Sunday 25 September 2016

Criminal Assets Bureau uncovers payroll scam linked to dissident IRA

So-called 'republicans' are turning to white collar crime

Published 21/06/2015 | 02:30

The Criminal Assets Bureau is investigating what it suspects is a massive payroll fraud operated for the benefit of dissident republicans that could cost the State millions in unpaid taxes.

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The fraud was uncovered in recent months by detectives investigating dissident republican and organised crime groups which they believe are turning to ostensibly legitimate businesses to launder illicit funds.

A source close to the investigation said a businessman who has previous convictions for fraud is suspected of organising the scam, by setting up a network of front companies with bogus payrolls in order to claim employer incentives and tax breaks from the Revenue Commissioners.

A small number of people have been arrested, and the offices of "professional advisers" have been raided.

The informed source said the investigation is in its early stages, as it unravels the myriad of companies it suspects are linked to the tax scam.

The CAB is still counting the cost to the State of the enterprise, which the source said could "undoubtedly" run to millions.

Investigators uncovered the scam a number of months ago as part of a broader crackdown on money laundering by dissident IRA groups.

Detectives were trying to trace how these groups were laundering the proceeds of oil laundering and fuel smuggling, which have up to now been considered their main source of funding.

In the course of that, detectives identified a network of businesses fronted by legitimate business people with no known connection to dissident republicans or organised crime. They eventually linked the companies back to a businessman with a previous criminal record and past links to republicans.

"We are breaking down a system that they had in place. They were simply stealing funds that should have been returned to the Revenue," said the source. "They set up a wide web of companies to muddy the trail.

"If you take the length of time this scam has been operating, the money involved could run to millions. The loss is to the taxpayer ultimately."

Garda sources have described the dissident republicans' shift to white collar crime as "corporatisation" of the outfit.

Dissident groups have been looking for legitimate outlets to launder the estimated €40m turnover from international and cross-border smuggling and extortion. The traditional method of laundering is through cash enterprises such as security companies and pubs, that allow them to plough their illicit funds through the business.

However, a more common means of money laundering used by the one-time Real IRA has been to channel funds from its smuggling operations as business "loans" to a number of legitimate enterprises, sources said.

Forbes Israel published a terrorist rich list last year, which put the Real IRA in ninth place, with an annual turnover of €40m.

The magazine claimed that the Real IRA generated the massive income from smuggling tobacco and oil laundering, and other criminal enterprises. Forbes said its calculation was based on US State Department information and academic research.

A report by accountants Grant Thornton recently estimated that the State loses around €140m to €260m every year as a result of fuel fraud, while tobacco smuggling cost the Revenue €240m and more in unpaid taxes.

Police and tax authorities on both sides of the border have made concerted efforts to clamp down on fuel laundering operations around the border area. A number of fuel laundering operations have shut down, but the practice still persists.

Sunday Independent

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