Branch managers had to be watchdogs rather than bloodhounds in their supervision of non-resident accounts, a former chief executive of Bank of Ireland told the DIRT inquiry.
Mr Pat Molloy, who was chief executive from 1991 to 1998, said a manager did not have to seek evidence and look for verification from depositors on their non-resident status. But if a manager had reason to disbelieve the authenticity of the depositor's claim, then he could not accept it.
"I suppose, to use some other terminology, he was a watchdog, not a bloodhound, in that respect," he said.
But Mr Molloy added that "a very clever conspiracy" had occurred in some cases between a manager and a customer. "The documentation would look perfect, there would not be any indicators of non-residency available to the internal auditor, for which reason, I would have to say, you can never put your hand on your heart and say we have caught every one of them."
Although he found it astonishing that a manager would go along with the conspiracy, it had occurred. He found it even more difficult to understand why customers, whose real concern was to keep funds away from the notice of Revenue, would do it.
"I find it hard to understand why a tax evader would take the risk, because there is a risk, one way or the other, in this process." Asked about disciplinary action taken against staff who had colluded in the opening of bogus non-resident accounts, he said there were nine cases of branches with significant bogus account problems.
In Claremorris, where a problem was identified in 1988 and again in 1993, the manager had taken early retirement.
He said in Roscrea, which "had a lot of publicity", the manager was fined £2,500. In Miltown Malbay, two staff members were involved.
One was fined £12,500, and the other had his salary frozen for two years. The one who was fined £12,500 had moved on to become a regional manager before the problem was identified, and he remained in that position.
"Now, with hindsight, one would have to question whether that was appropriate but that was what happened," Mr Molloy said.
In Boyle, Co Roscommon, where about 40 resident customers were identified as having bogus accounts in 1987, no disciplinary action was take. But the manager got a poor rating for the branch's overall performance.
In Dundalk, the manager had lost his annual merit increase for that year, in Killester, the manager departed, and in Tullamore, the manager had his salary frozen for a year. "He was put on probation for 12 months and there were other disciplinary notices issued." In Ballaghaderreen, the manager and the assistant manager had departed, and in Ballygar, the manager had departed.
Of the estimated £1.3 million liability estimated by the bank for DIRT arrears, about £250,000 related to bogus accounts. His understanding was the balance was for accounts "for which there were no declarations". The bank had provided for £2.8 million in its accounts, which includes interest payments.
Mr Molloy was also asked about what Mr Mitchell described as "an amnesty of sorts", from the Revenue Commissioners. This related to the non-prosecution of bank officials in two known cases - Roscrea and Miltown Malbay.
The Revenue Commissioners twice deferred the introduction of a prosecution policy, from May 1988 to September 1990, and then to July 1991, although the Miltown Malbay investigation by Revenue occurred in late 1991.
Mr Molloy said that from the bank's point of view, it preferred to avoid a prosecution and the publicity it would generate. He had certainly been aware "of the broad shape" of the resolution in Miltown Malbay, "which was intensely embarrassing. "It was an appalling situation," he said.