This story was first published in the Irish Mail on Sunday on 21/10/2012
By Michael O’Farrell
Investigations Editor and Georgina O’Halloran
THIS is Ireland’s most reclusive and successful moneylender – on a brief trip home from his sun-kissed Marbella mansion.
A world away from the many underprivileged Irish communities where his company makes millions by charging interest rates in excess of 200% on small cash loans, Raymond William Murray lives a life of luxury and opulence.
Photo credit – Michael Chester
And it’s all entirely legal. Behind high electronic security gates and pristine whitewashed walls, his lavish villa – complete with pool and live-in housekeeper – has direct, private access to the El Paraiso Golf Club.
One of Spain’s oldest and most prestigious courses, the club’s fairways extend across the base of the peaceful El Paraiso valley beneath mountains to the north and the sparkling Mediterranean to the south.
Back home on Cork’s northside, Mr Murray’s moneylending company, Marlboro Trust Ltd, occupies an ugly, sprawling warehouse perched on a drab hillside overlooking the largely deprived community of Mayfield.
The area contains the second highest concentration of local authority housing in Cork (58.6%) and has been identified as one of the State’s worst unemployment blackspots, with more than 23% of working-age inhabitants permanently out of work. Less than 1% of the children here go on to third-level education.
Golf is not a preoccupation in these parts. But the underprivileged people of this community and scores of others like it have for decades funded the golfing activities and privileged lifestyle of Mr Murray and his family.
Depending on one’s viewpoint, moneylenders like the Murrays are either considered merchants of misery who profit from the misfortunes of others – or a vital lifeline allowing people credit when they otherwise would not get it. Either way, Marlboro Trust is certainly not suffering in the face of a deep recession.
In fact, the prevailing troubles of the main banks – two of which are closing their Mayfield branches – will likely increase the demand for Marlboro’s credit services.
The Murray family continue to make vast profits from lending. They are now among the biggest landlords in Ireland, with hundreds of rental properties to their name.
At present, Marlboro Trust – the Murray’s main holding company – is licensed by the Financial Regula-tor to give cash loans for periods of 21 days at an interest rate of 72.51% and an additional collection fee of 14 cents per euro. This equates to an astonishing 210.7% APR – more than enough to fund a privileged lifestyle which includes several trophy homes, luxury cars and the princely Costa Del Sol villa.
Yet Mr Murray and his family have managed to remain largely anonymous. Despite running one of Cork’s top 20 companies, the family have never before been profiled in any newspaper or photographed publicly, although they are well known among Cork’s affluent merchant classes.
Now semi-retired, 84-year-old Raymond William Murray established the business from a base at No 4 Marlboro Street Cork on April Fool’s Day 1965, simply calling the company Ray Murray Ltd. In the 1980s Mr Murray was tipped as a possible election candidate for Fianna Fáil.
However, following a 1985 Today Tonight documentary, which partly featured his business, he moved to Spain, although he still keeps a home in Cork. By the time he changed the name to Marlboro Trust in 2004, he had almost 60 collection agents (known in the business as travellers) using a €250,000 fleet of cars collecting door-to-door repayments each week throughout the country.
Although still a director, Mr Murray handed over his shares and day-to-day control of the family business to his sons, Finbar and Kevin, and a daughter, Cathryn, between 2004 and 2011. Today the moneylending business is run through a subsidy called Marlboro Trust (Finance) Ltd, which made loans of €5.5m in 2010 and posted a retained profit of €4.8m.
Photo Credit – Michael Chester
Since loans are typically small – in the hundreds of euros – the figures indicate that tens of thousands of struggling families, who could not otherwise obtain money, availed of credit from Marlboro despite the punishing interest rates.
With most banks and credit unions effectively shut for lending, the Murrays have little doubt that demand for their services will continue to grow.
‘Despite the prevailing economic conditions, the directors expect the present level of activity will be sustained in the coming financial year,’ a note to the current company accounts reads.
Through another subsidiary, Marlboro Trust (Retail) Ltd, the Murrays are making further millions.
Based in the sprawling Marlboro warehouse overlooking Mayfield, this is a massive retail credit business which provides goods for inflated prices based on weekly repayments.
Inside the front door of the building, which opens out into Mayfield’s Aldi carpark, is a reception area where catalogues of household furniture are displayed.
Beyond that, through a door that must be buzzed open by a staff member, a vast shop floor is stocked high with everything from shoes to sports gear and toys. Behind counters, sales staff deal with phone and face-to-face queries about electronic equipment such as computers TVs and jewellery.
Everything a busy home with young children could ever need is here – at a price. Instead of lending money to buy the items, the company provides the items themselves at a premium price that already has the interest front-loaded. Repayments are then collected over 20 weeks from homes by the company’s 66-strong fleet of collection agents.
The clever arrangement allows the company to advertise ‘interest free credit’ on all its retail goods. Attractive, glossy catalogues, distributed to thousands of homes, state ‘APR Zero – Easy Confidential Weekly Payments’.
Credit agreement dockets issued with sales make the same claims in bold black ink. ‘Cash and credit price the same. APR Nil.
Orders can be phoned in and delivered directly to your door but the prices in the catalogues – frontloaded with interest – are far more than the same items would cost in nearby shops.
The MoS compared prices in the company’s latest sports catalogue with those available in Cork’s high street and found that Murray Trust customers are often paying between €20 and €30 more for items such as trainers and clothing (as detailed elsewhere on this page).
Company accounts reveal that the Murrays’ retail credit business is booming. It far surpasses the family moneylending business. Last year the company, which employs 134, had a turnover of €15m, made a gross profit of €8.1m and was sitting on retained cash profits of just over €15m. The directors – including Raymond Murray – paid themselves €1.1m.
Many more millions are resting in other Murray family companies. Hillcrest Holdings – a property rental company – posted assets of €8m in 2009 with retained shareholder funds of €4.8m. Another company – Adam And Eve Ltd – holds assets of €3.4m and made a profit of €1.7m in 2011. Yet another – GS Securities – holds assets of €2.7m and made a profit of €811,000 in 2011.
Cork Sinn Féin councillor Chris O’Leary told the MoS he was more than familiar with the Murray family’s operations. In particular, he says, they are renowned for knocking on doors in working-class areas when Christmas, a new school term or First Communion was imminent.
‘I’m very much aware that people are increasingly using the services of legal moneylenders recently for school uniforms and getting the children back to school.
‘They will probably go back to them in the coming weeks to get things for Christmas off them… they are in a cycle of perpetuating poverty,’ he said ‘I’ve seen these door callers in working-class areas in vans and people go to look at the goods. They decide to buy something and get caught up in a cycle.’
Labour councillor Michael O’Connell, who is also a volunteer with Gurranabraher Credit Union, said people going to moneylenders had become a huge problem, particularly over the past four or five years.
‘The economy crashed. Things are very tight and people with young families are being lured into a fake sense of security with the initial loan. After the initial loan, you get sucked in. It’s easy to get a further €200.’
While not commenting on Marlboro Trust in particular, Mayfield Workers Party councillor Ted Tynan said he had no time for the industry. ‘They feed off people, particularly in times of recession,’ he said . ‘There are always a number of people living just above the poverty line and they are slipping below that.
‘They might be in trouble with the bank and might have a loan with the credit union and an emergency comes up and they are driven into the hands of the moneylenders .
‘This needs to be tackled. They should not be able to charge such high interest rates. It’s a total rip-off.’
But Money Advice and Budgeting Service (Mabs) spokesman Michael Culloty said cutting interest rates for legal moneylenders would eliminate their business and drive people into the hands of illegal moneylenders .
In reply to questions from the MoS, the company issued this statement: ‘The company is compliant, regulated, and audited annually. The company operates under licence, strict rules and guidance from the Central Bank
‘The company has been in business for over 50 years and employs over 130 people in fulltime pensionable employment.’
ENDS
Marlboro selling trainers and tracksuits ‘interest-free’, but first it jacks the prices way up. The following list shows the difference between Marlboro’s credit retail prices and those available in the high street.
1 A Nike crest women’s hoodie in pink, pictured, in catalogue for €69 and at Lifestyle Sports for €55.
2 Nike children’s sports shoes labelled Court Met in the catalogue cost €59. On sale at Maher’s Sports for €41.
3 A pair of Ecco shoes labelled in the catalogue as E32235 on sale for €180 were available at the Ecco store on Patrick Street, Cork, for €160.
4 Children’s converse all star red runners (Sizes 10 – 2), labelled Chuck Taylor in the and on sale at Lifestyle Sports for €50, having been reduced from €75.
7 Nike children’s sports shoe, pictured, labelled Court LDS in the catalogue cost €93. They were on sale at Maher’s Sports for €68.
8 Women’s Adidas tracksuit in green and purple offered in the catalogue for €90. Same item at Maher’s Sports cost €45, reduced from €68.
9 A pair of Ecco boots labeled E32234 in the catalogue are on sale for €205 and were available at the Ecco store on Patrick Street, Cork for €185.
10 A blue and white Adidas tracksuit on sale in the catalogue for €90 was available at Maher’s Sports for €45, reduced from €68.
11 Nike girl’s warm-up suit, pictured, on offer in the catalogue for €59 but on sale at Maher’s Sports for €42.
12. A black Canterbury base layer for men pictured, on sale in the catalogue for €50 in the catalogue, cost €40 at Lifestyle Sports on Patrick Street.
13 Grey Canterbury women’s tracksuit trousers, on offer in the catalogue for €59, were on sale at Lifestyle Sports at €45.
14 A purple Canterbury women’s hoodie on sale for €70, was available at Lifestyle sports for €50 and at Maher’s for €48.
This story was first published in the Irish Mail on Sunday on 26/08/2012
By: Michael O’Farrell
Investigations Editor
SEÁN Quinn, once Ireland’s richest man, now claims that he is down to his last €300.
The fallen billionaire says the cash is all he has to his name – and that he is able to survive only thanks to the charity of family members.
The claims are made in Quinn’s official declaration of bankruptcy, filed two weeks ago in Dublin.
In it, the man once valued at €4bn says he has an income of just €1,056 per month. He also claims the only other assets to which he can lay claim are a half-share in three cars, 50% of a small forestry plot and two pension funds worth a combined €200,000.
He declares no ownership of any property – or of any valuable jewellery, electronics or antiques.
Overall, Quinn declares that his income falls well short of his €2,880 monthly outgoings – which he does not break down in any way. He says, however, that he receives a monthly top-up from unnamed family members of €1,600 per month.
There is no record of any income from State benefits. Thus, even when the charity from his relatives is included, this would leave him facing a monthly shortfall of €223.
All in all, the business magnate once rated among the world’s wealthiest people now paints a picture of a man living in penury, unable to meet his bills and surviving only on the goodness of his loved ones.
However, the bankruptcy declaration does not reflect the fact that Quinn and his wife, Patricia, still live in a 14,700sq.ft mansion that boasts an indoor golf simulator, a putting green overlooking a 15m swimming pool, a sunken hot tub, a Jacuzzi pool, a cinema and a snooker room.
Quinn continues to enjoy the luxurious property, which contains seven en-suite bedrooms, a luxurious leisure area and an exercise mezzanine overlooking the pool.
The home also boasts its own bar, a grand piano, a library, a lift, a built-in dog house, balconies and a large deck overlooking Lough Aghavoher. Outside, at the end of a covered walkway, is a nine-car garage.
However, Quinn’s sworn statement of affairs, which has just been added to his High Court bankruptcy file, suggests that there are only three cars to which he can lay claim.
He lists a half-share in three vehicles worth a combined €71,000. The fleet consists of a 2004 Cavan-registered Mercedes Benz S600 (€6,000) a Northern-registered Mercedes SCL600 (€60,000) and a Northern-registered Range Rover (€5,000).
The statement of affairs shows that Quinn has spent almost all his remaining cash since he provided Belfast’s High Court with a list of assets in November 2011 when he sought and failed to declare bankruptcy in the UK.
At that time – with control of his businesses already handed over to his children – he had just over €11,000 in three bank accounts.
But, since then, the accounts – in the Bank of Ireland, Cavan town, the Bank of Ireland, Lisnaskea, Co. Fermanagh, and Ulster Bank, Ballyconnell, Co. Cavan – have been emptied.
The statement – signed by Quinn on August 10 – lists a monthly income of just €1056.32, derived from pension payments, income bonds and benefits.
Quinn – who is likely to follow his son to jail next month – has an Irish Life pension fund and a separate fund with Quinn Life Pensions, worth a combined figure of just under €200,000.
It does not appear that he has yet drawn down any of these pensions.
Quinn does not list any property assets other than a 50% share in six parcels of forestry land close to his home. In all, his stake in the land is worth €25,000. During his failed Northern Ireland bankruptcy attempt, Quinn told the court that his home had been built and was owned by his five children.
But land registry records suggest that the property is owned by a fully-owned subsidiary of the Slieve Russell Hotel – a Quinn business that was taken over by the Irish Bank Resolution Corporation, formerly Anglo Irish Bank, in April 2011.
This means that Quinn’s right to live on the premises could, in theory, be contested by the bank, which has held a charge on the property since 2007.
However, Quinn may have to move out soon enough anyway – his daughter, Aoife, recently told the Irish Mail on Sunday that she feared her father was headed for jail alongside her brother, Seán Jr, for contempt of court.
She suggested that it was up to the IBRC to comply with the Quinns’ demands in terms of recovering assets from around the world – an attitude that appears to suggest there will be no escaping a jail term for the family patriarch.
Last month, Quinn’s son, Seán Jr, and his nephew, Peter Darragh Quinn, were sentenced to threemonth jail sentences for contempt.
A warrant was issued for Peter Darragh Quinn when he did not turn up at the High Court in Dublin for the hearing. He was later photographed alongside his father at a GAA match in Fermanagh.
In June, Judge Elizabeth Dunne ruled that the three men misled the courts and had acted in a ‘blatant, dishonest and deceitful’ manner.
She added that the contempt was outrageous and they were evasive and uncooperative in their evidence.
The behaviour of all three was ‘as far removed from the concept of honour and respectability as it is possible to be,’ she added.
This week, after reporting losses for the first half of the year, IBRC chief executive Mike Aynsley rejected claims by the Quinn family that the bank had a vendetta against them.
He said the bank was not being vindictive in pursuing the Quinns in the courts but was doing what was necessary to recover the €2.88bn it is owed.
Sean Quinn’s son-in-law sold off more than €50m worth of Russian property in a frantic two-week blitz last summer, the Irish Mail on Sunday can reveal.
The deals were all carried out as Anglo Irish Bank – now IBRC – was trying to seize Quinn assets to help pay back the family’s debts.
As a result, Irish taxpayers are unlikely to get their hands on the portfolio of Irish property.
Asset transfers: Bankrupt ex-billionaire Sean Quinn leaving the High Court in Dublin
Details of the seven transactions – all signed by Stephen Kelly, husband of Mr Quinn’s daughter Aoife – have never before been published.
But an MoS trawl of Russian company records and other related papers can today reveal the extent of Mr Kelly’s involvement in the Quinn family’s asset transfers.
Mr Kelly, an accountant by profession, is originally from south Dublin and is the son of a Mary and Paul Kelly who operate a school bus run.
Since marrying Aoife Quinn in 2009 he has joined a vast cat and mouse game played across the globe as his in-laws tried to hide as much of their wealth as possible.
Much has been made of the fate of the Quinns’ larger landmark assets such as the Ukrainian shopping centre and the Kutuzoff office block in Russia, especially as those assets were pledged as security to Anglo.
But the Quinns also pursued a strategy of moving unsecured assets out of reach, as Peter Quinn, a nephew of Seán Quinn, admitted in court during proceedings against the family.
In his testimony, Peter Quinn said he believed IBRC would be focused on the ‘big-ticket’ properties and that the lesser, unsecured assets ‘would be the easiest things… to get for the benefit of the Quinn family’.
Today, the MoS can reveal precisely what he meant and detail how seven unsecured Russian properties worth between €1m and €25m each were put out of reach by the Quinns and Stephen Kelly.
Although they were not pledged to the IBRC for any particular loan, the assets could nevertheless have gone towards settling millions owed to the bank.
And they are now covered by court instructions ordering the Quinns to reverse or undo moves made to put assets out of reach.
All of the transactions took place between May 18 and June 2, 2011, and were signed by Stephen Kelly who had been given power of attorney over the Russian companies that owned the properties.
On May 18, 2011, Mr Kelly signed for the sale of a company called Stroicom LLC in the oil-rich republic of Tatarstan 800 miles east of Moscow.
Stroicom LLC was established in 2006 and owns a partially constructed site in the city of Naberezhnye Chelny – the republic’s second largest city.
The Quinn site is estimated to be worth in the region of €1.6m but upon Mr Kelly’s signature it was sold to a new company owned by an Oleg Ogarkov. From there it is unknown what became of the asset’s ownership.
However, as with the other sales signed by Mr Kelly and members of the wider Quinn family, IBRC has concluded that the moves were designed to keep ownership within the Quinn family and away from creditors.
On May 19, 2011, Mr Kelly sold another Quinn company called Business Park LLC which is based in the capital city of the Russian Republic of Bashkortostan.
Business Park LLC owns an operational DIY retail outlet in Ufa which is operated by the Castorma Group, part of the international Kingfisher DIY group which also runs the B&Q stores in Ireland.
The store is worth up to €25m but was sold for just €2,500 to a Russian company which has since assigned the asset elsewhere.
On the same day – May 19, 2011 – Stephen Kelly sold another Quinn firm, Stroitland LLC. This company owns a partially completed retail unit in Nizhny Novgorod, the fifth largest city in Russia.
And just five days later, on May 24, Mr Kelly signed the sale documents for yet another company – this time in the capital city of Russia’s Southern Federal District, Rostov on Don.
The company, called ADK LLC owns a development site which is worth €10.6m and yet again the new owner was a heretofore unknown Russian, Sedih Nikolay.
Two days later another Russian company, StroiTorgCentr LLC, was sold. This time the asset involved a site worth just under €1m in the city of Yekaterinburg.
The company was sold in the same manner as the others, this time to a Vladimir Dedov.
But it emerged during evidence at the recent Quinn contempt trial that the asset was transferred on and is now owned by a company in Belize which was set up for Peter Quinn by a Dubai associate.
A week later, on June 2, Stephen Kelly signed for yet another sale, this time for East Point Logistic in Moscow which owned a 20-hectare greenfield site zoned for a logistics park worth an estimated €6.5m.
And on the same day he also sold another Moscow company called Zao Metropolis LLC which owned a semi-complete retail and hotel project in a Moscow suburb. The buyer was Vladimir Dedov, the new owner of StroiTorgCentr LLC.
All told, the seven deals saw assets worth more than €50m leave the ownership of the Quinn family.
But the IBRC has told the High Court that it will seek to appoint a receiver to the worldwide assets of the five Quinn children and their spouses when the family is back in court on July 20.
At that point, some of the Quinns will also find out whether they will be jailed – a fate that will depend on whether they can show the judge they have, as ordered, made progress in making their assets available to the IBRC.
Last night the family declined to answer specific MoS questions about the Russian deals and whether the family was cooperating with the bank.
Their lawyer said it would be ‘inappropriate’ for the family to address ‘certain questions’ because they ‘are all subject to coercive orders of Ms Justice Dunne and as such they remain obliged to take certain steps to comply with those orders’.
Leading members of the Quinn family dynasty have been caught on secretly filmed video footage discussing what appears to be a multimillion-euro cash deal in Kiev in January – a time when they were the subject of Irish High Court orders forbidding them from disposing of the family’s assets worldwide.
The damning videos also contain a strikingly nonchalant admission from Peter Quinn, a nephew of Seán Quinn Sr, who says he is prepared to mislead a court looking into the Quinns’ affairs. ‘I’d have to lie to the court,’ he says, laughing. ‘That wouldn’t overly concern me.’
The recordings feature Seán Quinn Jnr and his cousin Peter Quinn with Russian-speaking businessmen as they discuss payments to the Quinns ranging from US$100,000 (about €79,000) to US$5m (€3.95m).
Revealed exclusively here for the first time, and made public on the Mail’s website, mailonline.ie, the videos appear to confirm the findings of Judge Elizabeth Dunne, who this week found the Quinns’ conspiracy to shift assets was an ‘elaborate scheme’ that was ‘so blatant, deliberate and extensive’ that jail sentences may be required.
The videos show:
– Peter Quinn saying lying to the court ‘wouldn’t overly worry’ him; l Seán Quinn Jnr demanding $100,000 in cash that day and saying they are ‘unhappy’ they have ‘not had our five million’;
– Peter Quinn requesting a safety deposit box in Kiev because ‘we can’t get $100,000 into Ireland’;
– Peter Quinn telling a Russian-speaking businessman: ‘I’m not going to make your position stronger until I get the money;
– Peter Quinn stating: ‘I am in breach of Irish injunctions, which you are aware of’.
This week Seán Quinn Jnr, Peter Quinn and Seán Quinn Snr were all found guilty of contempt of court for deliberately breaking High Court orders not to transfer assets.
On Friday they were given three weeks to reveal and reverse dozens of transactions or face prison. During these contempt proceedings evidence was heard that both Seán Jnr and Peter Quinn were in Kiev on the date the recordings were secretly made.
Judge Dunne’s 56-page judgement against the Quinns outlines a chronology of vast and complex asset transfers by members of the Quinn family as they sought to put their wealth beyond the reach of the taxpayer-owned Irish Banking Resolution Corporation (IBRC), formerly Anglo Irish Bank.
Sean Quinn Jnr (off camera): ‘We are not happy with $100,000 cash, but we will take it, obviously. Is there somewhere for us to put that today’ Peter Quinn: ‘Can we get a safe deposit box today… We can’t get a hundred thousand into Ireland’
‘To stay out of jail we have to deny we signed the contract. I’m in breach of Irish injunctions, which you are aware of. And I’ve been instructed by court in Northern Ireland, if I want to stay out of jail, come here on Monday and testify’
Among other things the judgement, by Judge Dunne, details how the Quinns made a series of debt assignments resulting in a €60m Ukrainian shopping centre with an annual rent roll of €10m being put beyond the reach of the IBRC and into the control of a British Virgin Islands company called Lyndhurst.
Peter Quinn signed the final transfer to Lyndhurst. But when Anglo discovered this document he denied that the signature was his.
At Anglo’s behest he was asked to go to court in Ukraine to state on affidavit that he had not signed it.
This issue takes up much of the meeting.
Two days later Peter Quinn signed an affidavit to the Ukrainian court saying he had never signed the documents in question.
Set in a Kiev restaurant, the sensational recordings capture a tense meeting between Seán Quinn Jnr, Peter Quinn and two Russian-speaking businessmen who the MoS understands may be representatives of Lyndhurst.
As the person responsible for the Quinn family’s Russian and Eastern European assets before Anglo Irish Bank seized them in April 2011, Peter Quinn plays a central role in the exchange.
Also present and visible is Larissa Puga – a Ukrainian businesswoman who was until recently employed by the Quinns to run their Kiev shopping centre firm.
Inexplicably and controversially she received a €500,000 payment from a Quinn company in recent months. Ms Justice Dunne said documents were fabricated to justify this payment, which has been frozen pending investigation.
‘I came here to discuss, to see, if I could get any comfort from you and I haven’t. My court instructed me that if I don’t come to Kiev, and testify, I’m in breach of the injunction. I would have to lie, that wouldn’t overly worry me’
Sean Quinn Jnr, right, says: ‘We are not happy that we are not getting paid our hundred thousand now since January, we are not happy that we haven’t our five million.’
The first video is a short clip of 16 seconds taken from a table adjacent to where the Quinns are seated in which both Peter Quinn, Seán Quinn Jnr and Larissa Puga are clearly visible.
‘There’s two things, Larissa,’ Seán Quinn is heard saying as he counts them out on his fingers.
‘They were saying they’ll give us $2m dollars cash and if they can’t pay with the company – one hundred thousand, we’ll take.’
At this point the clip, which is a wide shot clearly intended to establish who is at the meeting, ends.
But the context of the tense meeting is further revealed by the second clip of the same meeting.
This 15-minute continuous recording remains focused on Peter Quinn’s face and upper body and was taken from a device placed directly on the table in front of him.
The footage begins with Sean Quinn Jnr discussing and negotiating the $100,000 payment.
‘Is there somewhere, just before we go to… we’re not happy with the $100,000 but we’ll take it. Is there somewhere for us to put it?’ he asks.
‘Is there some bank open where we could put that at the moment. Could we put that in a box? Is there some bank? We are not happy with hundred thousand dollars cash, but we will take it, obviously. Is there somewhere for us to put that today. ’
Peter and Sean Quinn Jnr were filmed by a hidden camera during a meeting in a Kiev restaurant
As he speaks Peter Quinn, dressed in a yellow jumper and white open- neck shirt, nervously flicks the screen of his phone and says: ‘Can we get a safe deposit box today?’
At one point he becomes suspicious when he appears to spot someone bearing a camera elsewhere in the restaurant.
‘Is he taking photographs?’ asks Seán Quinn Jnr.
‘Camera! I can see a f****** camera. It flashed earlier on,’ says Peter Quinn before he relaxes again and lets the issue pass.
To his left, Seán Quinn Jnr’s arm and head can occasionally be seen and his voice clearly heard as he leans over to talk to his cousin about how to deal with the payment.
When it is suggested that the money simply be declared and brought to Ireland, Peter Quinn is incredulous. ‘Of course,’ he scoffs.
‘And all the major reporters expecting us when we land there with a hundred thousand.’
Then Peter Quinn speaks of going to Amsterdam with the cash.
‘We’re going through Amsterdam, so we have to go to Amsterdam… and there we… we can’t get 100,000 into Ireland.’
Translating for the meeting participants, Ms Puga asks whether ‘it can be put on your cards’ and then asks the Russian-speaking men, ‘What about Innishmore? What happened with it?’
Innishmore is the Peter Quinn-controlled firm which assigned the Kiev shopping centre debt to Lyndhurst. It is one of the Quinn entities subject to injunctions forbidding any trade of the Quinn assets.
‘No. Injunction in Northern Ireland where Innishmore is based,’ says Peter Quinn tetchily. ‘So it’s not a very sensible request. It’s impossible.’
During some further conversation about whether any banks are open Ms Puga is heard in the background speaking to the bank apparently organising the Quinns’ needs.
Then the conversation becomes tenser as it begins to turn to the question of why Peter Quinn told the courts in Ireland that his signature on the Lyndhurst assignment was forged.
The fact that the Quinns had a meeting with the Lyndhurst executives in Kiev in mid-January was confirmed in this week’s contempt judgement because Seán Quinn Jnr had briefly referred to the meeting in his evidence before Judge Dunne.
From Ireland’s richest man to a bankrupt with debts of £1.7bn and now caught on camera. Sean Quinn Snr with his wife
Judge Dunne – and indeed the IBRC – both believe that Lyndhurst is secretly owned by the Quinns – a belief that has been widespread given the manner in which other assets appear to have been moved by the Quinns.
But when contacted by the MoS last night the company’s London solicitor, John Tasselli, denied that the company had anything to do with the Quinns.
‘Lyndhurst remains adamant that it is not and never has been a vehicle controlled by the Quinns,’ he said. ‘It is a completely independent company with entirely separate ownership and control whose only connection with the Quinns was the misfortune to enter into this transaction.’
Mr Tasselli declined to indicate who the owners were but the Kiev recordings obtained by the MoS indicate that the owners of Lyndhurst are businessmen who did a deal with the Quinns to take control of the shopping centre.
In his evidence to Ms Justice Dunne Seán Quinn Jnr had told the court that the last time he met Ms Puga was in such a meeting in the Ukraine on that date.
He said the meeting had been a fraught one, relating as it did to the allegation that Peter Quinn’s signature had been forged on documents assigning the shopping centre debt to Lyndhurst.
Just how fraught that meeting was can now be revealed thanks to the recordings. ‘I’m not going to make your position stronger until I get the money,’ Peter Quinn is seen saying, apparently discussing a deal involving a dispute over his signature.
‘We don’t have to stay together,’ he continues after some more Russian is heard. ‘The only reason we would stay together is if we get our money. If we don’t get our money we won’t stay together,’ he tells the executives.
When he hears this, one of the other men at the table speaks to his colleague in Russian, ‘So this is why he is denying his signature is on the agreement. How are we supposed to get our money if he is denying it? Is he talking about that?’
Because it is believed to be owned by the Quinns and has been involved in assignments apparently in breach of injunctions, Lyndhurst’s secret owners appear to have been having their own difficulties securing funds from the shopping centre asset. In addition they too have been the subject of court orders which they are fighting in different jurisdictions.
Sean Quinn Jnr also attended the meeting in a Kiev restaurant
They then decide they should show Peter Quinn a document. As they slide it towards him, they ask; ‘Do you know about this?’
‘That’s my lawyer’s…’ begins Peter Quinn as he scans the document.
‘They write that he is denying the agreement,’ one of the Russian-speaking businessmen tells the other. This would have followed Mr Quinn telling this to his legal advisors. ‘What are we supposed to do about it?’ he asks.
Sitting beside his cousin, Seán Quinn Jnr realises what’s happening. ‘What they’re saying is you’re reneging,’ he explains.
From this point Peter Quinn appears to adopt a strategy of blaming others saying he has no choice but to continue testifying – even in a Kiev hearing scheduled for the following Monday – that the Lyndhurst assignment signature is a forgery.
‘I have been instructed by court in Northern Ireland to come here and testify,’ he explains.
‘To stay out of jail, we have to deny we signed the contract. I’m in breach of Irish injunction which you are aware of. ‘And I have been instructed by court in Northern Ireland, if I want to stay out of jail, come here on Monday and testify.’
‘I have orders from the court, from the judge to come here on Monday and testify that I didn’t sign those papers.’
The MoS has established that on the Monday following the restaurant meeting – January 23 – a hearing in the Lyndhurst/IBRC dispute was scheduled to take place in Kiev.
In the end, the hearing was adjourned to another date but the MoS has confirmed that on January 23, Peter Quinn did sign an affidavit for the Ukrainian courts in which he denied the signature on the Lyndhurst assignment was his.
On the tape, unsure of what she is hearing Ms Puga asks, ‘What’s “the jail”?’
‘Prison, prison,’ explains Peter Quinn.
Then the conversation turns to the issue of whether Peter Quinn is prepared to lie to a court. ‘What are you going to do?’ the translator asks.
‘I came here to discuss, to see, if I can get any comfort from you and I haven’t,’ responds Peter Quinn. Suddenly one of the Russian-speaking men intervenes, speaking in broken English for the first time.
‘Your court say you will lie?’ he asks
‘My court instructed me that if I don’t come… to Kiev, and testify, I am in breach of the injunction,’ Peter Quinn explains.
Business empire: The Quinn Group in Blanchardstown where Sean Quinn made his multi-million fortune before his downfall
‘I understand but you will lie,’ the Lyndhurst executive asks again. ‘I don’t understand it. You have signed the paper.’
At this Peter Quinn laughs, sits back and shrugs. ‘I’d have to lie,’ he says. ‘That wouldn’t overly worry me.’
After speaking to the Lyndhurst executives Ms Puga asks: ‘So your court gave you instructions to come here and lie in Ukrainian court?’
‘Not lie… but to say he did not sign,’ interjects Seán Quinn Jnr.
Peter Quinn then comes back in: ‘I have two options they have given me. One, I can go to jail. Or two, come over here… Seán Quinn Jnr interjects to finish the sentence ‘…come over here and say he didn’t sign no agreement’.
After more Russian is heard the translator asks what Peter Quinn intends to do.
‘I don’t know,’ he responds.
Seán Quinn Jnr then suggests to Peter Quinn that the pair leave the table for a ‘wee chat’ alone.
‘We are unhappy about $100,000,’ Seán Quinn Jnr says as he goes to get up.
‘Not happy or happy?’ asks the translator.
‘Unhappy,’ he answers. ‘Not happy. We are not happy that we are not getting paid our $100,000 now since January, we are not happy that we haven’t our five million, we are not happy that Peter has to come over here on Monday, or stay over here till Monday, and swear here in court… ‘Youse need to think and discuss what youse can do to resolve our issues.’
With that, the Quinns leave the table and the recording device is switched off.
This week the MoS asked the Quinns about the recordings through their lawyers but received no response.
The questions centred on why the Quinns had been meeting these men and Larissa Puga, apparently to discuss transfers and payments of assets, while they were injuncted from doing so.
We also asked whether the Quinns had taken the $100,000 or any other sum and put it in a safety deposit box as discussed and whether it had been declared to any tax or regulatory authorities.
Additionally we asked the Quinns whether they owned any beneficial interest in Lyndhurst and whether they had sold their interest in the Kiev shopping centre for cash as the recording appears to indicate.
Furthermore we asked how the Quinns could be in a position to assist the IBRC recover the shopping centre asset if ordered to do so by the courts here.
And finally we asked Peter Quinn whether he lied about his signature in his Irish affidavits and if so to explain why.
On Friday after the Quinns escaped jail the MoS caught up with Peter Quinn.
‘We have a videotape of a meeting in Kiev in January 2012, with Larissa Puga, in which you said you were prepared to lie to the Irish courts?’ we asked.
‘The Ukrainian courts,’ he replied.
Pressed further, he said: ‘I want to get out of there safe. I can’t comment.’
Seeking to clarify the issue, we asked: ‘Just the Ukrainian courts? Not the Irish courts?’
Mr Quinn nodded his head but declined to comment further.
he MoS has confirmed that two days after the meeting in Kiev on January 21 Peter Quinn signed his name to a notarised affidavit swearing his signature on the Lyndhurst assignment was forged. The affidavit was sent to Kiev as part of the case there.
That sworn affidavit, dated January 23, and other testimony about the veracity of Peter Quinn’s signature has been utterly rejected by Ms Justice Dunne.
In her judgement this week Judge Dunne said she did not believe Peter Quinn’s evidence about his signature being forged.
‘I have come to the firm view that I cannot accept the evidence of Peter Quinn as to the alleged forgery of his signatures on various documents,’ she continued before adding that she was ‘satisfied beyond reasonable doubt that he was a signatory to those documents and thus in breach of the orders of this court’.
The recordings revealed today now appear to show beyond all doubt that if Peter Quinn did not lie about the signature he was more than prepared to for the sake of his family’s crumbling empire.
FBI and translation experts… How we verified Kiev footage
The Irish Mail on Sunday obtained two short videos purporting to be of Seán Quinn Jr and Peter Quinn at a meeting in Kiev from a confidential source almost one month ago.
In order to verify the recordings, a series of checks and corroborations were undertaken. We sought and commissioned the very best forensic video analysis and certified translation services available to authenticate the video footage.
The video material was sent in its original unedited form to Grant Fredericks – an instructor of Forensic Video Analysis and Digital Multimedia Evidence Processing at the FBI’s National Academy in Quantico.
A grab from one of the two short videos received by the Irish Mail on Sunday
Mr Fredericks is a renowned and certified expert with extensive experience in the recovery, scientific examination and evaluation of recorded video and audio information involving criminal and civil investigations in the US, Canada and the UK.
According to Mr Fredericks’s report, the two videos obtained are of the same meeting, were recorded at the same time and have not been edited or manipulated in any way.
‘After carefully examining the video and audio content, and the related metadata of both video clips, I have formed the opinion that they are original recordings that accurately represent what they purport to show,’ his report states. ‘In addition, after carefully comparing and contrasting the environment, the décor, the clothing, the table and the features of the individuals depicted in both video sequences, I have formed the opinion that the recordings accurately represent the same event.’
According to the metadata in the files, one is filmed on a SPY DVR Micro Hidden HD Camera Pen Cam and the other was filmed on an Apple iPhone 4S, using Software Version 5.01.
The MoS also obtained a certified translation of the Russian elements of the conversation and a second proof read from Word Perfect Translations in Dublin – the same firm gardaí and the Courts Service use for their legal translation needs.
FULL TRANSCRIPT OF THE CONVERSATION BETWEEN PETER QUINN AND SEAN QUINN:
The meeting took place on 21 January 2012 at the Fellini restaurant in Kiev.
Time 18:02:00 UTC+2
18:02:13 Everybody talking together
18:02:26 L- But not for all this amount
18:02:38 P- But why not pay fifty thousand… L- Very big scandal here, no one will register new forms but the national Bank…it’s controlled here.
18:02:48 V- Скажите ему, что их юристы очень возмущены почему мы напрямую с судом общаемся. (Tell him that their lawyers are very upset about us talking to their court directly.) Jl- Его юристы? (His lawyers?) V- Нет – вражеские…- (No, the enemy’s)
18:03:27 V — У них так не принято, но я так делаю. (It is common practice for them, but I do it)
18:03:30 L – He wants to explain that it’s not normal in Ireland, but he has direct connection with court. V gives P a laptop computer to look at.
18:03:50 V – Все против нас, мы не можем действовать как они. (Everything is against us, but we cannot act like them.) Z – He does not know what is going on in Ireland, but he has read some reports.
18:04:10 V- Да все они прекрасно понимают. (They understand everything perfectly.)
18:04:14 Z – Не надо психовать, мы вместе вылезем из этого всего. У банка масса нарушений. (Don’t panic, we will get out of this together. The bank has carried out many violations.)
18:04:29 V – It’s only one letter, but… so now you believe?
18:04:31 P – Show me the rest, show me rest of them.. .there is only one
18:04:37 V – Если я расскажу обо всем остальном, я проиграю в суде (If I tell him about all the rest, it’s likely that I will lose in court)
18:04:41 L – He don’t want to show because he afraid that the information will be outside…
18:04:49 V – Мы сейчас держимся потому что мы умнее противника… (We are surviving now because we are cleverer than our competitor)
18:04:54 SQ- Is there somewhere, just before we go to…we’re not happy with the one hundred thousand dollars but we’ll take it. Is there somewhere for us to put it? Is there some bank open where we could put that at the moment. Could we put that in a box? Is there some bank?We are not happy with hundred thousand dollars cash, but we will take it obviously. Is there somewhere for us to put that today? P – Can we get a safety deposit box today?
18:05:25 L – Они хотят снять банковскую ячейку… (They want to get a safe deposit box…)
18:05:31 Z- Да пускай снимают, в чем проблема? Или с собой вывозят, задекларировали и поехали, в чем проблема? (Yes they can get a box, why not, what is the problem? Or they can take it with them, declare and go, what is the problem?)
18:05:41 L – You can declare it…
18:05:45 P- Declare it?
18:05: 48 Z- Сто долларов с каждого на таможне за декларацию… (Hundred dollars each person at customs for the declaration…)
18:05:53 P – Of course, and all the major reporters expecting us when we land there with a hundred thousand…
18:05:59 Z – Пусть во вторник приезжает… (He could arrive on Tuesday…)
18:06:28 P – We’re going through Amsterdam, so we have to go to Amsterdam… and there we… We can’t get 100,000 into Ireland. L – But you can in Amsterdam go from airport…to box in Aamsterdam… P – It’s Saturday night by the time we get down to Amsterdam.
18-07- 08 P – When we get to the hotel maybe we can put it in the safe…
18:07:10 L- Is it possible to put it on your cards?
18:07:20 P- On our cards…? Conversation in Russian in the background about different options how to pay them hundred thousand…
18:08:03 V – А Инншмор они закрьши уже или нет? (And have they closed Innishmore already or not?) P – I saw that yeah he sent one email..
18:08:12 L- What about Innishmore…? What happened with it?
18:08:20 V- Closed?
18:08:22 P – No, injunction in Northern Ireland where Innishmore is based, so it’s not a very sensible request, it’s impossible…
18:08:35 V – Точно также и мы не можем перевести, вот чтоб он понимал… (For the same reason we also cannot make a transfer, so he should understand that…)
18:08:40 Z- Мы же предлагали на Инишмор перевести. В чем проблема? Давайте переведем на Инншмор… (We did suggest making a transfer to Innishmore. What’s the problem? Let’s transfer it to Inishmore…)
18:08:51 P- Is there any banks open on a Saturday, before we move off. Is there any banks open on a Saturday…? Can you check if banks are open on Saturday? S – Well there is probably one open til one or two o’clock. Some pause in the conversation
18:09:25 L – Ну так вы разговаривайте дальше… (You carry on the conversation…)
18:09:28 V- Так что? Надо же протоколы подписать… (So what then? We need to sign the protocols….)
18:09: 35 P- They’re all puppets (To SQ)
18:09:37 V- Ну да, он же уже подписывал… (Оh yeah, he has already signed them…) L voice in the background talking on the phone to the bank
18:09:53 P – Any other bank, yeah
18:10:32 P -1 am not gonna make your position stronger… until I get the money.
18:10:37 L – Он не может сделать нашу позицию сильнее… (Не cannot make our position stronger…)
18:10:45 Z- Так мы же вместе идем и делаем все для этого. Мы здесь – он там. Мы должны друг другу помогать. Все вопросы которые у них здесь были мы решили, вернули все в реестр. Ну как это так? Мы выполнили все что обещали. (So we will work together and do everything possible. We¬ are here, he is there. We should help each other. We have sorted out all the issues they had, registered everything. What is it then? We have done everything we promised.)
18:11:21 P- We don’t have to stay together…
18:11:23 V- Он что , не догадывается что мы знаем что он отказывается? Нужно говорть, что мы знаем? (Doesn’t he suspect that we know that he is refusing? Should we tell him that we know?)
18:11:28 L – Конечно надо… (Of course we should…)
18:11:30 P- The only reason we would stay together is if we get our money. If we don’t get our money, we won’t stay together.
18:11:37 V – И поэтому он отказывается что он договор подписал? Как мы деньги получим если он от договора отказывается? Он говорит об этом? (So is this why he is denying he signed the agreement? How are we supposed to get our money if he is denying the agreement? Is he talking about that?)
18:12:00 P – We don’t have to stay together…
18:12:20 L – Я думаю это надо показать, потому что это уже в суде… (I think we should show it to him, because iťs already in the court…) S – Is he taking photographs? P – Camera. I can see fucking camera. It flashd earlier on…it’s ok. OK.
18:12:25 P- Where is the boss? Where is the boss? Who do you work for?
18:12:36 L-Me?
18:12:40 L – Спрашивает, кто главный, ты или я? (Не is asking who is the boss, you or me?)
18:12:47 Z – Мы все вместе командой работаем. (We are all working as a team.)
18:12:54 V- Do you know about this? V shows P a file
18:12:58 P- Thaťs my lawyers…
18:13:00 V – Они пишут, что он отказывается от договора. Что нам с этим делать? (They write that he is denying the agreement. What are we supposed to do about it?)
18:13:10 Р- I have an order from the court, from the judge, to come here on Monday and testify that I didn’t sign those papers S – What they’re saying is you’re reneging.
18:13:20 80- I have been instructed by court in Northern Ireland to come here on Monday and testify, so I have.
18:13:28 V – Так он сам говорит, что его инжанкшен на Украине не действует… (As he says himself, his injunction is not valid in Ukraine…)
18:13:30 L- Он говорит, что у него есть постановление суда приехать сюда на Украину и подтвердить что он не подписывал… (He is saying that he has a court order to come here to Ukraine and deny that he signed…)
18:13:37 V- Так он подписывал, как он может? (But if he signed, how can he…?)
18:13:40 S- To stay out of jail we have to deny we signed the contract. P – I’m in breach of Irish injunctions which you are aware of’
18:13:50 V- Так если он подписывал, как он может?… (But if he signed, how can he…?)
18:13:53 Р- And I’ve been instructed by court in Northern Ireland, if I want to stay out of jail, to come here on Monday and testify.
18:13:58 L- What’s the jail?
18:13:59 P – – Prison…, prison!
18:14:01 L – А, если Питер не хочет попасть в тюрьму, он должен в понедельник сюда приехать и сказаться от этой подписи. (If Peter does not want to go to jail, he must come here on Monday and deny his signature.)
18:14:07 V – Но это же будет обман! (But that would be fraud!)
18:14:09 L – And what are you going to dо?
18:14:12 P – I came here to discuss to see if I could get any comfort from you but I haven’t.
18:14:17 V – Your court say you will lie?
18:14:20 P – My Court instructed me that if I don’t come here and testify, come to Kiev, I am in breach of the injunction.
18:14:25 V – I understand, but you will lie…you have signed the paper. I don’t understand it.
18:14:37 L – Его вызвали в понедельник в суд, и у него инструкции что он не подписывал… У него распоряжение суда есть…(He was called to court on Monday, and he has instructions that he did not sign… He has court instructions…)
18:14:44 P – Ha Ha.. I’d have to lie….that wouldn’t overly worry me.
18:14:47 V – Обманывать наш суд или как? (Deceive our court or what?)
18:14:50 L – So your court gave you instructions to come here and lie in Ukrainian court
18:14:58 P/SQ (talking together) – No, not lie…, not lie…but to say I did not sign.
18:15:00 P- Say, I have two options they have given me: one – I can go to jail or two… S – … come over here and go to court, come over here and say he didn’t sign no agreement.
18:15:10 L- В тюрьму, либо отказаться от подписи в договоре… (Go to jail, or deny his signature on the agreement…)
18:15:17 V- Ho так он же его подписывал. Как он может отказаться? (But he did sign it. How can he deny it…?)
18:15:21 L- What you will do? What are you going to do?
18:15:22 P-I don’t know.
18:15:33 SQ – Have a wee chat, we’ll have a wee chat for a minute? We’ll go for a minute and have a wee chat, ok?
18:15:45 SQ – We are unhappy with the hundred thousand…
18:15:48 L – Not happy or happy?
18:15:53 SQ- Unhappy. Not happy. We are not happy that we are not getting paid our hundred thousand now since January, we are not happy that we haven’t our five million, we are not happy that Peter has to come over here on Monday, or stay over here till Monday and swear here in court.. .and (unintelligible) S – Youse need to think and discuss what youse can do need to do to resolve our issues. L-You going back or not? P – Yes we are going back.
Transcript terminates.
No further audio material was provided after 18:16:00
*******
POSTSCRIPT
The Panama Papers expose of April 2016 threw further light on the way the Quinn’s €60m Ukrainia shopping centre was put beyond the reach of the IBRC and into the control of a British Virgin Islands company called Lyndhurst.
Leaked files from secretive Panamanian firm, Mossad Fonseca, confirm that Aleksandr Orlov was – as we reported – the beneficial owner of Lyndhurst from the beginning of its involvement in the Quinn’s Ukrania shopping mall.
The leaked papers also show that Mossad Fonseca was concerned about the possibility of being dragged into the legal dispute between IBRC and the Quinns as both sides battled over control of former Quinn assets.
The Irish Times – a member of the International Consortium of Investigative Journalists which oversaw the Panama Papers leak – reported the Mossad Fonseca link on April 6, 2016. Those reports – by Colm Keena – can be viewed at the following links;
It has resulted in 200,000 tax-free bicycle purchases since it was introduced in early 2009 and even featured in a Leaving Certificate economics exam question this week.
But an exclusive Mail on Sunday investigation into the cycle to work scheme reveals that it is beset by a thriving black economy that could have already cost the taxpayer tens of millions.
The scheme – which has easily generated in excess of €100m in bicycle sales to date – allows employers to buy bicycles worth up to €1,000 for employees who then repay the cost tax-free through salary deductions.
As intended: 200,000 bicycles have been bought tax free on the scheme…
Loophole: …but the scheme has been abused by dishonest citizens seeking tax breaks on lawnmower purchases
In effect, employees get the bike for half price and the benefits for society include lower emissions, a healthier workforce and less traffic congestion.
But – as the MoS discovered this week – there are loopholes in the scheme, with many dishonest citizens availing of the tax break to buy everything from lawnmowers to trampolines and bouncy castles.
One dealer in the midlands who asked to remain anonymous told the MoS he frequently received queries from people looking to abuse the scheme.
‘I know of other shops who have sold people lawnmowers, trampolines and even a bouncy castle,’ he said.
All that’s required to pull off such a scam is for a shop owner to provide a bogus receipt for a bicycle and related safety equipment while selling something else – such as a mower or bouncy castle.
The MoS set out to discover how easy it would be to abuse the cycle to work scheme and establish just how much the taxpayer could be losing from such fraud.
Our inquiries indicate that as many as three-in-10 dealers – or 33% – may be abusing the scheme.
With 200,000 bicycles – worth at least €100m – registered there could be tens of millions going astray from the taxpayer.
Picking at random from a list of nationwide cycle shops provided on a cycle scheme website we called 10 businesses throughout the country.
Our first call to a prominent cycle and lawnmower provider in Co. Meath provoked an angry response when I asked if a lawnmower could be put down on the scheme.
Purchase: Our reporter Michael O’Farrell buys a lawnmower on the cycle to work scheme from Donegan Garden and Leisure in Bailieborough, Co. Cavan
Suited and booted: The mower rather than the Mercola bicycle indicated on the invoice is loaded into Michael’s car
Mission accomplished: Michael is packed and ready to leave with his lawnmower
‘That scheme is the best thing that’s happened to this business. Anyone would be crazy to abuse it,’ said the owner, who added he was aware that others were abusing the scheme.
In all, six other dealers refused – although some asked whether I was local and, without saying it, gave the impression that a deal could be done face to face but not on the phone.
‘It’s really for bicycles,’ said one Galway shop owner who seemed willing to do business face to face.
‘Do you want to come into the shop? You’d be as well to come in,’ he said.
I was more successful when I called Donegan’s garden and bicycle shop in Bailieborough, Co. Cavan.
‘The fella who does that, he’s not in today,’ said the lady on the phone.
‘But could he put a mower down as a bike?’ I asked.
‘Yeah, I think he will,’ she said. ‘You’re not supposed to but he might be able to do something for you.’
She told me to call back the following day to speak to Seán.
Then I called Southside Mowers & Cycles on Trees Road in Dublin’s Mount Merrion.
Cashback: Michael bought a lawnmower, but the receipt he was given indicates that a bicycle was purchased
Answering the phone, a man named Tony said I’d have to ‘talk to the lads in Booterstown’ and gave me a number. ‘Ask for Stephen,’ he said.
The number provided was for Ferris Wheels, a bicycle shop in Dublin’s Blackrock run by Stephen Ferris. When I called, Mr Ferris agreed to facilitate my request.
‘That’s no big problem at all. You just put it down as a bike,’ he said.
‘Do you work for a company? Are you self-employed?’ he asked.
‘I work for a company but I have also have my own registered business,’ I said. ‘All you need from us is an invoice from Ferris Wheels.
‘I can leave it or bring it up to them in the shop in Trees Road. There’s a load of mowers up there. You can’t pay for it yourself. It has to go through your business or your employer’s business,’ he said.
‘So, I could use my own registered business name and pay it and then just get the invoice?’ I asked.
‘You could of course,’ replied Mr Ferris. ‘There’d be no problem. I’ll leave an invoice for the boys up in Trees Road tomorrow. There’s a different book but I have one in the van. I’ll pop up to Tony’s and I’ll drop that in for you tomorrow.’
‘Tony is the chap I spoke to in Southside Cycles?’ I asked.
‘Well, we’re the same business,’ he said. ‘One shop does bikes and the other shop does lawnmowers. Go up to Trees Road. You can pick a lawnmower and they’ll have the VAT receipt book there.
‘They’ll give you a receipt from Southside lawnmowers – sorry, Ferris Wheels – and we put it down as a bicycle.’
Something changed, though, and when I called to Southside Mowers & Cycles the next day, Tony refused to cooperate, saying he had never sold a mower in the way Mr Ferris had suggested and that he never would.
So, having failed to buy a mower in Dublin, I tried Donegan’s in Bailieborough, Co. Cavan, again. Seán was immediately responsive, saying I could put a mower down on the cycle to work scheme.
Two hours later when I arrived at his shop we agreed on a €550 lawnmower that he had knocked down to €500. ‘Can we throw in a helmet for my bike?’ I asked.
‘We better put something on the cycle to work scheme,’ he joked.
Seán wrote out a VAT receipt for €500 in the name of a false company I provided and, underneath, wrote ‘cycle to work scheme’. The receipt itself was for a ‘gent’s Mercola hybrid bicycle size 56cm’.
‘A good bike is it?’ I asked reading the receipt aloud.
‘You’d love it,’ he laughed. As he helped me bring the mower out to my car he brougt up the cycle to work scheme. ‘It’s a great scheme,’ he said.
‘About 90% of the bikes we sell are on it.’
‘And what about the mowers?’ I asked.
‘The mowers – 10%,’ he said.
When subsequently contacted by the MoS, Seán said he had just taken over the business from his father and had never abused the scheme before.
‘I completely f***** up. Things are tight and I made a big mistake. I have never done it before,’ he said.
After the MoS revealed our investigation to Seán Donegan in Cavan, his father, Dermot, called to say he was the owner of the business and that his son had no authority to agree a deal involving the abuse of the cycle to work scheme.
‘I am the owner of the shop, not Seán,’ he said.
‘If he did a deal he had absolutely no authority to do that. He made a mistake. Hands up. We are trying to run a small business here and Seán is anxious to sell.’
When contacted by the MoS, Stephen Ferris in Ferris Wheels, said there had been confusion and that he had never abused the scheme: ‘Genuinely, we’ve never actually done a bike for a lawnmower, ever. But we just got confused and thought you were buying a bike but they’re two different businesses so there was confusion. We wouldn’t do it. It’s not right.’
When informed of our investigation, Tony at Southside Mowers & Cycles, who had refused to sell us a lawnmower, said he was aware of the scheme being abused.
‘We have heard of the abuses and we probably should have handled ourselves a bit more direct with yourself but you were a potential customer. We weren’t just going to swipe you off,’ he said.
Cycle industry sources told the MoS that Revenue audits have recently taken place in bicycle stores in Dublin, Longford and Westmeath.
Other sources were surprised that the MoS had found businesses willing to abuse the scheme since it was known that a Revenue crackdown appeared to be in progress.
‘That shows how much the scheme was – and still is – being abused. My business has suffered because I won’t do that but many others will,’ said one industry source.
A Revenue spokeswoman declined to confirm that bike shops were being targeted specifically but said: ‘The purchase of bicycles by employers is subject to the normal Revenue audit procedure.’
GREENS’ BICYCLE INITATIVE – FOR WORK TRIPS… NOT LAWNMOWERS
The cycle to work scheme was introduced in the Budget by the Green Party in 2008 and came into effect on January 1, 2009.
Under the scheme, a bicycle is purchased directly by the employer and claimed as a tax-exempt benefit-in-kind.
It can also be financed via a year-long salary sacrifice agreement, with the employee saving on income tax, levies and PRSI.
The bike scheme finances bicycles and accessories – such as helmets, mirrors, locks and chains – up to a value of €1,000.
Participating employers do not have to notify Revenue of their involvement – but must have a signed salary sacrifice agreement from employees, stating that the bicycle is for their own use and will be used for travelling to and from work.
A Revenue spokeswoman said the purchase of bicycles is subject to ‘normal Revenue audit procedures’.
She added that the onus is on ‘employers to maintain records (delivery dockets, invoices, payments details, etc)’.
‘The Revenue Code of Practice provides that the type of offences that are most likely to be prosecuted include use of forged or falsified documents and facilitating fraudulent evasion of tax.
‘Every case will be reviewed on its merits.’
Green scheme: Former minister Eamon Ryan takes a ride in Dublin in 2009
This article was first published in the Irish Mail on Sunday newspaper on 17/06/2012
By Michael O’Farrell
Investigations Editor
Mick Wallace faces fresh questions over the way he transferred a villa and vineyard to his brother
Tax-dodging Deputy Mick Wallace is facing fresh questions over the way he transferred a €500,000 Italian villa and vineyard to his brother – at the same time he was refusing to pay €1.4m to the Revenue.
The 2009 transfer was done in such a way that Mr Wallace is still able to use the property as his own, visiting whenever he wants, despite claiming to be effectively broke.
Mr Wallace says he gave the vineyard to his brother to settle a €550,000 debt for building supplies.
But the fact that he did so at the very time he admits defrauding the Revenue will raise questions as to whether the transfer was an attempt to ensure the taxman (or other creditors) could not get their hands on it and sell it to pay off some of his company’s huge debts.
This weekend, Mr Wallace’s brother, Joseph, who is now the owner of the Italian winery, declined to answer questions about the deal.
Among the questions facing the Wallace family are:
Why would Mick Wallace use a personal asset to pay a business debt? (Mr Wallace has insisted that he and his building firm are separate entities)
If money was owed to Joseph Wallace’s company, why did he take personal ownership of the vineyard? Should the vineyard have been handed over to the firm rather than Joseph?
What documents are there showing how the €550,000 debt was accrued?
Has the Revenue ever been in contact over the deal?
Deputy Wallace could not be contacted this weekend to answer questions about the deal.
He was last seen at Terminal 2 of Dublin Airport on Friday, drinking a pint in the departure lounge bar.
It is thought he may be on his way to watch Ireland’s final Euro 2012 match against Italy – a country with which he has longstanding ties.
Despite his company’s €2.1m debt to the Revenue, which he has said he will start paying from his salary at a rate of around €2,000 a month, Mr Wallace still owns an apartment in Turin, a short distance from the vineyard.
The MoS questioned Mr Wallace about the vineyard transfer in 2009 – before it was known that he had lied to the Revenue, withholding €1.4m in VAT.
At the time, Mr Wallace said he had sold the Italian villa and surrounding vineyard to Joseph after other creditors turned down a chance to bid for it. And he claimed the Revenue had approved the move.
‘I no longer own it [the vineyard]. I had to sell it to a creditor, who happens to be my brother,’ he said at the time.
‘I owed him €550,000 and I sold him the vineyard. It’s not something I wanted to do but he was going to get nothing for the €550,000 worth of material that I had got from him for construction work.’
The Italian villa at the centre of the controversy
Mr Wallace had bought the four-acre vineyard and lovingly restored stone villa, which is close to the pretty Piedmont village of Cortemilia, in 2003 for around €70,000 before spending the same amount again on renovations.
It is unclear how his €550,000 debt to his brother’s firm was entirely settled with the private transfer of a property seemingly worth a fraction of that.
The deal raises further questions, since Mr Wallace has acknowledged that he still uses the villa and travels there in his spare time.
A Wallace construction jeep with an Irish registration and the Wallace logo, ‘Life’s short, work hard, play hard’, is often parked outside the villa. Last year, the Wexford TD happily tweeted about going to his vineyard to tend the vines.
‘I still go down there. But I don’t enjoy the fact that I had to sell it and I did offer it to other creditors who didn’t want it. They were holding out for the hope that they’d get money and hopefully they will,’ Mr Wallace told the MoS at the time.
But now that Mr Wallace has acknowledged that he lied and deliberately committed tax fraud during 2008 and 2009, further questions are likely to be asked about the vineyard deal.
Mr Wallace has acknowledged that he lied and deliberately committed tax fraud during 2008 and 2009
A substantial owner of the nationwide Homevalue hardware brand name, Joseph Wallace also runs a petrol station, SuperValu supermarket, a department store and an agricultural supply store in the family’s home town of Wellingtonbridge, Co. Wexford.
Until 2004, he was also a director of Mick Wallace’s main construction company, MJ Wallace Ltd, which was taken into receivership by ACC last year.
But the €550,000 debt and the associated Italian property deal does not appear to be specifically mentioned in any of the company accounts.
The accounts for Joseph Wallace’s hardware holding company, Associated Hardware PLC, do mention that €1.2m in bad debts were incurred in 2009 – but it is unclear if any portion of this relates to the vineyard deal.
In particular, it’s unclear how a company debt could be settled with a personal asset transfer – something that would be in apparent conflict with company law.
Revenue guidelines state that a company must keep records of all transactions in relation to written off bad debts.
The questions posed by the MoS – and delivered to Joseph Wallace in Wellingtonbridge – were not answered.
‘I have to be careful what I say,’ he said before asking for the written questions to be left for his attention at his SuperValu store.
The MoS also requested documentary evidence of the €550,000 debt. In the past, Mick Wallace has said the Revenue audit into his affairs had found no issue with the vineyard transfer – but this and other questions about his Revenue affairs will become clearer if he agrees to a request to make his Revenue affairs public.
The request was made this week by the Dáil Committee on Members’ Interests, which wants to see if Mr Wallace’s tax issues coincide with his time as a TD, before deciding if it can investigate.
Mick Wallace is facing fresh questions over his tax dodging
But, in the meantime, Mr Wallace is being urged to answer questions he did not directly address during his 10-minute Dáil speech on Thursday.
Those questions include why he and his son, Sasha, doubled their company salaries to almost €300,000 in 2008, around the time the VAT fraud was being committed and when the firm was losing money.
Mr Wallace has also not yet made it clear whether he made his VAT admission to the Revenue only after he was informed of an impending audit in 2010.
And it still remains unclear what assets – in addition to his Dáil salary – he may still own and could sell to help repay his Revenue debt.
For example, the MoS has previously revealed that Mr Wallace bought a Turin apartment in 2001 for an estimated €90,000.
The apartment is a few minutes from the Mole Antonella, the tallest brick structure in the world, and the Porta Palazzo open-air market.
The home is Mr Wallace’s base for indulging in his passion for Italian football, which until financial woes hit, saw him retain season tickets for AC Milan, Juventus and Torino.
FAMILY AND FRIENDS BOUGHT APARTMENTS, BUT HE KEPT THE VAT
The VAT tax cheat Mick Wallace did not pay was taken largely from apartment sales he made to his family, friends and football associates – including Ireland international Kevin Doyle.
With the property market in freefall, the struggling developer fell back on close family and friends when his Behan Square development, close to Croke Park, did not sell as planned in 2008 and 2009.
Up to a dozen close relatives and football friends – including Ireland star Kevin Doyle – took out mortgages from an assortment of banks to purchase Mr Wallace’s apartments.
But, unknown to them, Mr Wallace’s company kept the VAT they paid and fraudulently declared false
bi-monthly Revenue returns.
The only other party that appears to have been willing to purchase in Behan Square is Dublin City Council, which signed a deal in April 2008 for 10 units to be used in the Affordable Housing Scheme.
Because of the collapse in property values, the scheme has been cancelled and the council has confirmed that it is stuck with six apartments, for which it paid just under €1m.
The loss to the taxpayer is compounded because Mr Wallace appears not to have passed on the VAT on those deals either.
Ireland international Kevin Doyle is friends with Mick Wallace
In addition to the sales to Dublin City Council, the Property Registration Authority recorded details of a total of 13 sales at Behan Square in 2008 and 2009 – the period in which Mr Wallace has admitted he cheated on his VAT.
Despite a slick advertising brochure and ads in national newspaper property pages, most of those sales appear to have been to close family and friends.
With advertised prices starting at €395,000, purchases by assorted members of the Wallace family alone must have amounted to millions of euro.
Starting weeks after the government’s emergency bank guarantee, in 2008 and 2009 some 10 family members, either individually or jointly, bought in the development.
Among them were Mr Wallace’s sons Sasha, who bought in January 2009 with a First Active mortgage, and Fionn, who bought with a Bank of Scotland mortgage.
At the time, both were directors of Mr Wallace’s company M&J Wallace – the firm liable for the unpaid VAT from those apartment sales.
Other family members who bought are listed as Mary Murphy Wallace, Joseph and Gwenda Wallace, Francis Wallace, Brendan and Mary Wallace. Christina Harpur – a sister of Mick Wallace – also bought an apartment with her daughter of the same name.
Others who came forward include associates from Mr Wallace’s Wexford Youths football team – the most prominent being Kevin Doyle who bought in November 2008 with a mortgage from ACC Bank.
Mr Doyle began his career with Wexford Youths and Mr Wallace is not only a friend but has also acted as his manager and adviser.
A staff member working with the property firm managing the communal areas in Behan Square said: ‘I know Kevin. I have met him a few times. I never dealt with him about the apartment, only his mother and the letting agent.
‘As such, it is not Kevin who is the landlord. He would have bought it, I assume, but any time the annual service charge [is due] or if there is a problem with the apartment, I contact his mother.’
Mr Wallace did not respond this weekend to our questions about the apartment sales. Nor did other family members who could be contacted last night.
A resident at Behan Square, however, said he was surprised at Mr Wallace’s actions.
Leon Harding, who bought his two-bed apartment in 2008 for €225,000 under the council’s Affordable Housing Scheme, said he bought because he admired Mr Wallace’s reputation as a developer with a social conscience. ‘He is the best of a bad lot,’ he said.
‘Yes he has done a bad thing… and he’ll have to pay for that. People do desperate things when they try to keep their business going.’
This story was first published in the Irish Mail on Sunday on 29/04/2012
By: Michael O’Farrell
Investigations Editor
A GARDA fraud squad investigation into rogue financier Harry Cassidy has ‘concerns’ that trust funds set up for disabled children were plundered in an effort to pay off struggling property investments.
Mr Cassidy hit the headlines last year when his investment management fund Custom House Capital, which had a number of Ireland rugby stars as clients, was described as a ‘sort of Ponzi scheme’ by a judge.
Now, the Irish Mail on Sunday has discovered that the fraud squad is investigating whether funds left in bequests by parents of disabled and sick children, though managed by ARF Management, another company he ran, were used to pay Custom House’s debts.
Judge Gerard Hogan put the firm into receivership last year. It also had its accounts and investments frozen by the High Court as gardaí and the Director of Corporate Enforcement investigate unauthorised transfers from client accounts.
All the parents and clients set the trusts up with Bank of Ireland, which sold them on to Cassidy.
Custom House was regulated by the Central Bank, though the provision of trust services is regulated by the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010.
This, coupled with the fact that investigations into Custom House will be delayed by the lengthy liquidation process, means that gardaí are focusing primarily on ARF Management at the moment.
Mr Cassidy hit the headlines in October when Custom House, whose clients included rugby stars Brian O’Driscoll and Ronan O’Gara, was put into liquidation.
A report by Central Bank investigators found that Mr Cassidy had taken up to €66m of pensioners’ and investors’ money without their knowledge or permission and used it to plug losses in property investments that his firm was incurring.
ARF Management controls 23 trust funds, some of which were set up by parents who wanted to ensure that their disabled and sick children would be taken care of after their death.
Such trust funds are typically willed to children upon the death of their parents and controlled by a trust management company, which manages and invests the money for the beneficiary.
Mr Cassidy, a former trust manager for Bank of Ireland, acquired the trust business for his company from the bank several years ago when it decided to exit the market.
ARF Management was not the focus of the Central Bank investigation into irregularities at Custom House but investigators did notice that transfers had been made from ARF trusts to meet spiralling debts at Custom House.
Inspectors found evidence that approximately €4.9m of equity and bond assets, representing virtually the entire holdings of two ARF trusts, was ‘used to meet the liabilities of various property-related developments promoted by CHC’.
It is not known whether these two trusts related to funds set aside by the parents of disabled children.
Mr Cassidy and his wife, Elena, remain the sole shareholders of ARF, which was run from the same office as Custom House.
Mr Cassidy declined to comment when contacted by the MoS.
An insight into how he ran the trusts in ARF Management is provided in the Central Bank’s report.
‘These are trusts established under wills and they go on in perpetuity,’ Mr Cassidy told inspectors. ‘So they only wind up on the death of the last surviving spouse of King George V blah blah, so it means they never end. So they have certain beneficiaries and we’ve got to make payments to them, which we do.’
Mr Cassidy told inspectors that he and another trustee had complete control of the trusts and how they were invested.
He said: ‘The only people we consult with is us because most of the beneficiaries are probably in some way indisposed.’
In at least one case, the MoS understands that a Custom House Capital investor who demanded his funds back has become an inadvertent victim of the scandal despite receiving the money.
That’s because gardaí have told him that they consider the funds that Mr Cassidy used to pay him were taken from an ARF trust belonging to someone else and will have to be returned.
In January, the MoS revealed that three top Irish rugby internationals were among the investors who ploughed €1.1bn into Custom House. Brian O’Driscoll, Ronan O’Gara and Paul O’Connell all gave the firm their money to invest before it was shut down.
O’Driscoll handed over at least €400,000 several years ago. The money was used to purchase an apartment in London, which is registered to a Custom House-controlled fund for the benefit of O’Driscoll.
O’Gara and O’Connell joined a Custom House syndicate, which owns a different British-based property investment controlled by the stricken company.
None of the investments made by the trio have been affected by the improper transfers of client funds at Custom House.
The firm controlled investments worth more than €1bn on behalf of 1,500 investors who had trusted Mr Cassidy with their money.
Kieran Wallace, the KMPG liquidator appointed to wind down Custom House, is due to give an update on progress to the High Court next week. He has said it will be a long time before he can establish how much client money was misused.
This article was first published in the Irish Mail on Sunday on 29/04/2012
Words By Michael O’Farrell
Exclusive Photos by Sean Dwyer
HEAD bowed, this was former Fianna Fáil minister Ned O’Keeffe walking out of Cobh Garda Station on Friday night after being questioned for 11 hours on suspicion of making false expenses claims.
Our exclusive picture shows the normally ebullient Mr O’Keeffe looking distinctly glum as he left.
Mr O’Keeffe had no comment to make on the Fraud Squad probe, which was sparked by the Irish Mail on Sunday’s investigation into TDs’ expenses claims almost two years ago.
Since we first highlighted serious questions over the invoices used by Mr O’Keeffe to claim thousands of euro from taxpayers, this paper has campaigned ceaselessly to have the issue formally investigated by the Dáil.
Yet from the very beginning, the Leinster House authorities – headed by Kieran Coughlan, the Clerk of the Dáil – insisted time and again that the expenses claims in question were wholly legitimate. They also launched repeated attacks on the MoS for our reporting of the issue.
Eventually, the MoS was forced to take its file to gardaí – who appear to have quickly established that there was enough evidence to justify arresting Mr O’Keeffe.
Gardaí were also able to persuade a judge that there was sufficient evidence to grant them a warrant to allow them to search Mr O’Keeffe’s home on Friday following his arrest. Mr O’Keeffe has always insisted he is innocent of any wrongdoing.
Nevertheless, attention will now focus on the Clerk of the Dáil and his staff – including Oireachtas Press Officer Mark Mulqueen and parliamentary legal adviser Melissa English – who have repeatedly insisted that there was no question of any possible wrongdoing by Mr O’Keeffe, or of the expense claims in question having been irregular in any way.
The Clerk of the Dáil knew about O’Keeffe in 2010… but he was NEVER investigated
As the former minister is arrested over his mobile phone claims, Oireachtas czar Kieran Coughlan is under intense pressure to explain why he failed to initiate any probe into the bogus bills
By: Michael O’Farrell
Investigations Editor
THE position of the Dáil’s most powerful civil servant is under growing pressure this weekend following the failure of Leinster House to investigate the bogus expenses claims of Ned O’Keeffe – claims that led to the former TD’s arrest on Friday.
Kieran Coughlan, the Clerk of the Dáil, was first asked almost 18 months ago to trigger a parlimentary probe into Mr O’Keeffe’s claims, which were made using fake invoices.
However, despite repeated requests to Mr Coughlan for an official probe, no Dáil investigation was ever carried out. Instead, Mr Coughlan repeatedly insisted that the expenses claims in question were wholly legitimate and that there was no question of them being ‘irregular’.
In the face of Mr Coughlan’s stance, the matter was eventually reported to gardaí instead – and on Friday, fraud squad detectives arrested Mr O’Keeffe on suspicion of fraud regarding the mobile-phone invoices.
Mr O’Keeffe was released on Friday night and a file on the case has been sent to the Director of Public Prosecutions.
Mr Coughlan is now under intense pressure to explain why he was so adamant that there was no evidence of any possible wrongdoing when gardaí clearly believed there was sufficient evidence to arrest the one-time cabinet minister.
He is also likely to face uncomfortable questions as to why the Clerk of the Dáil has such seemingly arbitrary power over parliamentary investigations.
The latest saga began in October 2010, when the MoS revealed that Mr O’Keeffe, then still a TD in the ruling Fianna Fáil party, had claimed for almost €3,000 from taxpayers using bogus invoices.
The MoS was able to point out a string of basic errors in the invoices, including wrong VAT rates, missing invoice numbers and wholly incorrect amounts charged for work allegedly done.
Within days, a concerned member of the public, John Mulligan, had written to Mr Coughlan asking him to initiate an investigation into one of the bogus claims.
Mr Coughlan acts as the gatekeeper to the Oireachtas committee that investigates alleged transgressions by TDs: all requests for an inquiry have to be vetted by him.
However, rather than passing the O’Keeffe complaint on for formal investigation, Mr Coughlan wrote back to Mr Mulligan, insisting that he quote in detail the legislation that he believed had been contravened.
Mr Mulligan did as requested and wrote back with what was his second request for an investigation. Once again, however, no investigation was launched.
Instead of passing this second complaint on for investigation, Mr Coughlan held onto it for almost six weeks. During that period, he contacted Mr O’Keeffe and allowed him to ‘resubmit’ the bogus expenses claim that had been exposed by the MoS.
Once this had been done, Mr Coughlan wrote back to Mr Mulligan saying that Mr O’Keeffe had done nothing wrong, insisting: ‘The claim and payments made by and to the deputy are within the ambit of the scheme.’ A disheartened Mr Mulligan, feeling that he had hit ‘a brick wall’, agreed to withdraw his claim – but only briefly. Weeks later, he wrote back to Mr Coughlan, once again demanding that the bogus claim be investigated.
Again Mr Coughlan replied to Mr Mulligan, this time claiming that the ‘error’ in Mr O’Keeffe’s expenses claim had been ‘clarified’ and that ‘the amounts involved are not in question’. The clerk concluded his letter by stating that he was treating this latest request for an investigation as ‘an administrative matter’ unless Mr Mulligan issued yet another formal complaint.
By the time Mr Mulligan managed to issue another complaint – his fourth written request for an investigation – the Dáil had been dissolved for the general election and Mr O’Keeffe was no longer a TD.
Mr Coughlan wrote back saying that ex-TDs could not be investigated by the Dáil – adding that: ‘There is no question that this expenses claim remains “irregular”.’ When the MoS highlighted the failure of the Dáil to investigate this possible fraud on taxpayers, Mr Coughlan’s office responded not by launching an inquiry but by lodging a series of complaints against this newspaper to the Press Ombudsman and the Press Council.
Of all the complaints filed by Mr Coughlan or Dáil staff on his behalf, only one was upheld. All the others were rejected, and were rejected again on appeal.
Meanwhile, the bogus invoices were still not being investigated. Eventually, the MoS decided to hand its dossier to the Garda Bureau of Fraud Investigation.
Their investigtion culminated in the arrest on Friday of Mr O’Keeffe on suspicion of fraud using a false instrument.
Mr Mulligan, the man who made the four written requests for a Dáil investigation, said last night that the episode did not reflect well on parliament’s ability to police itself.
‘When I made the original complaint to the Clerk of the Dáil, I felt I got the run-around,’ Mr Mulligan said last night. Then, when I tried to resubmit the complaint, having thought it over again, I was stymied again because Ned O’Keeffe was no longer a TD.
‘I think that the attempts not to deal with it that I came up against in the beginning were wrong and the gardaí have to be complimented now in taking this forward and investigating it promptly,’ he said.
This weekend, the MoS asked Mr Coughlan whether he thought his position was tenable given the Garda investigation and arrest of Mr O’Keeffe. We also asked whether Mr Coughlan still felt he had acted correctly in declining to investigate Mr O’Keeffe’s expense claims.
A spokesman for the Oireachtas replied, saying: ‘As this is a matter currently with An Garda Siochána, we will not be making any comment at present.’ Mr O’Keeffe, who insists he has done nothing wrong, will now have to await a decision on the case by the DPP. If he were charged, tried and convicted, he could face a sentence of up to ten years in prison.
This story was first published in the Irish Mail on Sunday on 07/04/2012
Words by Michael O’Farrell
Exclusive photos by Michael Chester
Welcome to the carefree, sun-soaked retirement of rotten politician Pádraig Flynn.
Far from worrying about the threat of prosecution or jail in the wake of corruption findings against him, Flynn and his wife, Dorothy, have spent all week relaxing in an exclusive private villa on the Costa del Sol.
The damning findings of the Mahon Tribunal have been passed to the Criminal Assets Bureau – but Flynn seemed unperturbed when the MoS tracked him down to the Spanish village of San Pedro, just west of glitzy Marbella.
A class act: Pádraig Flynn and his wife Dorothy stroll in Spain¿s evening sunshine yesterday. Above and left, the couple during the week
Enjoying the benefits of his multiple, taxpayer-funded pensions, Flynn and his wife are living in a multimillion-euro villa perched above Linda Vista beach, with sweeping views along the Mediterranean coast.
Overlooked by the Sierra de Ronda mountains, the villa’s location is ideal with a fragrant eucalyptus forest to one side and the ruins of third-century Roman baths to the other.
Behind high walls, the manicured garden is dotted with scented flowers. Banana trees and palms shade a veranda overlooking a private pool. An aging Flynn appeared completely relaxed as he took frequent strolls with his wife in the warmth of the spring sunshine.
And why not? There is, outrageously, no immediate threat to his three hefty pensions; EU Commissioner Maros Sefcovic has confirmed officials won’t even consider withdrawing Flynn’s pension unless he is convicted of a criminal offence – and that will depend on the extent of a CAB investigation.
As a former TD, Flynn also receives his publicly funded pension from the Dáil, on top of his ministerial pension.
He was first spotted on Monday, taking his daily exercise as he ambled along the 2km San Pedro promenade – before enjoying a cool beer at a beach-front café. At his side, Dorothy – whose name appears on the Mayo property the pair bought with corrupt funds – wore a double strand pearl necklace and designer sunglasses.
Driving to and from the palm-lined esplanade in a black VW Golf, the couple seldom changed their routine, parking at one end of the beachfront then walking to the other for a cold drink or lunch.
Una cerveza: Pádraig and Dorothy Flynn a enjoy a cool drink in a seaside café in Spain
Then they strolled back to their car and returned home, pausing at times for a breather or to admire the views across the bay towards Gibraltar.
At one point, they even left the privacy of their villa to drive to a nearby fountain for some holiday snaps before returning home immediately.
On Holy Thursday, they once again appeared for their seafront stroll, this time pausing for an hour-long lunch in a fish restaurant halfway through.
Throughout the week, the snowy-haired Flynn wore the same wine-coloured sweater and camel slacks, making him instantly recognisable.
Emerging again on Friday, Flynn accompanied his wife to a supermarket, where they bought supplies such as water and fruit before returning to San Pedro for another leisurely ramble.
This time, they paused frequently, for Mrs Flynn to sit on the sea wall. With the sky threatening rain, they did not stop for a drink or a meal before returning home.
The substantial villa appears to be the Spanish residence of Flynn’s daughter Beverley and her developer partner, Tony Gaughan. It is a lavish residence for Ms Flynn, who was unable to pay the €2.4m she owed RTÉ after a failed libel claim, instead settling for roughly half that amount.
Similar villas in the area are currently for sale for between €1.8m and €2m.
Relaxed: Above and below, Flynn and Dorothy take their daily promenade beside the azure waters of San Pedro Bay, near Marbella on the Costa del Sol
Mr Gaughan owns a number of property companies in the Linda Vista area into which he has invested millions.
One of them, Linda Vista Enterprises SL, was formed just last May and has a paid-up share capital of just under €1m.
But it is another of his companies – jointly owned with Beverley – that ties in directly to the villa where Flynn and his wife have been sojourning since the Mahon Report was published.
The grandiose-sounding G&F Enterprises & Investments SL was formed in February 2010 to run a nearby fast-food restaurant, Captain Macs. Having lost €110,000 last year, the business has collapsed and is now shuttered up. A new owner is preparing to open a bar.
The company behind Captain Macs is still registered and lists its business address as the very villa now occupied by Flynn and Dorothy.
It is possible that Flynn is spending his days in Spain indulging in his favoured pastime – painting – and trying to ride out the storm of publicity created by the release of the report. But the tribunal’s findings seem to have cost him hardly a thought.
His response, emailed to media outlets the day after publication, amounted to just two sentences.
‘During my lifetime of involvement in politics I have never sought nor have I ever received a corrupt payment. I absolutely reject any such finding of this tribunal in that regard,’ he said, adding that he did not intend to issue any further comment. The dismissal harks back to his infamous Late Late Show interview in 1999, when he provoked public outrage for his complaints about the difficulty of maintaining three households – advising others to ‘try it some time’.
Now Flynn’s name will be irrevocably associated with corruption thanks to the force of the tribunal’s findings against him.
Those findings concluded that, at a meeting that probably took place in April 1999, Flynn, minister for the environment at the time, asked developer Tom Gilmartin to make a substantial donation to Fianna Fáil.
The tribunal found that the request was made on the understanding that Flynn would take steps to ease problems being faced by Mr Gilmartin in relation to his plans for what became Liffey Valley shopping centre.
Luxury: Above and below, the villa, with its pool and underground parking, where the Flynns are staying
‘Mr Flynn wrongfully and in the circumstances corruptly sought a donation from Mr Gilmartin for the FF party,’ the inquiry concluded.
‘Mr Flynn, having been paid £50,000 by Mr Gilmartin for the Fianna Fáil party, proceeded wrongfully to use the money for his own personal benefit,’ the damning report continued. According to the tribunal, that £50,000 funded at least a significant portion of the purchase of a farm in Cloonanass, Co. Mayo, instead of being used for political purposes. The farm, a stretch of poor land now covered in forestry, was bought for €47,000 and registered in the name of Mrs Flynn. She told the tribunal she had never seen it and had never farmed it in any meaningful way.
But that did not stop her finding a way to be officially designated a farmer, allowing her to claim €212,000 in forestry grants. She is entitled to annual grants for the next eight years, which could total another €100,000.
To qualify, Mrs Flynn made hay on the land at a cost of £150 and paid tax on the £1,100 profit.
This allowed her to tell the Revenue that 25% of her income was from farming, entitling her to higher grant payments.
Strolling carelessly along the beachfront in Spain this week, she doesn’t look much like a farmer – but neither does her husband look like a former powerful Eurocrat.
Flynn appears able to avoid recognition in Spain but there seems little likelihood that any immediate moves will be made against him from his old base in Brussels.
EU authorities responded this week to demands – led by Labour MEP Nessa Childers – that his commissioner’s pension be withdrawn.
Writing to Ms Childers, the commission’s vice-president for administration, Mr Sefcovic, expressed disquiet about the findings – but said that Mr Justice Mahon’s conclusions carried no weight.
Mr Sefcovic said: ‘The Commission’s understanding is that the findings of the Mahon Tribunal… do not represent the verdict of a court after due process.’
Having claimed to ‘fully understand that there is widespread anger among Irish citizens,’ Mr Sefcovic then made it clear that they would first await a move by CAB: and only then would they even consider stripping Mr Flynn of his EU pension under laws known as Article 245. ‘The result of the proceedings of the CAB will play an important element to be taken into account by the Commission as to whether action under Article 245 should be taken,’ he said.
Ms Childers said: ‘Pádraig Flynn has disgraced Ireland’s good name in Europe. He should no longer receive his sizeable pension from the commission. He was found to have taken corrupt payments before he was commissioner, falsified documents while he was a commissioner, and made false statements to the tribunal after he was commissioner.’
But for now, Pádraig Flynn will be able to spend his Easter in the sunshine, safe in the knowledge that the citizens of Ireland are paying for him to live like a king. If we’re lucky, he might raise a glass to us, smile and say: ‘You should try it!’
What happened when our reporter asked the Flynns about Mahon: She stared right at me, put her fingers to her lips… then zipped her mouth closed
It was the moment I had been anticipating for days – the chance to put some questions to Pádraig Flynn and his wife Dorothy.
To date Flynn has issued a meagre three-line statement, having been found to have received a substantial corrupt payment by the Mahon Tribunal.
Cutting a proud figure as always, Flynn was halfway back to his car, having enjoyed an hour-long lunch in a discreet seafood restaurant on the San Pedro promenade.
Leisure: Pádraig and Dorothy Flynn take the sea air in Spain
I hailed him as he approached.
‘Mr Flynn?’
‘That’s me,’ he almost sang, as bold and confident as that night on the Late Late Show.
‘How are you?’ I asked.
‘Not so bad,’ he returned in that same sing-song voice but eyeing me a little more warily now.
‘I was hoping I could have a chat with you. And I hope we can be friendly about this,’ I ventured. ‘My name is Michael O’Farrell, and I’m the investigations editor of the Irish Mail on Sunday…’
He froze.
‘No’.
Then he pursed his lips together tightly, cocking his head in the air, and marched on as if no one was there.
Stepping up alongside them I kept pace with them and asked again. After all, there was so much for him to answer. Did he accept the finding of corruption made against him by the Mahon Tribunal? Did he regret taking that cheque from Tom Gilmartin? Was he shocked that they had traced that IR£50,000 all the way round the houses, discovering that it was used to buy his wife a farm? Should he have insisted on taking the money in cash, so nobody would know who had given it to him?
I could have asked 100 questions. Would he be going to court? Would he give back his pensions? Was he sorry? Did he want to apologise to the people of Ireland, the constituents who had been shamed by him and by his ‘class act’ of a daughter?
I tried a more neutral approach. ‘You don’t want to say anything more than the three lines of your statement?’ I asked as he strutted on.
Accosta del sol: Michael O’Farrell, right of picture, confronts Pádraig Flynn and his wife, Dorothy, in San Pedro
Beside him, Dorothy had not even flinched and continued to look straight ahead. I turned to her. After all, it was she who had been given the farm bought with Tom Gilmartin’s money, corruptly obtained. And of course she had made money from it since, even claiming EU grants against it. The taxpayer had a reason to seek her views on the subject too.
‘What about you, Mrs Flynn?’ I asked. ‘You were involved as well. The land was in your name. You have never said anything. Do you want to say anything at all?’
Turning to face me, her response was extraordinary – and yet somehow totally in keeping with the arrogant persona of her husband. Instead of speaking, she lifted her head, put her fingers to her lips – and drew them across in a zip-like motion.
I was meeting a wall of silence. So I tried a different tack, hoping the name Gilmartin might draw him. It had, after all, been Flynn’s famous Late Late Show remark about Mr Gilmartin’s health that proved a turning point in the tribunal. Flynn’s sneering prompted the irate developer to tell the judges the story of how he had gone to Flynn to complain about corruption – and had been chiselled into handing over a £50,000 bribe.
‘I thought maybe you regretted saying that,’ I prompted Flynn, to no response whatsoever – not even a quickening of his pace. He simply carried on as if he was the only person present.
‘Wouldn’t it be nice to try to clear your name,’ I continued. ‘Will you try to clear your name?’
Nothing.
Then I held out my business card indicating that I’d be available should he ever change his mind.
Suddenly he stopped dead and turned, taking the card.
‘Let me have a look at you,’ he almost growled. And he took out his own camera to point at me.
Why would he want my picture? Was it a bizarre attempt to get me to leave? Something for his family album? Whatever the point, I had no problem with it and posed, smirking with my best passport smile as he focused and took a shot.
‘That’s a nice holiday snap,’ I joked.
He chuckled to himself, putting his camera away, and smartly resumed his walk.
For another few paces I kept plugging away but it was pointless. He never once again acknowledged me in any way.
I couldn’t even persuade him to say something about how hard it must be to keep up a lifestyle like his on just three pensions – as he had done in that 1999 Late Late interview, when he infamously said: ‘You should try it!’
So with that, I let him go: back to his lavish retirement, his walks down the sunny promenade, his meals and cold beer – all at our expense. If anyone in Ireland is hoping for an apology from Pee Flynn, it seems they had better be ready for a long wait.
