High Court finds NIB encouraged clients to evade tax

The High Court inspector’s report into practices at National Irish Bank has found that the bank unlawfully encouraged people to evade tax through bogus non-resident accounts.

The report said the opening and maintenance of such accounts was widespread throughout the NIB branch network. It said senior management was aware of the existence of bogus non-resident accounts, but failed to ensure that tax was paid on the deposits.

The High Court report also said that fictitious and incorrectly-named accounts were opened and maintained by NIB to encourage tax evasion, while the bank also failed to deduct tax from interest paid on Special Savings Accounts and improperly overcharged some customers.

The report made adverse findings against several senior officials from NIB, including former chief executive Jim Lacey. Adverse findings were also made against former Fianna Fáil TD Beverley Cooper-Flynn, who worked as a financial services manager at NIB, and KPMG, the bank’s external auditors.

Publishing the report today, Paul Appleby, the Director of Corporate Enforcement, said he would be exploring his legal options with a view to seeking prosecutions for any offences committed under the Companies Acts.

He also said he was considering civil action to disqualify a number of people whose conduct is criticised in the report.

NIB is facing a total bill of €64m because of the issues tackled in the report, including the cost of the High Court investigation.