The first criminal prosecutions under new anti-money laundering and anti-terrorism laws have targeted bogus companies first exposed by an Irish Independent investigation last year.
etails of the successful prosecutions are only being made widely known today following queries made by the Irish Independent this week.
Five companies – four of them bogus – were convicted at the end of June in separate cases at the Dublin Metropolitan District Court for failing to file ownership details as required under the Register of Beneficial Ownership.
The mandatory Register of Beneficial Ownership (RBO) was established under the EU’s fourth money laundering directive, commonly known as MLD4. It is designed to prevent money laundering and the financing of terrorism using corporate entities.
All companies and societies must register details of the beneficial owners of the entities, or risk prosecution.
Minutes of a stakeholder meeting of the Companies Registration Office (CRO) last month show members were informed of the first prosecutions under the legislation.
But the minutes do not mention details of the five companies or prosecutions.
Following queries yesterday by this newspaper, the Department of Enterprise, Trade and Employment – which oversees the CRO and the RBO – confirmed the details of the five firms hit with fines.
The prosecutions were of Qianeruia Ltd, Zeretiuar Ltd, Yunanera Ltd and Cshunyuan Ltd, all with addresses registered in Dublin but with dubious details filed with the Companies Office.
The four are from a tsunami of fake firms that have been registered in Ireland and which were exposed by an Irish Independent probe last year. Experts have warned that such firms could be used to perpetrate criminal activity around the world, including bypassing sanctions.
The fifth company prosecuted was a trading entity, Liberty Barber of Meath Street in Dublin. It is a trading business with real operations in Ireland.
Hundreds of fake firms uncovered by this newspaper almost always conform to a basic pattern with paperwork listing one director in China and another ostensibly based in a country in mainland Europe or Ireland. Previous research by the Irish Independent ascertained those European and Irish directorships to have been either false or to have used stolen identities.
Many of the fake firms used the addresses of legitimate businesses, without the knowledge of those legitimate entities.
The Irish Independent investigation resulted in the CRO being hauled in front of the Joint Oireachtas Committee on Enterprise, Trade and Employment last year.
The CRO and The Department of Enterprise, Trade and Employment – headed by Tánaiste Leo Varadkar – had insisted that there was “no basis” to believe the bogus companies are actually fake.
The Irish Independent has ascertained that firms whose details are all or almost all false continue to be registered at the CRO, despite the organisation saying last year that it had made efforts to beef up so-called integrity-checking to identify such bogus companies.
Last year, a Dublin businessman complained to the Office of the Director of Corporate Enforcement (ODCE) regarding his appointment as a director of a number of fraudulent firms in Ireland without his knowledge or permission.
A number of other law-abiding business people were also forced to request the CRO to remove them as directors of fake firms to which they had been appointed a director without their knowledge or permission.
A failure to file beneficial ownership details with the RBO can see companies and societies hit with fines of €5,000 on summary conviction, and up to €500,000 on indictment.
Each of the four bogus companies successfully prosecuted in June was fined €3,000.
The CRO stakeholder meeting was also told last month that four other companies pleaded guilty and the Probation Act was applied.
However, the Department confirmed yesterday that in fact just two companies had the Probation Act applied in their cases. One case was struck out, another is ongoing.
The CRO stakeholder meeting was told last week that further prosecutions for failing to comply with RBO requirements are likely in the autumn.
But the Department confirmed yesterday that no firms are being currently targeted for prosecution.
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