Businessmen to be sentenced next month

Two businessmen who defrauded Ulster Bank of over £1m (€1.27m) to keep their business afloat are due to be sentenced on June 14 next by Dublin Circuit Criminal Court.

Niall Clarkin, the managing director of the Label Centre Ltd, and Gerard Roche, it's general secretary and financial controller, lodged fictitious invoices with Ulster Bank in the hope that their company would get out of financial difficulty and they could repay the money.

Detective Sergeant Kevin Gateley said Ulster Bank operated a system known as invoice discounting, whereby they loaned companies money on receipt of invoices and they paid them 75% of monies owed to them.

When the company had been paid for their products and services they repaid the bank and the bank took their fee from this payment.

Det Sgt Gateley, of the Garda National Bureau of Fraudulent Investigation, said Ulster Bank Commercial Services Ltd had no reason to believe the invoices they received from the Label Centre Ltd were fictitious.

Clarkin (aged 61), of Springfield Park, Foxrock, and Roche (aged 68), of New Row Square, Dublin 8, pleaded guilty to carrying on a business with intent to defraud Ulster Bank between January 1, 1996 and October 14, 1998.

Judge Frank O'Donnell said he needed time to consider the matter and adjourned sentencing until June 14 with both remanded on continuing bail.

Det Sgt Gateley said Clarkin was one of the founding members of the Label Centre Ltd in 1981 and the business was very successful up until the mid-nineties.

Around about 1996, the company invested over £1m (€1.27m) in new technology, described as an over-ambitious expansion project, and their sales figures were down.

Clarkin, with the help of Roche, then concocted the scheme of defrauding Ulster Bank.

Roche had no stake in the company and his only motive for getting involved was loyalty.

Both instructed the accounts staff on how to issue the invoices.

Det Sgt Gateley said Ulster Bank gave its customers 90 days to repay the money at which stage the Label Centre Ltd issued a credit note, thereby cancelling the invoice.

Ulster Bank held a meeting on October 15, 1998 at which a director of the Label Centre Ltd was present. Clarkin instructed him to admit to the scheme because the realisation had set in that there was no chance of repaying the money.

They estimated the figure outstanding was around £770,000 (€978,000) but Ulster Bank assessed their accounts and discovered they were actually at a loss of £1,106,120 (€1.4m).

The Garda Bureau of Fraudulent Investigation were called and the company went into receivership.

Both men filed for bankruptcy and Clarkin reached a High Court settlement of £169,160 (€215,000) and Roche a settlement of £270,000 (€343,000). Both payments received the approval of their creditors. The two men had to sell their family homes as a result.

Ulster Bank received £444,000 (€559,000) repayment thanks to the settlements after another director paid £5,000 (€6,400). No charges were brought against him. The bank was still owed nearly £700,000 (€889,000).

During the period of the fraud Clarkin was also forced to get substantial loans from family and friends to help him out and this brought him further into debt.

Mr Brendan Grehan BL, for Clarkin, said he had to re-employ himself and was now back to where he was over 20 years ago, on the road as a salesman. He never lived a lavish lifestyle and only persisted with the hope that 'a sunny day' would arrive and the bank could be repaid.

Mr Patrick Marrinan SC, for Roche, said his client had now retired and stood to gain nothing, directly or indirectly, in the scheme. He should have been a man now enjoying his retirement with a nice nest egg but wasn't.