A WATERFORD subcontracting company has been fined almost €1 million after being convicted of a VAT fraud involving over €800,000.
Cappoquin Civil Engineering Limited failed to appear for the trial at Dublin Circuit Criminal Court where the jury took just 38 minutes to return guilty verdicts on each of 32 charges against it.
Cappoquin, whose main director is Christy Landers from Dungarvan, made fraudulent returns to the Revenue Commissioners and failed to remit over €775,000 in VAT payments for the years 2002-2004, the court heard.
The jury heard evidence that the company declared €262,713 in gross sales for 2002-2004 and remitted only €32,451 in VAT on that amount.
Dominic McGinn, prosecuting, said Cappoquin should have remitted €808,261 in VAT payments on unrecorded gross sales for this period of almost €7 million, leaving a shortfall of €775,810.
Cappoquin was convicted on: 13 counts of "knowingly and wilfully" making incorrect VAT returns on dates from April 2002 to February 2004; 14 counts of failure to remit VAT payments; three counts of failing to deliver corporation tax returns, and two counts of failing to keep records of all transactions for 2002, 2003 and 2004.
Judge Desmond Hogan imposed €960,000 in fines as follows: €30,000 on each of the 27 charges relating to VAT, and €50,000 on each of the three corporation tax counts, with the final two counts relating to not keeping proper records taken into consideration.
Mr McGinn told Judge Hogan that the maximum fine on each of the tax charges was €126,970.
Judge Hogan told the jury at the start of the two-day trial that it was "a most unusual case" and that a plea of not guilty had been entered on behalf of the company which was not present or represented. He said the jury must still hear the evidence and the facts still had to be proven "beyond a reasonable doubt".
Mr McGinn said Cappoquin Civil Engineering Limited was a subcontracting firm incorporated on May 2nd, 2001, and registered for VAT and corporation tax.
The Revenue investigation began following an audit on a development company which showed that Cappoquin had grossly understated the amount it received from this company on its VAT returns. Cappoquin had deliberately misled a part-time bookkeeper by providing a very limited amount of figures to her.
Mr McGinn said Landers was one of the firm's original directors. John Joseph Gannon of Fort Brown, Lavallay, Tuam, Co Galway, became a director on January 16th, 2002.
Mr McGinn said Mr Gannon was replaced as a director from December 31st, 2002, returned as a director on March 19th, 2004, until he resigned again on May 5th, 2005.
Ann Dwyer told Mr McGinn she was employed in a private capacity by Mr Landers to do some bookkeeping for Cappoquin and did not have access to Cappoquin's bank accounts and no information on the company's actual trading situation.
Patrick Howard, a tax inspector in Waterford, told Mr McGinn that he noted a discrepancy of some €470,000 between the payments totalling €579,152 paid in 2002 by Wellfront Construction Ltd to Cappoquin which recorded gross sales of only €106,812 for that year.
Daniel Hibbett, a director of Wellfront Construction, said his company used Cappoquin's services from about January 16th, 2002, initially for work at a site at Stepaside, Co Dublin.
Mr Hibbett confirmed that he produced 48 invoices to the Revenue Commissioners showing total payments of almost €1.5 million to Cappoquin.
Similar evidence from directors of several other companies was given in court, and in some cases statements made by them were read by Mr McGinn, indicating the actual amounts paid by them to Cappoquin for its services in the period 2002-2004.
Patrick Faughnan, an inspector of taxes who investigated the case, said he had cross-referenced all this information and found that not only had Cappoquin made no effort to keep proper trading records but had recorded sales of only €262,713, where it had sales of €6.9 million.
He said it had also deliberately set out to mislead its bookkeeper with false documentation.
Mr Faughnan said that copies of invoices allegedly furnished to a company called Tarman, and given to Ms Dwyer to prepare the VAT returns, were totally different to the invoices actually received and paid.
"The invoices given to Ms Dwyer were much reduced in a deliberate attempt to mislead," he said.
Mr Faughnan said 13 main contractors who employed Cappoquin had kept proper records and were helpful. He had no help to the same degree from Cappoquin directors.