Cork firm that secured EU grant for early detection of forest fires pleads guilty to fraud

Court heard company 'misused part of the pre-financing in order to pay two companies for providing services for their casino and hotel projects in Cyprus'

Company was fined €15,000 and ordered to pay €5,000 — consisting of €1,000 to each of five Cork charities. Picture: Larry Cummins

European grant support was secured for research into the design of a system for early detection forest fires, but a company involved in the application was fined for a fraud against the European Union in respect of some of the grants claimed — the first Irish prosecution of its kind.

Lightwave Optics Ltd, trading as Irish Precision Optics, of 22 Summerhill North, Cork, was fined €15,000 and ordered to pay €5,000 — consisting of €1,000 to each of five Cork charities, Simon, St Vincent de Paul, Cork Penny Dinners, Share, and the charity associated with search and rescue in Cork city.

A plea of guilty was entered on behalf of the company at Cork Circuit Criminal Court to a charge that between December 11, 2013, and September 30, 2015, it did commit in whole or in part a fraud affecting the European Communities financial interests, relating to expenditure, namely European Research Executive Agency (REA) payments consisting of pre-financing and interim payment, amounting to €587,350. 

While this was the sum referred to in the charge, the sum actually involved, according to evidence at the sentencing hearing, was closer to one tenth of this amount.

An earlier charge in similar terms against director of that company, Tony Herbert, of Summerhill North, Cork, was withdrawn by prosecution senior counsel Donal O’Sullivan after the plea of guilty was entered by the company.

Inspector Clodagh O’Sullivan said 78-year-old Anthonyo (Tony) Herbert is the director of a company known as Lightwave Optics Limited, also known as Irish Precision Optics, with offices at Summerhill North, Cork, and an application was made for EU grant support for a research project.

The European Anti-Frand Office became concerned about alleged irregularities and an investigation was set up. 

Insp O’Sullivan said Lightwave Optics Ltd “misused part of the pre-financing in order to pay two companies for providing services for their casino and hotel projects in Cyprus, with no link to the UV-Multicam project.

“The company declared inflated personnel costs for Mr Anthony Herbert. Inaccurate subcontracting costs were declared by using falsified invoices or invoices issued in relation to other commercial activities or projects.” 

Brian Mulvany, defence barrister said the investigation found €255,000 of the grant applications by a consortium of companies was attributable to Lightwave Optics Ltd, and that of this, €191,000 was found to be legitimate. The remaining sum has been repaid in full by the company following civil proceedings, Mr Mulvany said.

Judge Helen Boyle said, in imposing a €15,000 fine on Lightwave Optics Ltd, and requiring it to pay €5,000 to charity: “Obviously, it is in everyone’s interest that European funds are dispensed appropriately and that there is not an overspend of taxpayers’ money.

“I know there is not any loss now following extensive communications with the company involved, but it is a relatively serious matter. Any court must view seriously the appropriateness of the allocation of taxpayers’ money.

“Inspector Clodagh O’Sullivan has done a sterling job on what was the first prosecution of its kind in Ireland.” 

The judge said in such a complicated case, the plea of guilty by the company was of particular value and she also commented the research into the possible detection of forest fires at the earliest possible stage would have been of benefit to humanity had it been developed successfully.