Banks ‘advised clients about bogus accounts’

A GROUP representing people with illegal non-resident bank accounts has criticised claims that banks never encouraged customers to set up bogus accounts.

These account holders are facing massive tax bills following a Revenue clampdown. Finance Minister Charlie McCreevy said the Revenue Commissioners have found no evidence of banks encouraging the practice during the 1970s and 1980s.

“No evidence has emerged from these meetings to date that financial institutions presented or promoted bogus non-resident accounts to their customers,” he said. The Cork-based Reaction Group said it’s going to sue the banks because it alleges they advised people to sign up for bogus products.

The founder of the group and former bank official Conor O’Mahony said he advised people about the illegal accounts during his 17 years working with AIB. “Even the Public Accounts Committee found there was widespread evasion of DIRT tax by the banks and that can’t be denied,” said Mr O’Mahony.

“Bank officials were told about the practice and we did encourage customers to set up these accounts.”

Reaction Group charges a fee of 250 for advice on how to deal with the Revenue. Fine Gael TD John Deasy who asked a Dáil question on the issue described the Revenue’s findings as “extraordinary.”

“I think people should be penalised for tax evasion, but I don’t think it is good enough for the Revenue to say that it cannot pursue bank officials,” he said.