Saturday 25 March 2017

Shades of 'Father Ted' in Lowry transaction, court told

TD Michael Lowry. Photo: Gerry Mooney
TD Michael Lowry. Photo: Gerry Mooney
Senior Counsel Remy Farrell

Tim Healy

The Revenue Appeals Commissioners had clearly found Independent TD Michael Lowry misappropriated some €372,000 from his own company in 2002, lawyers for the DPP told the High Court.

The matter had "shades of Father Ted" and the court should cast "a very jaundiced" eye on Mr Lowry's argument there was "nothing to see here", Remy Farrell SC, for the DPP, said.

Mr Lowry, in his continuing High Court case aimed at stopping his forthcoming criminal trial on tax charges, had asserted, following a Revenue Appeals Commissioners hearing last year, that he has no personal tax liability, any corporate tax liability was "self-corrected" and the outstanding liability was a "very modest" surcharge of €2,410, counsel said.

Mr Lowry had also argued his prosecution was effectively a waste of public money, as the penalty for the latter offence was a fine of some €125, counsel added.

If Mr Lowry was convicted on the various charges levied against him, the penalties could be a fine of up to €120,000 and/or five years' imprisonment. The DPP is opposing Mr Lowry's challenge aimed at halting his trial, which remains stayed pending the judicial review case.

The transaction which gave rise to the criminal prosecution involved a €372,000 payment, due to Mr Lowry's company Garuda by a Finnish company, Norpe OY, which, on the direction of Mr Lowry, was in 2002 paid into an Isle of Man trust account nominated by Omagh accountant Kevin Phelan.

Mr Lowry denies charges of allegedly filing incorrect income tax returns for the year 2002 and of conniving in the alleged delivery by Garuda of incorrect corporation tax returns for the years ending 2002 and 2006.

He also denies wilfully causing a company to fail to keep proper books of account between August 28, 2002, and August 3, 2007.

In submissions for the DPP, Mr Farrell said the original Revenue assessment was raised on foot of a diversion by Mr Lowry in 2002 of monies due to Garuda for his own use.

The Appeal Commissioners had considered he had misappropriated monies from the company.

While Mr Lowry claimed he had in 2007 self-corrected and self-declared the "very peculiar" 2002 transaction, he "did anything but", counsel said.

When Mr Lowry sought to reintroduce the monies back into Garuda in 2007, he "knew full well" they were not earned the previous year and effectively sought to "layer" them back into the company.

He then "stayed silent" until tape recordings - the "Lowry tapes" - about the transaction came into the public domain and sparked a Revenue investigation. There was the "clearest evidence" a bogus invoice was generated to cover up what happened in the 2002 transaction and to suggest the money at issue was earned in 2006.

It was unclear what happened to the money between 2002 and 2007 and whether it was "simply resting" in the account, counsel added.

Leaving aside other issues, it was quite clear there was at least a very substantial underpayment of corporation tax and the issue for the jury in the criminal trial was whether "wilfully" incorrect tax returns were provided, counsel said.

While Mr Lowry also alleged a "sustained campaign" by the 'Sunday Independent' against him arising from the tapes and that stories run about him were "improper", this clearly involved matters of great public interest which the media was entitled to report, it was claimed.

Irish Independent

Promoted articles

Editor's Choice

Also in Irish News