A manager in Allied Irish Banks told the High Court yesterday there were bogus non-resident accounts in all of the four branches of the bank he had worked in. Mr Peter Silke said it was "not an area I would be comfortable with".
Asked if it was reasonable to assume bogus non-resident accounts existed in all AIB branches, Mr Silke, who is manager of AIB's branch at Cashel, Co Tipperary, said it was possible but he did not know if it was likely.
Mr Silke was being cross-examined in the continuing action by Mr Michael Gayson, a farmer from Cashel, who is suing AIB for damages for alleged bad advice to him not to avail of the 1988 tax amnesty in relation to a non-resident "trust" account held by him over a 30-year period. Mr Gayson claims the alleged bad advice led to his paying substantially more to the Revenue than he would have had to pay had he availed of the amnesty.
AIB denies the claims and alternatively pleads that a person guilty of illegality should not benefit from his wrongdoing. Ms Norrie O'Sullivan, assistant manager at AIB's Cashel branch, has denied she advised Mr Gayson in 1988 not to avail of the amnesty.
In submissions, Mr Patrick Keane SC, for Mr Gayson, suggested that Ms O'Sullivan advised him not to avail of the amnesty because it "would bring down the whole house of cards on the bank". He argued it "was a self-serving piece of advice given by the bank".
Earlier, Mr Silke told Mr Keane he was unaware of any duty to tell the Revenue that the bank held a non-resident account in the name of Mr Gayson. Mr Keane suggested that Mr Silke knew the operation of Mr Gayson's account was "off the rails" and the less known about it the better. Mr Silke said that was not the case: he was asked to dig out documents regarding the account and did the best he could.
After further exchanges between Mr Silke and Mr Keane, Mr Justice Geoghegan said there was no doubt that AIB was involved in methods that involved tax evasion through holding bogus non-resident accounts. The judge said the issue in the case was whether Mr Gayson knew about this.
Mr Keane referred to a letter from a tax inspector to AIB group taxation and asked Mr Silke if he was aware the Revenue was suggesting that Mr Denis Murphy, a former manager of the Cashel branch, and Ms O'Sullivan had played an active part in ensuring Mr Gasyon did not make full disclosure. Mr Silke said he was not.
Mr Keane said the letter asked AIB to make inquiries as to whether there were other bogus non-resident accounts in the Cashel branch. Mr Silke said he never saw that letter. Mr Keane asked if it was reasonable to assume those inquiries were not carried out because they would have disclosed there were a lot of similar cases in Cashel.
Mr Silke agreed there were "a number of cases".
Mr Silke said he had received advice from the bank not to give Mr Gayson a letter stating the funds in his account were for his children. Mr Keane suggested there was no logic in Mr Gayson seeking such a letter except to explain to the Revenue that the bank had agreed not to deduct DIRT from the account.
Mr Silke said he had no knowledge of the account being for Mr Gayson's children. He assumed the letter sought by Mr Gayson was for the Revenue but did not know for what purpose. The hearing continues today.
