A Dublin advertising company director who failed to pay up to €58,000 in VAT owed to Revenue has been sentenced to two years in prison with the final 18 months suspended.

John McMahon (59), of South Park, Foxrock, Dublin pleaded guilty to five counts of failing to remit VAT to the collector general and four counts of failing to furnish a true and correct return for VAT payable to Revenue between January 2006 and December 2010. The pleas were entered on a sample basis.

Sentencing McMahon in Dublin Circuit Criminal Court on Tuesday, Judge Martin Nolan said McMahon was a good member of society and a hard working man who was under severe financial pressure at the time.

Defrauding Revenue

He said it was a serious matter to defraud Revenue and was a crime that was difficult to detect at times.

“A deterrent must be sent out not to defraud the Revenue,” he said before he added that he believed that McMahon deserved an immediate custodial sentence.

Tax inspector Martha Dunleavy told Anne Rowland BL, prosecuting, that McMahon set up Rain Communications with a co-director in January 2005. The advertising company went into liquidation in March 2012.

Between 2006 and 2010, McMahon failed to remit between €57,000 and €58,000 in VAT that he owed to Revenue, the court heard. During that time, his co-director paid the VAT that he owed.

Liquidation

Defence barrister John Gallagher, BL, told the court that McMahon "poured" his own money into Rain Communications when it was struggling in the run up to liquidation. He said his client did not receive a salary between 2010 and 2012 and that he put €140,000 of his own capital into the struggling business.

“Although Mr McMahon has accepted his guilt, he was at the same time pouring his own money into the business which allowed that company to pay all its creditors, including Revenue,” Mr Gallagher said.

As a result, Rain Communications did not go into liquidation as soon as it might have and its creditors and employees were looked after, the court heard.

McMahon still owes the bank about €239,000 in personal liability loans, counsel said.

“His involvement in this company has left him financially depleted,” Mr Gallagher said.

McMahon had no previous convictions, was a person with an “unblemished” record and he had a wife and two adult children who were still dependent on him. He has recently returned to work and his current tax affairs are in order.