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Give me Park Avenue — but not 406

February 16, 2011

By Staff Reporter

By Ray O’Hanlon

A branch of Allied Irish Banks in Tralee, Co. Kerry, provided a customer with a fictional Park Avenue address opposite the bank’s U.S. headquarters after he agreed to open a non-resident account, the Dublin-published Sunday Business Post has reported.

The customer, who lodged more than £40,000 in the bank’s Denny Street branch in 1988, has claimed he was invited to place his money in a non-resident account that was not subject to taxation on interest earned.

Irish citizens living overseas can hold bank accounts in Ireland that are not subject to such tax, Deposit Interest Retention or "DIRT" tax. However, the same accounts are subject to tax if the account holder is living in Ireland.

"AIB opened some 53,000 non-resident accounts in the 1980s — 14,000 in Tralee alone — but it has never admitted that it supplied addresses offshore for any of its customers," the Business Post’s front-page report stated.

According to the report, the customer, a Tralee businessman, inquired some years later at the bank about certain transactions in his account. He discovered that the account was held in his name at 406 Park Ave., New York, N.Y.

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"Investigations by The Sunday Business Post found that there is no such address in New York," the report added.

The report continued: "However, the AIB headquarters in New York is at 405 Park Ave., directly across the road from the block of buildings numbered 410 Park Ave. There is no building on Park Avenue with the number 406. Nor is there a building on Park Avenue South, New York, which is some distance from Park Avenue, with the number 406.

"According to the customer, he never had an address in New York and had never been in or heard of 406 Park Ave.. In fact, he had never been in New York or the U.S.

"I’ve never been there and no one there belongs to me. I opened an account in the 1980s and was given the impression that I could avoid tax. They provided the address in New York for that purpose," said the customer, who did not wish to be named.

The report stated that the customer said he had been with the Tralee bank for 30 years, but three years ago he discovered that an account containing £5,000 could not be traced by the bank.

"They finally traced the money early this year to New York, after two and a half years of searching," the customer said. "I had the impression that the reason for them opening the account in New York was to avoid tax.”

The Sunday Business Post said it had obtained details of the account. Some documents indicated that DIRT tax was deducted in 1992 from the New York account. The paper said that after 1991, the bank decided to clean up its non-resident accounts and started paying tax on the customer’s behalf at this time.

It claims that in recent weeks a senior bank official confirmed that the customer was receiving "gross interest” before 1991. The official, the paper claims, also said that if the bank’s 14,000 non-resident account holders had not availed of the Irish government’s tax amnesty, they would suffer the consequences.

"He is one of 14,000 and will suffer as much as the bank if that comes out," said the official, who refused to comment on the case to The Sunday Business Post.

The paper reported the former manager of the Denny Street branch in Tralee as confirming that he dealt with the customer. But the manager refused to discuss the details of an individual account holder. An official at the branch referred queries to AIB headquarters in Ballsbridge, Dublin.

Some months ago, according to the Business Post, it was disclosed that AIB, Ireland’s largest banking group, had 14,000 non-resident account holders in Tralee alone, a town with fewer than 20,000 residents.

The Dáil committee on public accounts is investigating a conflict between AIB and the Revenue Commissioners over whether more than 53,000 non-resident accounts were liable for DIRT tax.

A spokeswoman at AIB headquarters told the Business Post that the individual was an account holder at the bank but said that she could not make any comment on the grounds of customer confidentiality. Asked was it bank policy to provide addresses for non-resident account holders, AIB issued a statement stating: "AIB is continuing to cooperate fully with the Public Accounts Committee and the Revenue on this matter and it is not, therefore, appropriate to make any further public comment at this stage."

The spokeswoman told the Business Post that it was "public knowledge" that the bank’s U.S. headquarters were at 405 Park Ave. but refused to comment on how the customer’s account came to be held at a fictitious address on the same street.

Last week, according to the report, Taoiseach Bertie Ahern told the Dáil that legislation setting out the powers of the Dáil Committee on Public Accounts to investigate the role of statutory agencies and financial institutions in relation to non-resident accounts will be completed shortly.

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