Court asked to impose lengthy period of disqualification on company director
The High Court has been asked to impose the longest disqualification period possible on a company director who has admitted his role in an alleged fraudulent scheme to avoid paying VAT on machinery worth €8m.
The application has been made in respect of Kevin Rabbitte who was the director of a company called Westman Plant and Civils Limited, which was put into liquidation in 2017.
The court heard that the firm’s VAT number was used to import the plant and machinery mainly from the UK, into Ireland between July 2014 and June 2015.
It is claimed that VAT due on the goods bought in the UK by Mr Rabbitte was not paid to Revenue when the machinery was subsequently sold on in Ireland.
The company allegedly never declared its purcahses or any subsequent sales for VAT purposes. The company filed nil VAT returns for the relevant period, it was claimed.
The application to disqualify Mr Rabbitte of Clonberne, Ballinasloe, Co Galway was sought by the company's liquidator Mr Myles Kirby. It was due to be heard before Mr Justice Brian O'Moore on Tuesday.
Mr Kirby claimed that arising out of his investigations Mr Rabbitte had knowingly participated in a fraud which is known as "carousel fraud" or Missing Trader Intra-Community VAT Fraud.
Mr Rabbitte, who claims he was asked on behalf of an unnamed individual, would turn up at machinery auctions in the UK. He would bid for the machinery and if successful he would used Westman's VAT number to acquire the goods.
The individual in question would then pay Mr Rabbitte a commission.
Westman, the court also heard, never filed any returns to the CRO and was eventually struck off he Register of Companies.
Before the application to have Mr Rabbitte disqualified John Kennedy SC for the liquidator told the court that "at the 11th hour" Mr Rabbitte, represented in court by solicitor Robert Dore, had consented to certain orders being made.
Mr Rabbitte consented to a declaration that as an officer of the company he carried out business on behalf of Westman with the alleged intention to defraud the firm's creditors, including the Revenue Commissioners.
He also consented to being made personally responsible for €1.5m of the company's debts and liabilities, and that he would be disqualified from acting as a company director for a period.
The length of the disqualification period is to be determined by the court.
'Petrified' of unnamed third party
Mr Kennedy appearing with Sally O'Neill Bl, said Mr Rabbitte action's were very serious and that the court should consider the longest period of disqualification possible.
Mr Dore asked the court that the period of disqualification be set in the low to medium range.
Both the proposed disqualification and by agreeing to be liable for up to €1.5m of the firm's debts were "draconian" matters that his client had agreed to , Mr Dore said.
Mr Dore added that his client had consented to certain orders, and thus had avoided the costs of a hearing that was expected to last several days.
Mr Dore agreed with the judge that it was Mr Rabbitte's case that his actions were on behalf of an unnamed third party for whom the machinery was bought and for which Mr Rabbitte was paid a commission.
The judge said that this third named party had not been named by Mr Rabbitte, and that he was "petrified" of him.
The Judge also said that Mr Rabbitte had said that he was approached by this unnamed individual who asked him to buy the machinery at auctions.
Following the conclusion of submissions from both parties Mr Justice O'Moore said he would give his ruling on the length of Mr Rabbitte's suspension later this week.
