Sligo businesswoman made '£19m from VAT fraud'

A Sligo woman pocketed a £19m fortune in a sophisticated sting on the VAT man in Britain, a court heard today.

Bernadette Devine, 34, used bogus paperwork and an array of front companies to create the smokescreen that vast numbers of valuable computer chips were being shipped to Ireland, it was claimed.

But the components never left Britain and computer expert Devine was able to claim back £19m from the public purse there.

At one point the con was so massive she was claiming back £1m every month, the jury at Middlesex Guildhall heard.

Peter Rook QC, prosecuting, said the elaborate fraud could not be described as ‘‘a cornershop fiddle.’’

Devine’s main partner in crime was entrepreneur and car dealer Daniel O’Connell.

O’Connell, 47, of Catherine Street, Limerick, was jailed last August for his part in the scam, said Mr Rook.

The pair used companies in London, Bournemouth and the Isle of Man to ‘‘cream off the VAT’’ on highly valuable computer parts such as Pentium 3 processors.

The swindle was based on the VAT-free status of goods exported from one EC company to another.

Cheap airline tickets were also used to create the illusion that the parts had been shipped abroad.

However, while the VAT was claimed back, the valuable chips were rarely transported.

As the scam progressed a more sophisticated form of ‘‘carousel fraud’’ was used, explained Mr Rook.

Some goods would be shipped out but they were often sent back.

The same cargo could be sent backwards and forwards to repeatedly claim back the tax, explained Mr Rook.

In all goods worth £100m were used over a three-year period, the court heard.

Devine, from Keash, Co Sligo, even moved to the Isle of Man for tax purposes because of the huge profits generated.

Her computer empire was run from offices in Perivale, west London, under the name Keash Systems International.

She also set up CIS Limited in Douglas, Isle of Man, to handle some of her deals and money from the fraudulent trading.

Another smaller company, KSI Limited, was opened in Bournemouth to handle smaller deals.

Mr Rook told the jury that Devine did employ others, but he added: ‘‘She was very hands-on. She handled personally most of the large deals, something like 90% or more.’’

He said Devine had a ‘‘special working relationship’’ with O’Connell, who is originally from Ballybrack, Co Limerick.

‘‘They had this very neat agreement where they could both enjoy the fruits of the dishonest misappropriation of VAT.’’

Devine, with an address at Empire Road, Perivale, denies one charge of cheating public revenue, one of fraudulent evasion of tax and four counts of being knowingly concerned with the fraudulent evasion of tax between February 1996 and March 1999.

The court also heard Devine and O’Connell had business partners in their computer scam, including prominent Irish politician Michael Keating and another man called John O’Neill, who were directors of Anglo-Irish Merchants, a company with links to O’Connell, said Mr Rook.

‘‘It wasn’t just O’Connell and Devine that were the two major players.

‘‘In O’Connell’s situation in the early days there was another man who the prosecution say was involved and he was called Michael Keating, a former Lord Mayor of Dublin and an Irish politician.

‘‘The prosecution say he was involved with two of O’Connell’s Irish companies.

‘‘He was clearly well involved, the prosecution say, particularly during the early part of the fraud.

‘‘And there is evidence that he received benefits from fraud and also evidence to suggest John O’Neill may have been involved in that situation during the early part of the fraud.’’

The trial was adjourned until tomorrow.