly couple in Co Kerry - he is 88, his wife 84. He is in poor health and his memory is bad.

His wife had never been in the local bank in her life and now she has to deal with the Revenue.

A relative who spoke to The Irish Times says she is not disputing that the account was opened but feels that it was opened based on very bad advice.

"I had sometimes gone with him when he was going into town. He would hire a hackney as the family didn't have a car and I remember the bank manager bringing him into his office. I can only assume that he was advised to open one of these accounts and that he took that advice."

She points out that this man was not well educated but a small farmer who certainly would not have known to seek one of these accounts.

"The account had an address in the UK. He was never in England in his life and does not have any family there.

"I went to the bank last week. The manager listened and said there had been other problems with customers but that it was up to the account holder to sort things out with the Revenue. I am very angry. I feel he was very badly advised."

Mr O'Mahony says he has spoken to hundreds of these individuals and that the reaction group is awaiting legal opinion as to whether it can proceed with a class action against the banks. He would have opened some of these accounts for people during his career with AIB.

"I was part of that culture. Progress in terms of your career was based on results."

He says bank officials were encouraged to bring in new business and there was great rivalry between various branches for this type of business.

"We are quite happy that we will be able to show that these customers were badly advised."

A key factor in any future legal action will be the actual documentation signed by the account holders when the non-resident accounts were opened. It will show their signature together with an overseas address. On the reverse side a history card should also be attached, which will detail the customer's name and their local address. The account holders will be attempting to use these documents to attach blame to the bank for wrongfully opening these accounts.

"Some people will end up with nothing when the Revenue is finished with them. Their nest egg and retirement plans are destroyed. It has turned into a nightmare for many people and ruined their quality of life. The day will come when they have settled with the Revenue but there will bea backlash against the banks."

The reaction group can be contacted at 021-4547011