INDEPENDENT TD MICHAEL Lowry and his refrigeration company have been convicted of two charges of delivering an incorrect corporation tax return and failing to keep a proper set of accounts.
Lowlry and his company, Garuda Ltd, have been fined a total of €25,000.
The jury of three women and eight men returned the verdicts on day 12 of the trial at Dublin Circuit Criminal Court following just over eight and half hours deliberation.
The jury was unable to reach a decision on four remaining charges before them.
It was the State’s case that Garuda Ltd – trading as Streamline Enterprises – received £248,624 (€372,000) in commission from Norpe OY, a refrigeration firm based in Finland, in August 2002.
It was alleged that Lowry arranged for this payment to be made to a third-party, Kevin Phelan, through the Glebe Trust based in the Isle of Man and therefore it didn’t appear in the company accounts for that year.
It is further alleged that the accounts were then falsified in 2007 to reflect that the payment was received in 2006.
In his ruling, Judge Martin Nolan referred to Lowry as a “conscientious tax payer” having accepted evidence that he previously “put his hand in his pocket” to settle a separate €1.4 million tax bill dating back to 1997.
Judge Nolan accepted that the politician had no previous convictions, was a good employer and a very good public representative.
“The proof of the pudding is in the eating. He has been re-elected,” the judge said.
He noted that the maximum sentence available to the court was a five-year term but said he didn’t think a custodial sentence was appropriate in the case.
He fined Lowry €15,000 personally and Garuda €10,000. He also disqualified Lowry as acting as a director of the company for three years.
Last week, Judge Nolan told the jury that a charge of delivering an incorrect tax return for 2002 had been withdrawn.
Lowry of Holycross, Co Tipperary, had pleaded not guilty to four charges of filing incorrect tax returns on dates between August 2002 and August 2007 in relation to a sum of £248,624 received by his company, Garuda Ltd, and one charge in relation to failing to keep a proper set of accounts on dates between 28 August 2002 and 3 August 2007.
He further pleaded not guilty on behalf of Garuda Ltd to three similar charges in relation to the company’s tax affairs and one charge of failing to keep a proper set of accounts on the same dates.
The charges against Lowry outlined that the offences were committed with the consent or connivance of Michael Lowry who was at the time a director, manager, secretary or other officer of Garuda Ltd.
Both Lowry and Garuda were charged with knowingly or willingly delivering to the Inspector of Taxes of the Thurles District incorrect accounts in connection with corporation tax for year ending 31 December 2002 and delivering incorrect information in connection with the corporation tax for year ending 31 December 2002.
The politician and his company were also both charged with delivering an incorrect return in connection with corporation tax for year ending 31 December 2006 and that between 28 August 2002 and 3 August 2007, Garuda Ltd failed to keep proper books of accounts within the meaning of Section 202 of the Companies Act 1990 insofar as the said books did not correctly record and explain the transactions of the company.
The prosecution’s key witness, Henry Oliver, in the investigation unit of Revenue, told the jury that he had looked into the €372,000 payment in August 2013 and assessed it as an emolument (a wage or salary) earned by Lowry.
He said he determined Lowry owed income tax on the figure and Garuda owed PAYE and PRSI on the sum. He assessed the total owed to Revenue, including penalties and fine, as being €1.1 million.
Lowry’s defence team did not accept that the €372,000 constituted an income, but rather said the money was owed to the company as commission from Norpe.
The jury heard that both Michael Lowry and Garuda Ltd successfully challenged the Revenue assessment before the appeals commission in April 2015. The assessment was reduced to nil, meaning that neither Lowry nor Garuda owed anything to Revenue.
It was because of this evidence that Michael O’Higgins, defending, applied for a direction of not guilty by the trial judge on the basis that “there was no case to answer”.
The State didn’t oppose the application. Judge Nolan withdrew the charge and the trial continued with the remaining eight charges in connection to the corporation tax associated with the €372,000.
‘What Lowry knew’
Judge Nolan told the jury during his charge last Friday that the issue in this case was what Lowry knew.
He said the jury must be satisfied beyond a reasonable doubt that Lowry knew the money was not included in the company accounts and tax computations.
He said Lowry’s explanation was that he had instructed a staff member to raise an invoice in 2002, assumed this had been done and the money automatically entered on the company’s accounts.
The judge told the jurors that they must be satisfied beyond a reasonable doubt that this explanation is not true in order to convict. He said if they found the explanation reasonably believable, then they must acquit.
Written by Sonya McClean and posted on TheJournal.ie