In a British courtroom over the next six months, a complex trail of financial dealings allegedly between British and Irish companies will be minutely examined. At the centre of the case is an Irishman, Daniel O'Connell, and two others, John Dawson and Bernadette Devine, who are denying five counts of tax evasion and one of cheating the public revenue.
The prosecution in the opening statement this week alleged that there were links between Mr O'Connell and the former Lord Mayor of Dublin, Fine Gael TD and minister of state, Michael Keating. It could be some time before Mr Keating has any opportunity to give his side of the claims being made but nevertheless his name will continue to crop up throughout the lengthy case.
In the Middlesex Guildhall Crown Court, which is actually in the heart of London, the basis of the prosecution case as told to the jury over three days was that Mr O'Connell (46) allegedly defrauded the British taxpayer of £20 million by pretending to export computer chips back to the Republic.
The alleged fraud was based on the buying and selling of £100 million worth of Intel Pentium Two Processor computer chips. Mr O'Connell allegedly claimed to computer dealers that he was selling their products on to firms in Ireland, therefore avoiding the payment of VAT as it is within the EU. He operated a network of companies in the UK and produced bogus paperwork claiming they were exporting the computer chips to Ireland. He was also involved in the Irish firms which purported to be receiving the goods, prosecution counsel Peter Rook QC alleged.
Most of the Intel Pentium 11 Processor computer chips went to Middlesex to companies run by Ms Devine. Mr Rook said that in many instances the goods were not going to Ireland. In reality nearly all the chips stayed in the UK and the Irish firms which provided the paperwork were all part of the fraud. As told by Mr Rook, Mr Keating allegedly operated a firm called Irish Semi-Conductors which purported to buy the computer chips from Mr O'Connell for sale in the Republic.
The jury was told that along with a number of other companies, Irish Semi-Conductors backed up Mr O'Connell's bogus business dealings. Mr O'Connell was helped by Mr Keating, Mr Rook alleged. The prosecution also alleged that Mr O'Connell and Mr Keating used airline tickets to fly between Ireland and the UK but most of the tickets produced as proof of export were never used.
London supplier AJM dealt with Mr Keating and another man, John O'Neill, believing that Irish Semi-Conductors was Mr O'Connell's legitimate customer, the court was told.
In March last year, when customs officials went to the Grosvenor House hotel in Park Lane, London, where Mr O'Connell was staying, they found diaries in the hotel room and at his home in Catherine Street, Limerick. In a simultaneous raid on the home of Mr Dawson in Swansea a diary was found containing references to Mr Keating "who appeared to have been involved with Irish Semi-Conductors", the prosecution said.
There was also a list of telephone numbers including Mr Keating's mobile and home numbers. Mr Rook went on to detail how the alleged fraud was carried out. Ms Devine (33), Perivale, Middlesex, a former councillor for Ealing, west London, bought £100 million worth of the Intel Pentium 11 processors at her base in Middlesex.
The court was told that Mr O'Connell sold them to Ms Devine at a loss but then pocketed the VAT which he spirited away to offshore bank accounts. Ms Devine then sold the goods on at a profit, it was alleged. Mr Dawson (58) allegedly bought the airline tickets and transported the chips from the London suppliers to their real destination a few miles away in Middlesex. The fraud was alleged to have taken place between 1996 and 1998. The court was told the proceeds of the fraud totalled over £19.5 million and by February 1999, Mr O'Connell had transferred £4.2 million to offshore accounts in countries including the Bahamas, Central America and Belize. The court was told the fraud continued until December 1998 when an Irish newspaper ran a front-page article reporting a tax evasion scam involving computer chips. Mr O'Connell and Ms Devine ceased trading with each other and the following month efforts were made to transfer some of the money to offshore accounts in the Bahamas. When Mr O'Connell appeared to be on the verge of resuming business in March 1999, the three defendants were arrested, the court was told.
After the opening, the first of hundreds of witnesses to be called in the case gave an indication of the scrutiny and painstaking examination of the volumes of documents that will mark the trial over the coming months. Mr Brian Wadlow, a director of a company selling off-the-shelf companies, gave evidence about five limited companies which it was alleged Mr O'Connell set up to buy the computer chips from London dealers. His testimony will continue on Monday, the second week of a trial which will continue until the summer.
