The Tanaiste, Ms Harney, is expected to forward a report on the sale of offshore investments by National Irish Bank to the Director of Public Prosecutions, indicating there is strong evidence the scheme was used to evade tax, which is a criminal offence.
The latest developments in the NIB saga come as Ms Harney indicated that her investigations into offshore bank accounts is demonstrating they were in extensive use and were a vehicle for some "very influential people" to evade their tax liabilities.
Ms Harney is understood to have received, last Thursday, an interim report by Mr Martin Cosgrove, an authorised officer she appointed to examine the sale of offshore investment bonds by NIB. The sales were mainly through an Isle of Man company, Clerical Medical International, and up to £33 million was invested by 200 accounts holders at one stage. The scheme allowed Irish residents to move money to the Isle of Man through purchasing an insurance-based product.
The expected referral of the report to the DPP, Mr Eamonn Barnes, indicates that Mr Cosgrove, who had full access to NIB records, has uncovered evidence that NIB depositors did use the bonds to evade tax. However, what is not clear is whether there is evidence to demonstrate the scheme was marketed in an organised way by NIB as a whole, or only by some of its executives, to bank customers to evade tax.
The bank recently conceded that in a "significant minority" of the cases it examined in its own internal investigation of the scheme, there were incomplete records, with an incorrect name being used on many accounts and full documentation not available for others.
In separate investigations, two High Court-appointed inspectors are investigating allegations of overcharging at NIB.
Ms Harney also indicated clearly yesterday that an investigation into the Ansbacher deposits had proved further evidence that wide-scale tax evasion was a primary motivation for the use of offshore bank accounts. Another authorised officer, Mr Gerard Ryan, is investigating the Ansbacher deposits, accounts held by Ansbacher (Cayman) in two Irish banks which allowed Irish residents to hold money in an offshore bank. Referring to both the Ansbacher and NIB investigations, Ms Harney said: "What has surprised and disturbed me is the extent of what we have now uncovered."
She told RTE that "some very influential people did not seem to believe that the tax laws were for them." It is believed that the depositors include a number of prominent business figures, property developers, and professionals.
The Tanaiste also clearly indicated that the investigation of the Ansbacher deposits has turned up evidence of other related offshore accounts which are now being investigated both by Mr Ryan and by the Moriarty Tribunal. It is believed that the scale and organisation of the accounts has surprised the investigators and led to the scope of their work being considerably widened, including close examination of loans that were extended on the basis of guarantees backed by money in the Ansbacher deposits.
