Businessmen under investigation for VAT fraud face assets freeze

A NUMBER of businessmen in Cork face having their assets frozen as a result of a major investigation by the Criminal Assets Bureau into suspected multi-million euro VAT fraud.

Officers attached to the CAB have begun sifting through volumes of documentation taken from the homes and offices of the businessmen as well as from solicitors and accountancy firms in the city.

“The objective of the investigation is focused on profits generated from VAT fraud by the companies under investigation and their principals and the use of that money to purchase land in Cork,” said an investigating source. In all, around 20 premises in Cork city were raided by the CAB as part of the operation, backed up by local gardai in Anglesea Street.

The swoops on Thursday and Friday last followed investigations carried out by the CAB, along with British Customs and the Revenue Commissioner’s Customs division here. The investigation began when gardai in Cork City noticed individual businessmen in the city were suddenly displayed trappings of wealth.

Suspicions were heightened when the businessmen bought up large, and expensive, tracts of land on the Cork coastline, all for cash.

“People who were riding bicycles three years ago, were suddenly driving top of range Mercs and buying up land, all for cash,” said a source involved in the investigation.

The land, involving a number of farms, is estimated to be worth around €10 million. The businessmen intended to develop it as a golf course.

CAB established with the help of British Customs and Irish Customs that the men were involved in the import-export business.

They suspected their companies, in Cork and in Britain, were involved in massive VAT fraud, known as “carousel” fraud.

Carousel fraud is conducted by setting up companies in different countries and claiming VAT back from sham sales of goods between those companies.

The whole sales process exists only on paper, so no one ever pays VAT.

These sales continue in a cycle, generating massive profits for those involved.

In the Cork investigation, officers suspect that the companies were involved in fake sales of high-value computer processing units (CPUs).

CAB investigators have traced the profits to bank accounts across the world, including Dubai, in the Persian Gulf.

They also discovered that the money entered Ireland for the first time when it was used to buy the land.

Sources said it will take investigators some time to examine the documentation and build up their case.

If they have sufficient evidence, the CAB will apply to the High Court stating the land in question is possibly the proceeds of crime.

It will then be up to the businessmen to convince the judge that the money is from legitimate means, if they are avoid having their assets seized.