Following the discovery that two individuals utilised counterfeit procurement invoices to fraudulently recover €156,000 VAT from the Tax Authority, the High Court has mandated signs prohibiting the two men from serving as directors of any company. John Joe Dunne, aged 80 and Christopher Dunne, in his 70s, previously served as directors for Cranfield Plant Limited, a company that dealt with purchasing, leasing, and servicing of farm and industrial machinery. The company fell into liquidation in 2017 with an excess of liabilities over its assets valued at approximately €476,000.
The company, which was officially registered at Delahasey Farm in Naul, Co Dublin, was founded in 2012. This week, Thomas Musiol from Musiol Advisory, the liquidator of the company, obtained prohibitions preventing both men from taking up any secretarial or directorial roles in other companies for a set duration. John Joe Dunne, a retired farmer, has been disqualified for nine years while Christopher Dunne’s disqualification lasts seven years.
Mr Justice Michael Quinn declared the evidence presented by the liquidator as unchallenged and discovered “some substance” to John Joe Dunne’s assertion that Christopher Dunne was essentially a placeholder director. Accordingly, the verdict against him was rooted in relatively fewer findings. Both men did not dispute the issuance of disqualification mandates.
Paul Comiskey O’ Keefe, Christopher Dunne’s representative stated that his client played no part in the control or organisation of the company. Christopher Dunne, currently in his 70s and still an active farmer, has contributed €60,000 towards the liquidation as a token of remorse. Sally O’Neill, the liquidator’s attorney, reported to the court that due to the lack of prepared financial documents in both 2015 and 2016, there remains significant ambiguity concerning the assets and liabilities of the company.
According to Ms O’Neil, who was acting under the guidance of the law firm McErlean Weir, John Joe Dunne informed the liquidation unit that the firm’s documents were lost in a fire. However, there were no proof to corroborate his allegation.
Her client was obliged to recreate the commercial activity chronology of the firm by going through bank records and holding meetings with alleged debtors.
Mr. Musiol, in his legal declaration to the court, stated that his inquiries led him to believe that Cranfield Plant had created false invoices from three businesses to unlawfully lessen its VAT obligations, or in certain instances, position itself for a VAT reimbursement. He accused the Dunnes of manipulating the company to dishonestly assert approximately €156,000 VAT input credits from the Revenue department.
Through receipt analysis, he found out that the firm had paid nearly €50,000 less VAT than required and underrepresented its VAT obligations by approximately €170,000. He concluded that the company intentionally concealed its PAYE obligations by about €103,000, bringing its entire tax shortfall to €437,730.
In his statement, he mentioned that Cranfield continued its business operations for 49 months even after becoming insolvent.
Mr. Musiol accused the Dunnes of mismanagement, violating the board of directors’ responsibilities, and carrying out reckless and fraudulent business activities, as reported by the liquidator.