Prosecution case against Michael Lowry 'deeply flawed', jury hears

It is the State's case that Mr Lowry's company, Garuda Ltd, received Stg £248,624 (€372,000) in commission from Norpe OY, a refrigeration company based in Finland, in August 2002.

It is alleged that Mr Lowry arranged for this payment to be made to a third party, Kevin Phelan, residing in the Isle of Man, and therefore it didn't appear in the company accounts for that year.

It is further alleged that the accounts were then falsified in 2007 to reflect that the payment was received in 2006.

“You can read a lot of stuff telling you about Michael Lowry. The people of Tipperary are almost shamed for returning him election in and election out,” Michael O'Higgins SC, defending told the jury.

“There is no aura about Michael Lowry. No mystery about him topping the polls, he grafts,” he said referring to evidence from his political secretary, Aileen Dempsey, that he worked from 8am to midnight in his constituency.

He asked the jurors if they have “ever made a mistake in your life, the kind of mistake that comes under scrutiny” and immediately afterwards there is some “authority figure” investigating it.

“You are told your mistake is not just up for grabs but your motive too and you are told that you are under investigation,” counsel told the jury.

Mr O'Higgins said then because of “time pressures”, the charges were “simply laid against” his client and he suggested to the jury that in that situation they would feel very aggrieved.

“I am complaining about the investigation for the purpose of illustrating that from the very 'get go' this whole investigation was 'deeply flawed, deeply flawed'.”

“They don't ask Mr Lowry anything, not a single question, do you find that bizarre?” Mr O'Higgins asked referring to the fact that Mr Lowry was never interviewed by tax inspectors.

Mr O'Higgins said normally when gardaí investigate a crime, they get the suspect “bring him in, run the tape and ask the questions,” counsel said before he reminded the jury that Mr Lowry was willing to meet with the tax inspectors.

“The amazing thing about it is, they put the summons out without even having a case against Mr Lowry, to stop the clock and put a criminal charge in place. When they hadn't asked him anything and they had no case against him,” Mr O'Higgins said.

He said the case was “jaundiced from the outset” telling the jury that Revenue didn't even write back to his client when he said he was willing to meet for an interview.

“He was met with a wall of silence, having nominated dates for a meeting, and here we are today,” counsel said.

“This investigation is skewed. Calculated to point you in a particular direction,” he suggested.

He advised the jury that it really needed to focus on whether Mr Lowry had full knowledge of what had been accounted for in Garuda's books.

He referred the jurors specifically to the charges and said they must be satisfied that “ the offence was committed with consent or connivance of Michael Lowry”.

Mr O'Higgins told the jury that people do their best but systems are not perfect and mistakes occur all the time.

“Bear that in mind and do not work on the basis that this (Garuda Ltd) is some kind of perfect place,” counsel continued.

He told the jury that when his client knew there was a 1997 tax bill pending against Garuda he wanted to take on the liability personally and to pay it out of his pocket. That tax bill was later cleared by Mr Lowry, he said after re-mortgaging his home.

“He could have walked away. The company doesn't have the money and the only way it got it was him.”

He told the jury that his client is a TD, who has served as a member of the government and has done much for his constituency from “getting a drain pipe fixed to getting a medical card”.

“Here you have Mr Lowry meeting the great third arm of the State and 12 randomers (sic) assembled together, walked through the door to decide his case,” Mr O'Higgins said.

“Mr Lowry started out with a tax problem and he attempted to fix the thing in 2006. It was an attempt to fix it. It was purely random that the tax rate had gone down and that the currency had changed. That was not by design,” counsel continued referring to the fact that the corporation tax in 2002 was 16% and 12.5% in 2006.

“Seven years later the Revenue called on the door. All things being equal you would have expected the thing to end but it not only grew legs but a herd of legs,” Mr O'Higgins said.

“Had he not tooled up and hired his legal team that €1.1 million would have crystallised,” Mr O'Higgins said referring to the fact that Mr Lowry and Garuda successfully appealed a €1.1 million tax bill in 2015.

“Institutions are not agile creatures. They are more like the elephant, they don't have the agility of a cheetah but they have resources, strength and stubbornness.”

“They held that charge over Mr Lowry until a point had been reached at the end of this case when the application to take it away from you was successful,” Mr O'Higgins.

He was referring to the fact that on Wednesday, Judge Martin Nolan told the jury that a charge of delivering an incorrect tax return for 2002 had been withdrawn.

“This is a case where there was an excessive form of zeal, a form of tunnel vision and a case was brought that showed utter inflexibility and was disproportionate,” Mr O'Higgins said.

Mr Lowry (64) of Glenreigh, Holycross, Co. Tipperary, has pleaded not guilty at Dublin Circuit Criminal Court to four charges of filing incorrect tax returns on dates between August 2002 and August 2007 in relation to a sum of Stg £248,624 received by his company, Garuda Ltd and one charge in relation to failing to keep a proper set of accounts on dates between 28 August, 2002 and August 3, 2007.

He further pleaded not guilty on behalf of Garuda Ltd to three similar charges in relation to the company's tax affairs and one charge of failing to keep a proper set of accounts on the same dates.

The trial continues before Judge Nolan and a jury of three women and eight men.