THE DIRECTOR of a security firm, which ostensibly outsourced its business to an American-based company, had actually established the company himself, evading tax totalling €327,000 in the process, Dublin’s Circuit Court heard yesterday.
Gerard Dunne, of Steeplechase Wood, Skryne Road, Ratoath, Co Meath, pleaded guilty on a number of representative counts including delivery of a false return in respect of both VAT and PAYE on dates between 2000 and 2005 as director of PR Security Ltd.
John Flynn, of the investigation and prosecutions division of the Revenue Commissioners, said that a number of businesses, including the Guinness Storehouse and Jameson Distillery, outsourced their security to the company, paying the firm inclusive of VAT which PR Security were then required to pay to the Revenue minus any legitimate expenses.
However, he said that during a Revenue audit of PR Security Mr Flynn claimed the company was not liable for VAT or employee PAYE as it was outsourcing a large proportion of its business to another, Worldwide Security.
The Revenue auditor was not satisfied as to the legitimacy of the US-based company as, although it had an American tax number, or IRS number, it was not registered for VAT in Ireland.
The Revenue Commissioners subsequently obtained search warrants, which allowed it to gain access to Mr Dunne’s property and computers belonging to him.
In its investigations Revenue discovered that all cheques to Worldwide Security were made out to cash and endorsed to either Gerard Dunne or G Dunne.
The address for the US-based security company was that of a US company called Delaware Corporation, which sells corporate IDs and which, records suggest, sold the Worldwide Security ID to Mr Dunne in 2000.
The court heard that Mr Dunne’s tax liabilities related to €114,397 in unpaid VAT and €212,486 in unpaid PAYE and PRSI.
Caroline Biggs SC, defending, said mitigating factors included the fact that Mr Dunne had no previous convictions and had entered a guilty plea. She noted he had offered his pension entitlements as a means of mitigating the outstanding money but received a letter from the Revenue Commissioners on July 22nd that it could not accept this as payment.
Judge Patricia Ryan said that, given the short time period since the correspondence, she had to give Mr Dunne an opportunity to seek an alternative means of repaying the Revenue Commissioners and put in a date for him to return before the court on October 28th.
However, she noted that this did not mean she was ruling out a custodial sentence in the case.