Wallace fined €7,000 but says he has 'done nothing wrong'

But he insisted he did not think he had been at fault because he had since paid all the money that was due.

Earlier this year, the Irish Independent revealed that Wallace -- who is facing bankruptcy and the possible loss of his Dail seat after ACC Bank secured a €19m debt order against him -- faced the threat of jail for failing to pay staff contributions to their pension fund.

The politician did not pay his construction workers' pension contributions for 23 consecutive months, according to criminal charges brought against him by the Pensions Board.

However, the board, which is investigating almost 200 construction firms for similar offences, withdrew 19 counts yesterday.

It initiated proceedings at Dublin District Court after the developer-turned-politician fai- led to pay €49,311 to the Construction Workers Pension Scheme (CWPS) between January 2008 and January 2010.

The CWPS is the special pension scheme for construction workers which covers pension, death in service, and sick pay.

Construction firms are legally obliged to take money from workers and pay it into the scheme.

Wallace pleaded guilty yesterday to five counts of late payment of pension contributions, for the first five months of 2008.

After he was fined, Wallace said that the case came following a disagreement with the Pensions Board about how much was due to be paid to his employees' pension scheme.

"At no stage was the employee contribution withheld," he said, adding that he was not embarrassed by the prosecution. "I don't think I've done anything wrong, I've paid all the money due and at no stage had I withheld the workers' contribution. I realise it was a very serious matter and I think the courts are right. I have been fined €7,000, there was 24 charges initially against me, it could have been €120,000."

Mr Wallace was given one year to pay fines imposed yesterday, as well as the Pensions Board's legal costs, or else he can be jailed for 15 days.

The Pensions Board wrote to M&J Wallace in May 2010 requiring them to provide information, documentation and an explanation. Four months later another warning letter was sent to the firm.

In October 2010, forensic accounting analysis found that €49,311 was deducted from employees' pay for remittance to the CWPS but just €26,557 was paid to the scheme.

After summonses were issued in July this year, the outstanding amount due had been paid.

Wallace told the court: "I accept that we did not pay on time. There was a discrepancy in how much was due; there was a lot of debates and arguments."

The court also heard that in October, ACC bank secured summary judgment orders in the High Court for €19m against the TD and his company, which is in receivership.

Judge McDonnell said that, due to the country's economic difficulties, similar types of offences had come before the courts.

He said Wallace's offences became more serious by virtue of the fact that they had continued over a period of time.

Mary Hutch, head of regulations of the Pensions Board, said Mr Wallace's prosecution was "significant".

The board is currently investigating about 190 similar cases and there are about 40 cases pending before the courts.