A MAN has been sentenced to six years in jail for his role in what the judge described as “a well-organised and well-planned” VAT scam.
At Ennis Circuit Court yesterday, Judge Ray Fulham jailed Derek Floyd (33), a sub-contractor, Lower Main Street, Tulla, Co Clare, for six years with the final year suspended after a jury convicted Floyd of a €680,000 VAT fraud between January 2001 and October 2003.
The 10-day trial in March heard that Floyd generated false invoices totalling €10.1 million that allowed him to seek fraudulent VAT repayments of more than €680,000 from the Revenue.
Floyd was remanded on bail to yesterday’s sentencing hearing.
Retired Revenue official Michael Downey said yesterday an estimated €15 million went through Floyd’s bank account between July 2001 and June 2004, with almost €7 million lost to the State through VAT payments of €1.6 million and €5.25 million in relevant contracts tax.
Mr Downey said Floyd was not the scam’s main mover, but “this fraud could not have been undertaken without Mr Floyd”.
He added: “Mr Floyd agreed to participate in the regime for financial gain and he did advise on how the financial scheme would work.”
Mr Downey said Floyd claimed VAT refunds of €683,138 and received refunds from the State of €415,536. Floyd’s fee to the others involved for taking part in the scam was the VAT plus 10 per cent, he continued.
Mr Downey said he did not know who the originator of the fraud was. “I think it might be part of a wider fraud organised by certain political elements, but I have no evidence to sustain that.”
Alex Owens SC, prosecuting, said Floyd “cooked the books at both ends” to conceal the fraud.
Mr Downey said the prosecution took place “after a massive investigation” but no other person had been before the courts in relation to the fraud. One of the other participants was dead, “with another disappearing out of the jurisdiction”.
Anthony Sammon SC, for Floyd, said his client was the “fall guy for far more sinister elements who benefited from this scheme”. Others involved “knew where they were going, and that was out of the country with a big bag of swag”.
“It is quite plain that whilst Mr Floyd did profit from this,” Mr Sammon added, “he was evidentially exposed and probably always likely to be caught.”
He said the operation had taken place in the glory days of the Celtic Tiger, when Floyd was 22. Some of the contracts referred to in the case were prestigious large construction projects.
Judge Fulham said Floyd was a willing participant in a well-organised and planned VAT scam, with the fraud representing a significant economic loss to the State.
The maximum sentence allowed on the charges of which Floyd was found guilty is five years. Judge Fulham applied three-year terms in relation to two counts, to run consecutively, with the final year suspended.
