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Longest ever disqualification for frontman in ‘conscious’ and ‘calculated’ VAT fraud

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The self-confessed frontman for a massive VAT carousel fraud has been hit with the longest ever directorship disqualification in the history of the State. 

Mr Justice Brian O’Moore disqualified businessman Kevin Rabbitte from acting as a company director for 14 years and three months after finding he had engaged in a “conscious, calculated and continuous fraud”.

It is understood the case will now be examined by the Office of the Director of Corporate Enforcement to consider a potential criminal prosecution.

Mr Rabbitte (48), of Clonberne, Ballinasloe, Co Galway, admitted using the VAT number of his company, Westman Plant and Civils Ltd, to purchase millions of euro worth of plant machinery at auctions in the UK. The equipment was subsequently imported into Ireland but no VAT was paid.

He claimed he did this behalf of another person, received small commissions totaling €10,000, and that his company never benefited.

But he refused to identify this “third party” as he claims he and his wife have been “threatened with serious consequences” if he does so.

An investigation by liquidator Myles Kirby, of Kirby Healy Chartered Accountants, found that between July 2014 and June 2015, the firm’s VAT number was used to import nearly €8m worth of plant and machinery into Ireland, but some €3.2m in VAT payments were evaded.

Initially, Mr Rabbitte robustly denied fraud. But he made a number of admissions earlier this week just before an application by the liquidator was due to be heard in the High Court.

The businessman admitted to attending 18 auctions where the value of machinery purchased was just over €4m and the loss due to the Revenue in unpaid VAT and penalties amounted to €1.2m. He also consented to being disqualified as a director and to being held personally liable for the company’s debts up to €1.5m.

In a judgment delivered on Thursday, Mr Justice O’Moore disqualified Mr Rabbitte from being a company director for 14 years and three months.

This exceeds by three months the previous longest period of disqualification, handed down to Custom House Capital's former chief executive Harry Cassidy in 2016.

The judge said the only business Mr Rabbitte’s company had engaged in was “the business of fraud” and that when “the jig was up” after Revenue began asking questions about unpaid VAT in 2015, he had allowed the firm to be struck off the Companies Register.

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Mr Justice O’Moore said Mr Rabbitte then tried to persuade Revenue not to restore the company or to appoint a liquidator.

When Mr Kirby was appointed, Mr Rabbitte failed to cooperate with him “to an utterly egregious extent“, the judge said.

He said Mr Rabbitte failed to comply with court orders to provide documentation and other information and gave evidence, now known to be dishonest, in which he denied any knowledge of or participation in the fraud.

Even if it was true that Mr Rabbitte was now being intimidated by a “fearsome anonymous person”, the businessman had shown himself to be the sort of person who would facilitate the use of their company for the purpose of defrauding the taxpayer.

The judge said Mr Rabbitte had not reported the alleged intimidation to the gardaí, which would be the appropriate thing for a citizen to do.

He also noted that although Mr Rabbitte had consented to being liable for up to €1.5m, it did not appear he had the funds to meet such a laibility.

Mr Rabbitte was not in court for the judgment.

In an affidavit, Mr Rabbitte said he became acquainted with the third party behind the scheme when this person bought machinery from an old company he owned. Kevin Rabbitte Sand and Gravel Ltd, which has ceased trading due to the economic downturn in 2009.

He said this person also purchased a car from him and “kept in touch with me intermittently”.

According to Mr Rabbitte, the third party made contact with him in late 2014 or early 2015 while he was working in the UK and asked him to attend an auction in Leeds.

“He told me to bid on machinery on his behalf and as an incentive he would look after me in the event he was successful in purchasing any machinery,” Mr Rabbitte said.

Mr Justice O’Moore noted the approach was made “some time” before the auction and Mr Rabbitte had the opportunity to reconsider.

In the affidavit, Mr Rabbitte claimed he attended around ten auctions for the third party. Machinery was purchased and arrangement made for it to be imported, but he had never seen it again and did not know what became of it.

He claimed that, completely unknown to himself, the third party continued to use the company’s VAT number for numerous further transactions at auctions in the UK.

In the affidavit, Mr Rabbitte also claimed that a letter he received from the Revenue in 2015 took him “completely by surprise” and he stopped attending auctions.

The judge said it was striking that Mr Rabbitte was not intimidated into attending the auctions he did go to and was not intimidated when he refused to continue attending.

It was “a separate issue” that Mr Rabbitte now claimed to be too petrified to identify this individual.

The judge said it was likely Mr Rabbitte “knew the sort of person he was dealing with” but agreed to attend the auctions when he was told he would be “looked after”.


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