Gardai and the Revenue Commissioners are investigating a suspected fraud ring based in the north-west involving bogus company VAT claims.
According to a senior source from the Garda Bureau of Fraud Investigation the investigation centres on suspicions that a group of individuals is claiming VAT exemption on goods being sold in the State. Gardai also suspect VAT refunds have been claimed from the Revenue Commissioners on non-existent goods.
The investigation began after suspicions arose about one individual spending large amounts, including a sum of more than £1 million on property in the northwestern town. It is believed a number of companies may be involved. Some may be legitimate companies through which some of the fraudulent transactions are being channelled. At least one company is believed to be involved in the sale of computer parts.
According to the source the estimated cost of the fraud to the State could be more than £40 million. A special team of investigators from the GBFI working with Revenue officials has been appointed to investigate the allegations.
"Suspicions were raised when we received intelligence that all of a sudden wealth was appearing," a senior source said. When people started asking questions there were rumours the money had come from a Lotto win in Britain of more than £10 million.
The investigation, which began last month, is still in the early stages, the source said. It will look at the possibility that the scheme has been set up to launder money by paying bogus VAT amounts in cash and reclaiming the amounts from the Revenue Commissioners.
Last year the Revenue Commissioners' VAT receipts totalled more than £4.8 billion, an increase on almost £800 million on 1996. Excise duty payments totalled more than £2.5 billion during the same period.
