Category: Archive

Court inspectors identify 190 with links to Ansbacher

February 16, 2011

By Staff Reporter

By Andrew Bushe

DUBLIN – The Ansbacher (Cayman) banking system was a deliberately complex and secretive scheme that was unlicensed and conducted its affairs with the intention of defrauding the taxman, according to the report of High Court inspectors.

The inspectors last week named 190 people and companies connected with Ansbacher but limited themselves to findings that “there is evidence tending to show” offenses had been committed.

They believe there are three other clients whom they haven’t been able to identify.

Tanaiste Mary Harney, who said the report offered a “damning insight into a world of conspiracy, fraud and tax evasion,” suggested that similar schemes are likely in operation.

“Clearly there must have been other schemes as well and I would hope that the revenue and other authorities would have the capacity to be able to find those other schemes,” she said.

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The release Saturday of the 10,000-page report caps a three-year probe of a tax-dodging scheme that involved a number of Ireland’s wealthiest and politically connected residents and stretched over 25 years. It was devised by the late Des Traynor, an accountant and financial advisor to former Taoiseach Charles Haughey, who himself has also been implicated. The existence of the Ansbacher accounts came to light only in 1997 when a tribunal investigating payments from department store magnate Ben Dunne to Haughey uncovered the irregularities. It has been revealed that hundreds of millions of pounds were lodged with the supposed offshore bank that Traynor established and operated.

The inspectors said it was their duty to ensure that anyone identified is not categorized as an offender as a result of their investigation but is “accorded the presumption of innocence” to which everyone is entitled.

However, half those interviewed “readily admitted that they had availed of Ansbacher’s services for the purposes of evading their tax liabilities in Ireland or elsewhere.”

Furthermore, the inspectors did not discover a single case where contemporaneous tax returns were made in respect of Ansbacher clients.

The inspectors warn, however, that they “foresee some difficulty” in bringing prosecutions.

Many of the accounts date back decades, key figures have died, a lot of paperwork and computer records were destroyed and the Cayman Island bank is refusing to hand over all records.

The Dail is to be recalled to discuss the findings this week and the report has received huge media coverage with specially scheduled RTE radio and television programs discussing the findings.

In general terms, the report is damning.

The inspectors conclude Ansbacher set up “sham trusts” to facilitate widespread tax evasion, may have been guilty of a series of criminal offenses and breached company, exchange control and taxation laws.

The inspectors did not try to give an overall estimate of the amount of money that passed through the accounts.

The amount deposited peaked at _204 sterling million (euro 533 million in current value) in September 1984 and involved 462 Irish and foreign depositors. About 20 percent of the deposits were Irish.

Over the 25-year period of the accounts, from 1971 until the mid-’90s, it is estimated that well over euro 100 million in Irish client money was involved, “even possibly a multiple of this.”

A 1992 file note from a lawyer describes the scheme drawn up by Traynor as “extremely convoluted in the best tradition of Irish Gnomes.”

The lawyer is satisfied that what was going on was extremely bad banking practice. He thought that “any banking regulator would throw a fit if he knew about it,” he said.

The report, which has taken three years to complete and cost euro 3.2 million, names people living in Ireland, Northern Ireland, Britain, the U.S., Spain, France, South Africa and Australia. Many of those named are dead.

The so-called golden circle of names include Haughey, two former TDs, company chief executives and directors, bosses of state companies, accountants, bankers, solicitors, builders and developers, doctors, people in involved in bloodstock breeding and racing and even a primary school teacher.

The uses of the scheme ranged from simply hiding hot money to laundering drug cash.

The report tells how Traynor held dinner parties at the Howth restaurant of Johnny and Eileen Oppermann and, instead of paying the bill, lodged the amount into their Ansbacher account.

The Central Bank is strongly criticized. Its failure to test, appraise and gather the information available to it resulted in Ansbacher continuing undetected.

The Bank’s lead auditor in 1976 was suspicious and told the inspectors something “just didn’t smell right . . . it didn’t taste right. There was something wrong.”

In 1978, a list of loans and deposits in the Caymans provided to the Central Bank showed Ken O’Reilly-Hyland had both.

O’Reilly-Hyland was at that time a director of the Central Bank. “There is considerable uncertainty as to what if any steps were taken upon receipt of this information,” the inspectors say.

One of the biggest companies, the building materials group CRH, is also criticised and the inspectors said it must bear some responsibility for Ansbacher continuing from 1989-’94.

Traynor was chairman of CRH and ran his illegal bank from the CRH headquarters. The inspectors said seven other CRH directors were Ansbacher clients.

The report also criticizes a number of other leading banks and names six people they recommend should be considered for disqualification as directors because of their failure to cooperate.

It says the same consideration for disqualification should be given for individual board members of Guinness Mahon & Co. Ltd., London and Investec Bank (UK) Ltd.

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