A High Court judge has said there appears to be little doubt a fraud was perpetrated by a barrister who, while acting as tax consultant to a company, received large sums to be paid to the Revenue to settle tax liabilities but the Revenue never received those monies.
Mr Justice Peter Kelly yesterday said the claims by the REL Refrigeration Group regarding Patrick Russell, a barrister said to have recently resigned from the Bar, of Steelstown, Rathcoole, Co Dublin, also operating as a tax consultant from Westfield House, Mullingar, Co Westmeath, should be made known to the Garda National Bureau of Fraud Investigation.
Mr Justice Kelly said Revenue should also be made aware of claims that Mr Russell had, during a consultation with an REL director, put that director on to the phone to a person Mr Russell stated was a Revenue official in Dublin but who the company later learned was allegedly an impersonator.
Matters in the affidavits sworn on behalf of REL should also be made known to the director of corporate enforcement, he added.
The judge agreed "with reservations" to appoint an examiner to the REL Refrigeration Group Ltd and Refrigeration Engineering Ltd, Hebron Industrial Estate, Kilkenny. Earlier this week, on the application of the Revenue, the High Court had made an order winding up Ardline Aircon Ltd, a company within the REL group, which had ceased to trade earlier this year.
Previously Ardline had secured an interim High Court order freezing some €685,000 in assets of Mr Russell. It was alleged that Mr Russell had produced bogus receipts showing that money owed by Ardline to the Revenue had been paid.
David Hardiman SC, for the REL companies, said both an independent accountant and the interim examiner believed the companies had a reasonable prospect of survival. Trading had exceeded estimates and there had been no flight of customers.
The application for examinership was opposed by Mark O'Mahoney, for the Revenue, which is owed €1.2 million by the REL group and €676,000 by the engineering company. While the court had to have some sympathy if the claims about Mr Russell were true, which indicated the companies were the victims of "an unscrupulous adviser", this was not a small family business in the west of Ireland but a substantial business.
Mr Justice Kelly said he would, with reservations, continue court protection for both companies. He had appointed Martin Ferris as interim examiner to the companies on December 3rd and yesterday he appointed Mr Ferris as examiner and returned the matter to January 15th.
There were a number of "very disquieting features" about this case, he said. The companies had allowed tax liabilities to accrue, had failed to keep management accounts and the directors had no experience of bookkeeping. The group had a €10 million turnover but was managed in an inept way.
When the companies got into difficulties with the Revenue, they had engaged in opaque circumstances the services of a barrister, Mr Russell, who held himself out as an expert on tax affairs with negotiating experience with the Revenue.
The company had claimed it had given Mr Russell substantial monies to be passed to the Revenue and for professional fees. It said it had no reason to suspect misconduct on Mr Russell's part.
