Dunmore man gets 30-month suspended sentence for tax evasion

A DIRECTOR of nursing homes in Cummer and Claremorris tried to blame others for his failure to pay his rightful taxes, a Judge said when he sentenced him to two and half years for tax evasion. He suspended the sentence to allow the defendant pay back what he owes to the Revenue. James Maloney, from Chequer Hill, Dunmore, pleaded guilty at Galway Circuit Criminal Court to tax evasion, in that on May 1, 2008 he failed to make a payment of Capital Gains Tax arising from the voluntary liquidation of Chalmers Properties Ltd. in 2006. Revenue investigator Aidan Murphy gave evidence that Maloney was one of three directors of Chalmers Properties Ltd. which purchased development land in Ballymoate, Tuam.  The land was sold in 2006 at the height of the boom and after that the company went into liquidation with a net surplus of around €2.5 million. Mr Murphy said the accused, unlike the company's other two directors, had failed to pay Capital Gains Tax arising from the company's disposal.  A subsequent revenue audit confirmed that Maloney's interest in Chalmers Properties Ltd. had not been disclosed through his annual income tax returns and no efforts had been made to pay any Capital Gains Tax, estimated at €170,159 to Revenue. Mr Murphy said €854,000 had been given to the accused following the voluntary liquidation of the company.  He said that when he interviewed him in October, 2010, Maloney claimed he had intended placing the proceeds from the company into a trust but this had not happened and the money was gone.[private] The court heard that Maloney had since come to an arrangement with Revenue whereby he will repay all of the tax owed in monthly instalments over the next ten years. Mr Murphy explained that Maloney has since made payments totalling €89,515 against his tax liability of €170,159.  'It is estimated that interest of €84,831 arising from his 2006 Capital Gains Tax liability will be paid over the term of this arrangement,' Mr Murphy added. Defence barrister Michael O'Connor told Judge Gerard Griffin it would be wrong to imprison his client as he was the 'key man' in two nursing homes, one in Cummer, Tuam and the other in Claremorris, Co Mayo, which employed 110 people between them. He said Maloney had been advised to put the money in a trust bank account but had not done so.  He said his client had paid €42,000 in fees to his former firm of accountants for financial advice and was now taking a professional negligence action against them. Judge Griffin enquired if the accused had taken the advice and put the money in a trust fund would he be before the court. Mr Murphy said that if it had worked out and the money had been put in trust then no, the accused would not have been prosecuted.  'It's possible to put money for Capital Gains Tax on a trust basis, but as a trust had not been entered into, it didn't arise.  No trust was entered into and that is why we are here,' he said. Mr O'Connor said his client knew he had done a serious wrong and that the Irish taxpayers were the victims here.  He said Maloney was very involved in his local community and clubs and had no history of revenue convictions. 'This will be a very embarrassing situation for him and his wife and family, who are totally innocent,' Mr O'Connor said. The barrister explained that the money that should have been paid to Revenue had been used instead in an ongoing bitter 'partnership war' with another director of the nursing home in Cummer. 'There have been copious litigations, right up to the Supreme Court; a hugely aggressive set of litigations where my client and his wife were picking up the liabilities for the business while there were serious issues with another partner.  That is the context in which the money was going,' he said. Judge Griffin said Maloney sought to blame others for not paying his just taxes.  'He deliberately decided to take the risk and not pay his taxes and he was rightfully caught,' the judge said. The judge imposed a two and a half year sentence on Maloney but said he was suspending it so that he could continue to repay the full amount owed to Revenue and on condition he keep the peace and not reoffend for five years.   He warned Maloney that if he failed to keep up the repayments he would serve the entire sentence.[/private]