When forensic accountant Gerard Murray peered into the finances of rogue Donegal waste collector and serial polluter Jim Ferry, he did not see wonderful things.
Unlike Howard Carter’s excavations casting light into Tutankhamen’s tomb for the first time in more than 3,000 years, in Ferry’s accounts Murray saw only an opaque miasma of fraudulent behaviour, a determined pattern of charging customers for a waste disposal service out of which they were cheated.
Worse than that, to date the ratepayers of Donegal have also had to foot a clean-up bill of close to €800,000. And that’s only the beginning.
Ferry – cause of this mess, financial and literal – has pocketed more than €300,000, based on an analysis of just one year of his lengthy waste collection and illegal dumping operations.
On March 26th, the High Court in Dublin met for the 14th time to consider the matter of Donegal County Council v James Ferry and his two companies, Ferry's Refuse Collection Limited and Ferrys Refuse Recycling Limited.
Agencies were closing in on Ferry in an operation that would yield valuable evidence
Leaving aside Ferry's earlier convictions for illegal dumping and breaches of waste licences, the current High Court case goes back to November 2016 when inspectors from Donegal County Council and the Waste Enforcement Regional Lead Authority for Connacht/Ulster (Werla) raided an 11-acre site at Rossbracken, Co Donegal.
Rossbracken is on the shore of Lough Swilly, a few kilometres east of Letterkenny, part of the Wild Atlantic Way and a special area of conservation because of its natural beauty.
The property was owned by Ferry and was supposed to be used by him as a place to separate household waste for recycling, or onward transport to authorised landfill sites. Instead, he kept much of the waste, burying it secretly on site or storing it in sheds, keeping for himself also the fees that would otherwise have had to be paid for the landfill.
Buried refuse
An examination of Rossbracken suggested that up to 36,000 tons of waste was buried there, representing a “saving” of up to €5.8 million. This is the amount it would have cost to dispose of it legally.
In the face of a determined search for answers by the local authority, Ferry prevaricated, eventually going on the run in Northern Ireland after a bench warrant for his arrest had been issued.
In July 2018, he came to heel, offering apologies to the High Court and promising to co-operate, thereby avoiding jail. But the question remained: where was the money that he had been paid to dispose of the waste legally?
His answer was that there was no money. His explanation was that when waste collecting moved from a flat fee to a weight-based system, before his lorries could be fitted with a weighing system, he had lifted loads far in excess of for what he was being paid.
Murray’s task, simply put, was to scour Ferry’s books for any objective evidence to support his assertions, comparing waste collection and cash flow records to see if they tallied.
Murray is a Derry-based graduate of Trinity College Dublin, a Master of forensic accounting, in which subject he has lectured at third level, and is also a member of the Academy of Experts. His reports on what he found formed the core of proceedings before Mr Justice Max Barrett.
In probing the relationship between what Ferry said he collected and what he was paid, and his various other financial dealings, including cash flow, tax and VAT returns, Murray attempted to reconcile the figures. But one phrase repeats in the report after he explains how he wrote to Ferry’s solicitor seeking clarification. “I received no reply to this request,” he writes.
Neither was Ferry forthcoming on his stable of racehorses (one named The Informer) and their winnings, or about specific lodgments to various bank accounts.
Murray concluded that Ferry had not co-operated with his inquiries as he promised the High Court he would. And he had not shown evidence supporting his claim that he did not profit from his illegal dumping.
Meanwhile, other agencies were closing in on Ferry in an operation that would yield valuable evidence. By early September, the Garda had raided Ferry-connected properties, seizing cash and documents.
In January, Murray filed the first of two supplementary reports. The first dealt with horses – Ferry insisting that his ownership of them “had no connection whatsoever” with his refuse business – and bank accounts, some in Ireland, some in the UK.
Murray concluded that Ferry was still not co-operating fully.
“For the year ended December 31st, 2015,” Murray said in a third report, dated February 27th, 2019, “I found two sets of Collins Cathedral Analysis Books, written up for the entire year.”
Record keeping
The discrepancy between the two sets of accounts – one for the Revenue, the other for Ferry himself – was €313,543.
"In my experience," wrote Murray, "the keeping of two sets of cash books is for the purpose of attempting to hide or disguise certain financial transactions from outsiders by having a set of fraudulent accounting records (or 'books') for official use and another, the real set, for personal records.
"I conclude that the only explanation for the keeping of two sets of books was what is termed sales skimming, which is a form of fraud in which all sales revenue is not recorded, to deflate the taxable income of the business.
“ There is clear evidence of the company [Ferry’s Refuse Recycling Limited] being paid for waste collection and the company then ‘stashing that extra money away’.”
Ferry has told the local Tirconaill Tribune newspaper he is planning to run in the forthcoming local election
Murray’s findings were based on just one year of Ferry’s long history of waste collecting in Donegal and illegal dumping.
“It is not unreasonable to conclude,” he wrote, “that the practice of keeping two sets of books prevailed in the years prior to 2015”.
That claim had Ferry’s barrister, Éanna Mulloy, on his feet in the High Court, doubling down on his application for an adjournment. “Fair procedure”, he argued, meant that his client should be able to examine the same material looked at by Murray.
Jailing Ferry for contempt was a "serious and grave matter", said Mr Mulloy.
This was not a matter of urgent public interest because it was only about pursuing a money trail, he argued.
Legal argument
“Be assured, judge,” said Mr Mulloy, “that in relation to an examination of any expert evidence that is being put forward, that this will be no Alice in Wonderland effort and that it will be focused on the issues, giving due weight to the cogency of certain remarks and observations that have been made by Mr Murray.
“If Mr Ferry is being lodged in Mountjoy jail, it is only right and proper that he knows for precisely what inaccuracies, or what errors, or what omissions.”
Mr Justice Barrett agreed and adjourned proceedings. By then, Ferry, who was in court, will have been able to have his own expert look at his records, including the twin set of accounts, waste collection and banking details, all of which he created himself, and take a view as to whether Murray’s interpretation of them is correct.
And then it will be back to the High Court once more on June 26th – the 15th time it will come before Mr Justice Barrett.
In the meantime, Ferry has told the local Tirconaill Tribune newspaper he is planning to run in the forthcoming local elections. He said he had tried many things in life and had always been interested in politics.
