A SUM of just over £40,000 was paid into the Badgworth Isle of Man account, and subsequently to Mr Michael Lowry, and not £105,000 as had been reported, the tribunal heard.
This emerged in questioning yesterday by Mr Donal O'Donnell, counsel for Mr Lowry, of Mr Albert Dudgeon, an Isle of Man banker with the Rae Brothers Bank.
Mr Dudgeon gave evidence of the setting up of two accounts on the instructions of Mr Noel Smyth, solicitor for Mr Dunne. One of them was called Tutbury and the other Badgworth.
He said there were only two transactions on the Badgworth account, apart from the payment of interest due. This was the transfer of £40,000 into it from the Tutbury account, and its later closure and the transfer of the funds to Mr Lowry through a bank draft for £42,597.26.
Referring to the company called Tutbury, he said the initial instructions came from a firm of accountants, Clarke and Rayton, in the Isle of Man. This company was connected to the solicitors' firm of Noel Smyth in Dublin. Later Mr Dudgeon found out the beneficial owner of this account was Mr Ben Dunne.
The directors of the company were a Ms Patricia Faul and a Ms Jacqueline Lloyd, both residents of the Isle of Sark.
Asked if it was common to have residents of the Isle of Sark as directors, he said "yes". This made it a nonresident account from the point of view of the tax laws in the Isle of Man. The signatories on the account were three directors in Clarke and Rayton, including Mr Michael Anthony Rayton.
He described receiving instructions relating to the transfer of £200 sterling to the Henry Ansbacher Bank, in Mitre Square, in London, payable into the account of Ansbacher Ltd. A letter of confirmation came from the directors. On March 1st, 1990, he received confirmation that the account had been debited, and he debited Tutbury accordingly.
There was a change in mandate in the account in December of that year, when the authorised signatories were either one A signatory or two B signatories. The A signatory was Mr Noel Smyth and the B signatories were two of the directors in Clarke and Rayton.
In August 1991, £40,000 was transferred from the Tutbury account to an account in the name of Badgworth.
On November 11th of that year, he received a fax from Mr Noel Smyth saying he would receive £450,000 into the account from Ansbacher Bankers Ltd. He was instructed to have drafts drawn up on the Tutbury account for the sum of £70,000 in the names of T. Scott, G. Montgomery and M. Blair. This was done and they were sent by courier to Mr Smyth. They were signed by himself and Ms Karen Ward, who worked for him. Asked if he knew the identity of the payees, he said: "Absolutely not."
The drafts came back, having been negotiated through the Irish Intercontinental Bank in Merrion Square, Dublin, and also stamped by the Royal Bank of Scotland, which was the clearing bank for the Irish Intercontinental in the sterling area.
On the instructions of Mr Smyth, he transferred a bank draft payable to Mr Lowry and arranged for it to be collected in the Bank of Ireland in Baggot Street, Dublin.
Referring to the documentation, he said: "It states clearly, `Please issue a draft in the name of Michael Lowry Esquire'."
Turning to the setting up of the Badgworth account, he said he received instruction from Clark and Rayton, and also from Mr Smyth. The letter from Mr Smyth told him to transfer £40,000 sterling into it and debit the account of Tutbury Ltd.
Mr Dudgeon told Mr Anthony Aston BL, counsel for the tribunal, that his note on the form setting it up said that it was for accepting commission paid to an Irish resident by Ben Dunne.
"Were you aware the purpose of the account was to receive payments from Ben Dunne?" He said he was. Asked if he knew the identity of that individual, he said: "Absolutely not."
The funds were transferred and the account closed.
In April 1992 he received a letter from Mr Smyth asking him to issue a sterling draft payable to Mr Michael Lowry for the total sum, together with any interest which had accrued. The total sum was for £42,597.26, less £30 fee for sending it.
It was returned on May 29th, 1992, stamped "Foreign Exchange Ireland" and "Irish Permanent Building Society".
Asked about the formal mandate for the Badgworth, he said the authorised signatories were Mr Rayton, Mr Crowe and Mr Smith from Clark and Rayton. The directors were Ms Patricia Faul and Ms Bertha Anderson in the Isle of Sark.
Mr Donal O'Donnell SC, counsel for Mr Lowry, asked him to clarify two transactions. On May 29th, 1992, he had received instructions to pay out of the Tutbury account £40,000, to be collected in the Bank of Ireland in Baggot Street, Mr Dudgeon agreed.
In relation to the Badgworth account, a single sum of money was lodged. There were two transactions, one which opened the account and one which closed it. There was no other movement into or out of the account, apart from the accrual of interest.
Mr Dudgeon agreed.
"It has been erroneously stated that £105,000 was paid in," Mr O'Donnell said. Mr Dudgeon said he had no note of any figure of£105,000.