By Andrew Bushe
DUBLIN — After a three-year probe into the secretive Ansbacher tax-dodging scheme for the super-rich, the High Court has given the go-ahead for the publication of a report that names about 200 people involved on July 2.
The disclosure of the details of the sophisticated scheme that operated from the early 1970s could have severe personal and financial implications for the high-profile people involved.
The report will be considered for criminal charges by the director of public prosecutions and those involved will face inquiries from tax authorities, not only in Ireland but also, possibly, in the U.S. and Britain.
Irish Revenue Commissioners’ chairman Frank Daly warned there will be “no hiding place in future” for people who try to evade tax.
Newly strengthened audit and prosecution divisions underlined “Revenue’s determination to pursue evasion and non-compliance in all their forms,” he said at the launch of the Commission’s annual report on June 25.
Never miss an issue of The Irish Echo
Subscribe to one of our great value packages.
The existence of the Ansbacher accounts emerged in 1997 during the Judge Brian McCracken-headed Tribunal that investigated payments from former department store boss Ben Dunne to disgraced former Taoiseach Charles Haughey.
McCracken described the accounts as a “very ingenious system.”
Hundreds of millions of pounds are believed to have been lodged with the supposed offshore bank that was established and operated by former Haughey financial adviser Des Traynor.
Initially, Tanaiste Mary Harney ordered Gerard Ryan, an authorized officer, to investigate Ansbacher. In 1999, he handed over an unpublished report and the High Court-appointed inspectors to carry out a probe.
Traynor, an accountant, ran the scheme as a virtual private bank and concealed the identities of his well-connected account holders by secret codes on special password-protected computer software and off-ledger accounting records.
His clandestine made-to-measure credit union for the super-rich involved not only tax evasion, but the offshore accounts may also have involved breaches of the company legislation and currency exchange regulations.
The money was hidden offshore from the Revenue in Ansbacher (Cayman). In practice, the money never really left the country for the secretive banking haven of the Cayman Islands. Clients could draw on unidentified funds deposited by Traynor in Irish banks.
He also provided so-called “back-to-back” loans on which clients could claim tax relief. The tax-avoiding money held “offshore” was used to guarantee the loans involved — with the result that the Revenue Commissioners suffered a double hit.
If the money was “hot” black economy cash in the first place — untaxed before it was deposited in the scheme — the taxman was suffering a triple whammy.
In its 2001 report, the Revenue Commissioners said investigations into the Ansbacher accounts have yielded euro 17.252 million in tax to date.
Altogether, intensified investigations into a series of tax-evasion frauds and scams has yielded an extra euro 855 million in tax, making 2001 a record year with over euro 28 billion of tax collected.
The yield from the bogus non-resident DIRT tax accounts has so far brought in euro 227 million from 3,675 people in addition to euro 220 million previously collected from financial institutions.
The National Irish Bank tax evasion scheme has so far yielded over euro 37 million. Seven cases are with the new Revenue prosecution section for consideration for possible criminal prosecution.