Director spared jail for €340k Vat fraud

An 81-year-old company director who failed to pay almost €340,000 in Vat returns which had been paid to his company by customers was given a two-and-a-half-year suspended jail sentence yesterday.

Michael Grimes of Kilpatrick, Innishannon, Co Cork, was sentenced at Cork Circuit Criminal Court.

None of the money was ever sent to Revenue. Judge Brian O’Callaghan said this was an aggravating factor in the case.

Denis O’Rourke, an authorised officer of the Revenue Commissioners, said BV Securities Ltd was selling plant and machinery and in the relevant period had €1.95m sales. On the basis of 46 invoices, the company was liable for €340,000 in Vat.

“That particular amount was separately invoiced to customers of the company — 46 invoices to 13 different customers. The Vat was paid by the customers and lodged by BV Services to a bank account. Dr Grimes was signatory to that account. That total (over) €338,000 was not remitted. No part of it, as of yet, has been remitted to Revenue. The exchequer did not receive the funds. Revenue was able to establish he was director and secretary and shareholder. He was responsible for Vat,” Mr O’Rourke said.

Prosecution SC, Alice Fawsitt, said: “Revenue would be first to say that his plea of guilty was of enormous significance.”

Mr O’Rourke agreed.

Defence SC Tom Creed said it would have been a long and complex trial without the pleas of guilty to the sample counts of failing to remit Vat while he was a director on dates in 2007 and 2008.

Ms Fawsitt said the Revenue Commissioners had been asked their views in advance of sentencing on the possibility of the accused getting a suspended sentence. Their view was that this would be acceptable on an extensive set of conditions.

Judge O’Callaghan said: “The defendant is, from this day forth, disqualified from acting as a company director and must keep the peace and keep his tax affairs up to date.” He is also required to refrain from vexatious communications with the Revenue Commissioners.

Mr O’Rourke said, at the end of his evidence outlining the background to the crime, that it would be very important that Grimes would cease to be a director of any company for a period of five years.

Referring to the requirement on the accused not to have any vexatious interaction with Revenue, Mr O’Rourke said: “If he kept away from Revenue that would be the most helpful thing he could do.”

The judge said of the crimes, which carried a possible jail term of five years: “This was premeditated and well-planned, the culpability is high. €340,000 was lost to Revenue. That loss is suffered by society not having those funds available.”

The judge noted from the defence submission that the defendant’s financial position is not robust and he also noted health issues.

Mr Creed SC said a burglary at the defendant’s home recently had been a very upsetting experience for Grimes and his wife. Mr Creed also said that the plea of guilty has obviated the need for a trial which would have been very costly for the State as it would have been protracted and required a large number of witnesses.


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