Gardai working with the new Office of Corporate Enforcement will have the power to arrest, detain and question people suspected of serious corporate fraud, the Attorney General, Mr Michael McDowell SC, said yesterday.
Legislation creating the office may be passed by the end of the year and will allow for imprisonment for "five years and upwards" of persons found guilty of serious offences. Arrest and detention of suspects will occur under the provisions of the Criminal Justice Act 1984.
The era where "serious fraudsters" can tell investigating gardai to contact their solicitors "is over and going to end with a bang", Mr McDowell said. Arrangements were being put in place so that the new regime, once passed into law, would "hit the ground running", he said.
The Government has decided it will advertise for a provisional director of corporate enforcement as soon as the legislation is published so that the office will be "fully functional when the legislation is signed into law".
Mr McDowell, at a luncheon held in Dublin by the Institute of Certified Accountants in Ireland, said public funds would be spent by the director to pursue fraudsters who walked away from companies which had been stripped of their assets.
At present creditors affected by fraud frequently choose not to spend their own funds pursuing the perpetrators.
The Office of Corporate Enforcement will be staffed by lawyers, accountants, professional administrators and gardai and will be able to receive information from and convey information to the Criminal Assets Bureau (CAB), the Revenue Commissioners and the Central Bank.
It will aim to detect and prosecute corporate fraud and like the CAB will be able to use "whatever remedies are available" to deal with corporate fraud.
The office will have extensive powers to enforce the law by way of civil injunctions as well as criminal sanctions. "I expect the injunction jurisdiction which will be conferred on the High Court and enforced by the new director will do for company law what Section 27 of the Local Government (Planning and Development) Act 1976 did for enforcement of planning laws." Experience indicated that many people were willing to risk summary prosecutions for minor offences in cases where they would "not be willing to risk coming out at the wrong end of a High Court injunctive proceeding with the legal costs involved".
The office will also provide for on-the-spot fines for minor offences currently consuming court and prosecution time and resources. Persons wishing to dispute a fine will be able to take a case to the District Court.
The Attorney General said a Company Law Review Group, also to be established by the legislation, was already operating on a "shadow" basis and determining its work programme and priorities.
He said the new company law regime would take account of commercial realities and the needs of small business, and would have a "light-handed" approach. It would not be a Frankenstein, Mr McDowell said.
