Saturday 15 December 2018

Lawyer in €32m tax scandal had Swiss account

Bad week for the tarnished profession as two more legal eagles come crashing to earth


THE legal profession, already damaged by financial scandals, has been hit with a new blow to its tattered reputation as two solicitors admitted they operated a secret €32m slush fund to deliberately evade tax.

The two solicitors escaped being banned from practising law, despite admitting they had a clandestine account designed to foil the Revenue Commissioners. One of them even had a secret Swiss bank account.

Dublin solicitors Henry Colley -- son of the late Fianna Fail deputy leader, George Colley -- and Colm Carroll, were suspended from practice for a year.

They faced a number of charges, including setting up the secret bank account, withholding legal fees owed to barristers and 'doctoring' the accounts of their thriving practice, which made a fortune handling legal cases for the old health boards

Neither Colley nor Carroll can act as sole practitioners for three years once their suspension is lifted. And they must pay €50,000 each to the solicitors' compensation fund.

Last Friday, a High Court judge upheld a recommendation by the Solicitors' Disciplinary Tribunal not to bar the pair from practising law again.

The Law Society had urged that they should receive the ultimate sanction of being struck off from the Roll of Solicitors.

Mr Justice Liam McKechnie had been told that much of the funds moved into secret bank accounts were legal fees paid by health boards. He said said the only reason he did not strike off the solicitors was because clients were not exposed.

The two solicitors admitted to around 50 charges of professional misconduct. They have already made a significant but undisclosed settlement with the Revenue Commissioners after self-confessed "wrongful" tax evasion.

The judge said he believed his decision not to strike off the solicitors, both in their 50s, would help maintain public confidence in the legal profession and uphold the good name of the Law Society.

Carroll no longer practices as a solicitor, but Colley is still working at Roger Greene and Sons, Bridge Street, Dublin.

The practice lost its highly lucrative health board work to rival firm, BCM Hanby Wallace, following the 2004 disciplinary tribunal hearing.

Both solicitors admitted misconduct, including deliberate non-compliance with the solicitors' account regulations and deliberately falsifying books of account to evade paying tax.

The High Court heard that the solicitors fiddled with the accounts in an effort to deliberately mislead the Law Society.

The men wanted to create the impression that substantial fees had been paid to barristers, when the money was in fact lodged to a secret account.

Both solicitors withheld information from the Society for some time after it began its investigation. They initially failed to reveal details about an account at the Ulster Bank, O'Connell Street, Dublin, in which some 46 per cent of monies paid to the firm were held, and from which large cash withdrawals were made by both solicitors.

Funds were used for personal use and to renovate the farm owned by Carroll's wife

The Law Society stated that its investigation revealed a list of accounts maintained by both solicitors, including an account in the name of a defunct company and a Swiss bank account in the name of Mr Colley and his wife.

James O'Driscoll, for Mr Carroll, sought the costs of Friday's proceedings against the Society, as the court had refused the application to strike off his client. Mr Justice McKechnie replied tartly: "Not a chance," and awarded costs to the Law Society.

He said both men were guilty of multiple and extremely serious breaches of the solicitors' account regulations and, during much of the society's investigation, had been "downright misleading''

The judge said the most critical factor in his decision not to strike off both men was the fact that clients had not been left with any liabilities, while the solicitors were able to meet their own liabilities.

The case is another savage blow to the legal profession already hit by the recent cases of Michael Lynn, Thomas Byrne and Niall Colfer.

Last week, it emerged that the Sandymount home of missing solicitor Michael Lynn is to be sold at public auction

The house, 20 St Alban's Park, the family home of Mr Lynn and his wife, Brid Murphy, is the subject of a number of claims from banks, as well as from Ms Murphy herself, the commercial division of the High Court was told

The auction will take place on March 11 next and the court will then decide who is entitled to the proceeds of sale.

Earlier this month, in an unrelated case, the Law Society failed in its bid to have two solicitors accused of overcharging scores of accident victims, through a "sophisticated" fees scam, struck off.

The lawyers -- Sean Acton and Michael McDarby -- who have a large personal injuries' practice in Co Mayo, avoided being struck off, despite repeated pleas by the Law Society that they were not fit to practise after "driving a horse and cart" through solicitors' regulations.

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