People ‘advised’ to open bogus accounts

THE number of bogus non-resident bank accounts opened in Ireland is much higher than originally estimated, according to a former bank official who encouraged customers to participate in offshore scams.

It also emerged a number of officials have been forced to take early retirement because of threats and stress.

Conor O’Mahony, a former assistant manager with the AIB in Killorglin, Co Kerry, said yesterday he, along with many other bank officials around the country, actively encouraged customers to open bogus accounts.

He said the figure of 40,000-50,000 bogus accounts indicated by the Revenue Commissioners was far too low.

“The Revenue have already sent out 40,000 letters to account holders and say all will be delivered by the end of the year. I don’t accept that. I think the real number is a lot bigger.”

Most of the bogus accounts were opened in the middle to late 1980s when DIRT tax was first introduced and interest rates were high.

“It was part of the culture of the time,” said Mr O’Mahony, who also worked with AIB in Killarney. “It was widespread and nobody thought there was really anything wrong with it.”

Mr O’Mahony said he did not want to be regarded as a “bank basher” and had enormous sympathy for his former colleagues who were facing the backlash from their customers.

“A lot of bankers opened these accounts for their family and friends and thought they were doing the right thing. Now these customers are coming back to them and blaming them for the predicament they find themselves in. Some bank officials have even been threatened. Many bankers have suffered huge stress and illness as a result and quite a few have opted for early retirement.”

The Revenue Commissioners have collected €670 million, including €220m from the banks and financial institutions, a further €227m from a voluntary-disclosure scheme and €223m from subsequent investigations. But there have been no prosecutions.

Justice Minister Michael McDowell has vowed to track down and prosecute any official guilty of facilitating customers to avoid paying tax.

A year ago Mr O’Mahony formed The Reaction Group, an association that, for a fee of €250, helps and advises defaulters who find themselves in trouble with the Revenue. The group is preparing a series of High Court actions alleging the banks were negligent in the advice they gave customers.

“The banks are saying that they have paid their dues. But they have to take more responsibility for what their customers are going through.”

Most of Mr O’Mahony’s clients are in their 60s and 70s whose bogus accounts have been closed for over a decade, yet find themselves facing huge bills from the Revenue.

“There are some very sad cases,” said Mr O’Mahony. “Some people are being cleaned out completely.”

An AIB spokesman said the bank had co-operated fully with investigations and did not wish to comment.