Wednesday 21 March 2018

Black widow and the adviser who duped music duo

The case of Foster and Allen wasn't the first time their accountant hit the headlines, writes Jerome Reilly

MICK Foster and Tony Allen were delighted when they each received the official-looking letters on Revenue Commissioners headed notepaper confirming that, finally, their tax affairs were in order.

Negotiating with the tax authorities had been a long, hard road, but Foster & Allen, Ireland's most successful musical duo, had undertaken the journey with the help of Patrick Russell, a financial adviser, barrister and accountant. The two musicians had asked Mr Russell to deal with the taxman on their behalf after being embroiled in a lengthy dispute about whether they should benefit from the Artists Tax Exemption.

They had each handed over bank drafts for €50,000 to Mr Russell specifically to settle their tax liabilities on royalties, as well as other fees and payments to Mr Russell, it was claimed in the High Court last week in a case which has left the two singers facing a tax bill of €3m each.

It was Mr Russell's office that some years ago, and with much cajoling, had issued the duo with official looking letters purporting to be from the Revenue saying the two musicians were tax compliant.

But the letters they received from Mr Russell were forgeries as District Court Judge John Neilan noted during an earlier case in Athlone 2009, much to the shock of both musicians.

Speaking at his home in Walshtown, just outside Mullingar, Mick Foster told the Sunday Independent: "This fella, Russell, who was looking after our affairs was like that Joe Dolan song in the Sixties -- The Answer To Everything. If I got a letter from Limerick going bananas about tax, I would give the letter to him and he would say: 'Oh, that's a mistake. That letter should have come from Dublin, don't worry about it'.

"With both of us being musicians out of the country a lot of the time, our attitude was: 'why have a dog and bark yourself?' That's the way it went. We kept on getting letters from the Revenue and then from the courts and we kept giving them to him. In the meantime, he said he had done a deal with the Revenue and sorted out our problem. We had given him bank drafts for €50,000 and I suppose this is where the flashing red lights should have come on. He wanted the bank drafts made out in his name," Foster said.

"We gave them to him, plus his fees and everything else. We were in England at the time and we kept getting summonses and handing them over to him to look after and he said, 'I'll sort them out and it will be grand'. The next thing we were on tour in the UK in 2008 and I got a phone call from my secretary, saying 'You are up in Mullingar Court in an hour and you better get representation or there will be a warrant out for you'.

"I said: 'What in the name of Jesus are you talking about? Get Pat [Russell] quick.'

"And she said, 'I can't. He's in Mountjoy'."

Now the duo from Westmeath, who in the past appeared on Top of the Pops in leprechaun outfits, have found

that the taxman wants all their crock of gold which, according to Foster, is not worth a combined €6m "nor anywhere near it".

"We are not U2," he said.

Last week's separate legal challenges by the duo against demands by the Revenue Commissioners for about €3m each for unpaid taxes were both dismissed.

The Revenue claimed it is due unpaid taxes of about €1m from each of the two men in respect of royalties but the total amounted to more than €3m because of penalties and interest charges.

The Revenue Commissioners had sought summary judgment for €3.389m against Tony Allen of Mount Temple, Co Westmeath, for unpaid income taxes and penalties between 1986 and 1997.

Mr Allen argued he had a bona fide defence and the matter should go to a full hearing.

In separate proceedings, Foster, of Walshtown, Mullingar, Co Westmeath, asked the court to set aside a summary judgment order for €2.947m obtained by the Revenue Commissioners in December 2008 over unpaid taxes from 1986 to 2002.

Gary McCarthy, for the Revenue Commissioners, opposed both applications.

Giving his decision, Mr Justice John Hedigan said the musicians had brought "great joy" to many over the years.

He said he was sorry he had to rule against them. The judge granted summary judgment for €3.389m against Mr Allen after finding he had made out no arguable defence to the Revenue claim which would entitle him to a full hearing.

Both Foster and Allen are intent on appealing the judgement and are in talks with legal advisers this weekend. Both claimed in the High Court that they were victims of a fraud perpetrated on them by Mr Russell.

Mr Russell formerly lived in a mansion at Steelstown, Rathcoole, Co Dublin, but is now mostly based in Manchester though his family remains in Ireland.

Foster and Allen are not the only people who have made serious allegations about how their tax and investment affairs were handled by Mr Russell whose name has cropped up in some unusual places.

Mr Russell, the Sunday Independent has learned, is the subject of a wide-ranging investigation by the Garda Bureau of Fraud Investigation which has been going on for some years but appears to be still some way from completion.

Mr Russell, a former member of Sinn Fein, was also a former business associate of ex-Taoiseach Albert Reynolds. He also represented Liam Lawlor at the Flood tribunal (later the Mahon tribunal) and also Mr Lawlor's estate after his death. He also gave evidence at the tribunal in another capacity when he was questioned about his co-ownership, along with Mr Reynolds, of a Guernsey-based company, Universal Management Consultants Limited, that sought to buy lands in north Dublin.

When giving evidence to the tribunal, Mr Russell described himself as "a barrister-at-law with a BA in Management Science". He also held an MA, was a Chartered Arbitrator, a member of the Institute of Management Consultants and held a diploma in Advanced Marketing. He also held a diploma from the Institute of Chartered Accountants.

Patrick Russell was also once financial adviser to the so-called 'Black Widow' Catherine Nevin, who was convicted in 2000 of murdering her husband Tom Nevin at his pub, Jack White's, in Brittas Bay.

During the original murder case, Mr Russell was a key witness for the State.

Nevin and Mr Russell first met in 1996. In his evidence, Mr Russell told the court that Nevin had told him that the Jack White's business was going very well but Tom Nevin was drinking excessively and not pulling his weight. Mr Russell said Nevin had told him she would love to buy her husband out but did not believe he would go.

In her failed appeal against her conviction at the Court of Criminal Appeal, Nevin's legal team raised the issue of what they claimed was "crucial new evidence" as to the credibility of three prosecution witnesses and "possibly also the credibility and connections of another State witness, barrister Patrick Russell".

That was years before Foster was phoned by his secretary during his UK tour and told he was being summonsed to Mullingar District Court and that Mr Russell was "in Mountjoy".

Mr Russell was being held for contempt of court in relation to alleged breach of contract over the sale of a Dublin property at Inns Court worth €1.3m. Mr Russell, Judge Peter Kelly was told, had failed to honour a deal he struck in July 2005 to buy the property. Judge Kelly said that Mr Russell "as a practising barrister ought to really know better".

The judge said: "I am satisfied he is in contempt of court and accordingly I'm going to direct that he be committed to prison."

Mr Russell was released after some hours in Mountjoy. He subsequently resigned from the Bar Council which was investigating a number of complaints against him at that time. A settlement was later reached in the dispute over the property at Inns Court.

Patrick Russell handled investments and tax affairs for a number of entertainers, property developers, doctors, solicitors and some public representatives, especially in the midlands.

His business dealings with the singer Declan Nurney are the subject of papers separately lodged in the High Court in the name of Hooley Entertainments and Declan Nurney, both against Mr Russell.

For Foster and Allen, there is deep worry. "We thought the money was paid and it wasn't," Foster said.

"But I suppose it's a bit like the situation that if you gave someone money to go in and tax the car for you and they didn't do it. You might think that your car was taxed but you would still be liable if you were stopped by the guards without an up-to-date tax disc. The liability is on you.

"The only thing that I was not happy about was the way it came out in some newspaper reports and on the radio and TV news. It kind of came across that we didn't pay any tax but that is totally wrong. We have been paying tax every single year on our gigs and our tours.

"We have this man, Russell, who was looking after our affairs and we trusted him. If you employ an accountant who is also a barrister to do a job for you, I mean, where do you go from there?," he said.

"That's what has kind of happened to myself and Tony."

Sunday Independent

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