Boss who used €41k of pension money in effort to save failing construction company avoids jail
Published 15/05/2013 | 16:47
A COMPANY director, who dipped into pension fund contributions of 56 workers in a vain bid to prop up his cash-strapped construction business, has been given an 18-month suspended sentence.
Colm McNulty (47), director of Limestone Construction, Kilreesk Lane, St Margaret's, Dublin, pleaded guilty to withholding €41,457 which was supposed to be passed on to a pension scheme.
The father-of-three was prosecuted at Dublin District Court on 15 counts under Section 58A(1) of the Pension Act.
It came following a probe by the Irish Pensions Board (IPB) into deductions from the salaries of his staff from July 2006 until September the following year. Five counts were withdrawn today and McNulty pleaded guilty to the remaining 10 charges.
The maximum penalty on conviction in the District Court for each offence is one year's imprisonment or a fine of €5,000 or both.
In 2008, a bench warrant was issued for his arrest when he did not show up for a court hearing but he was later picked up by police in the UK on foot of a European Arrest Warrant.
Mary Hutch, head of policy at the IPB, told prosecution counsel Karl Monahan that forensic accountants analysed Limstone Constructions' books and discovered that contributions totalling €41,457 were deducted from the wages of 56 workers.
However, the money was not passed on to the Construction Workers Pension Scheme. but was “held by the company director” instead.
The shortfall of contributions for the 56 affected employees of Limestone Construction, which has gone into liquidation, means there is going to be a deficit in their pensions. She also pointed out that had one of the workers died while in McNulty's employment, their family would not have been entitled to a death benefit worth at least €63,500
She agreed with defence counsel John Berry that McNulty was co-operative and that when she went to his office in 2007 she could see his business was in “disarray”.
In mitigation, Mr Berry said McNulty had spent five days in custody after his arrest in the UK before be returned to Ireland to face the prosecution. While out of the country he had gone to Nigeria to work as an engineer and the money he earned there was used to support his family.
His company was owed stg £700,000 in relation to a building project in Belfast and that has still not been paid.
Mr Berry said McNulty had tried to trade his way out of difficulty and had injected his own money as well as the pension funds in an attempt to save the business and keep his workers in jobs. The lawyer also argued that it was “not a Robert Maxwell type of case, not the case of a man who plundered an employees' pension fund so he can live a lavish lifestyle”.
He has worked since the age of 16 but now has no savings and is estranged from his wife. He lives in Kells, Co. Meath in a house lent to him by friends. Meanwhile, several judgements are to be registered in relation to other creditors he had and he risks being disqualified from being allowed to hold the directorship of a company, counsel said.
Judge William Early said McNulty had taken more than €40,000 that was due to be sent to the pension scheme of his workers and applied that for the benefit of his company. “And that is morally and legally wrong,” he said.
It was important to make clear to employers that this is an illegal act and there are serious consequences for breaches of the Pensions Act, he added.
He also noted the points raised by the defence in pleas for leniency as well as the fact that McNulty had pleaded guilty and has no prior criminal convictions. He imposed sentences totalling 18 months but suspended them on condition that McNulty does not re-offend within the next year-and-a-half.