Suspended sentence for Cork accountant who claimed tax repayments he was not entitled to

An accountant and former partner with Deloitte in Cork was given a two-year suspended sentence, fines of €10,000 and 240 hours of community service on Tuesday for claiming repayments of income tax and VAT to which he was not entitled.

Brian Murphy, who previously resided at Abbey View, Ballea Road, Carrigaline, County Cork, was sentenced by Judge Colin Daly at Cork Circuit Criminal Court. 

He previously pleaded guilty to sample counts on the indictment.

Judge Daly said by making false returns to Revenue, the accused man obtained a €54,600 repayment in respect of VAT and left an income tax liability across the years 2008 to 2012 to a total of €456,000.

“He had a knowledge of finance and tax. He simply should have known better. They (the offences) were to support his family. It happened to many families at that time but they did not turn to fraudulent activities. He consciously engaged in this for his own and his family’s gain.

“He comes before the court with previous good character and contributes positively to his community, particularly his religious community and his charitable works over a long period of time. He is not likely to come to attention again. These offences are of some vintage - 12 to 13 years old,” Judge Daly said.

Enquiries

Mr Ger Cosgrave Assistant Principle of the Revenue Commissioners said the matter came to light when a request for payment by Mr Murphy did not exist on the records of Deloitte.

“As a result of those enquiries, an investigation and prosecution was commenced and two search warrants were obtained – for the premises of Deloitte on Lapp’s Quay, Cork, and another for his (Mr Murphy’s) residence. In the course of interview he made several admissions and was cooperative with the investigation. The sum of €54,600 was repaid in June 2013 by Mr Murphy with €10,000 interest (in respect of the VAT),” Mr Cosgrave testified.

The witness said in relation to an incorrect VAT return of €105,280, Brian Murphy obtained €54,600, and incorrect forms were filled out to substantiate that.

Mr Cosgrave said that between 2008 and 2012 there was an undeclared amount of income of €742,000 and a further investigation commenced. 

The Revenue witness said to Jane Hyland, prosecution senior counsel, “Income declared by each of the Deloitte partners was examined. It was only in Mr Murphy’s case that there was a discrepancy. (Following correspondence from Mr Murphy to Revenue about his income being reduced) “it resulted in a refund of €68,000 in 2008 – a refund for which he was not entitled, it was concluded that he provided incorrect information on his income from Deloitte in 2008.

“Ultimately, in terms of his tax liability, the total additional income tax liability was €456,000. Interest of €126,000 and penalties of €342,000 resulted in a total of over €924,00. Mr Murphy has made payments of €456,000. But interest and penalties remain. €468,000 is outstanding.” 

'Fairly ham-fisted'

Remy Farrell defence senior counsel handed in testimonials on the accused provided by a number of parties saying to the judge, “Hopefully, you will be struck by the fact that he not only participated but is deeply embedded in public and charitable work – it has been part of Mr Murphy’s life for quite a considerable period of time.

“One comes across accused people dipping into the till to fund a lifestyle – that is not what one sees in this case. He is someone who should have known better but as a result of pressures he engaged in conduct for a very significant purpose.

“All of the tax has been repaid. The VAT was repaid in 2013 along with penalties. The entirety of the income tax has been repaid. The interest and penalties remain. (He has arranged to repay these over the next seven years).

“The scheme does not appear to have been well thought out. He was making returns that were not very coherent. It was advantageous to him in the short term. It was in contradiction with what the same firm were making to Revenue. On the question of how this could have been a long-term proposition it had the appearance of someone trying to get in money when there was very real and excruciating financial pressure.

“This was fairly ham-fisted and ultimately was always something that was going to come back and bite Mr Murphy. He apologises and accepts responsibility for it.” 

Mr Farrell commented on a company called Securemed Ltd and said, “Mr Murphy put €80,000 or so into it. It was to operate as a recruitment business. It never really took off. He put an awful lot of money into that company, with very little hope of recovering it – that forms the background.”