IT consultant who failed to pay €180,000 in VAT jailed after suspended sentence deemed too lenient | BreakingNews.ie

An IT consultant who failed to pay over €180,000 in VAT owed over a period of seven years has been jailed for 12 months after the Court of Appeal found his fully suspended three-year sentence was too lenient.

Clive Gargan (48) had paid back the sum due plus interest, and was fully tax compliant by the time he was originally sentenced.

Gargan was charged with 84 VAT-related offences in total; 42 counts of failing to deliver VAT returns and 42 counts of failing to pay VAT within a statutory period between 2009 and 2016.

A wholly suspended sentence was imposed after Gargan entered guilty pleas to eight counts, with the remaining counts taken into consideration.

Gargan, of The Belfry, Kilmainham, Dublin 8, was a self-employed IT consultant working for various companies. He had previously been registered for VAT during the period of October 25th, 2004, to November 1st, 2006, after which time he de-registered.

The State had appealed the leniency of the three-year suspended sentence imposed by sentencing judge Ms Justice Patricia Ryan at Dublin Circuit Criminal Court on December 15th, 2023, arguing that too much weight had been given to the mitigating factors in the case.

The Director of Public Prosecutions emphasised that the respondent did not cease his offending behaviour until he was caught.

Error in principle

Delivering judgement at the Court of Appeal on Tuesday, Ms Justice Isobel Kennedy said the court was of the view that the wholly suspended sentence imposed by the trial judge constituted an error in principle.

She said that whilst the court did not accept the State’s submission that the respondent essentially received “no punishment”, as a suspended sentence “is a sentence”, they were of the view that the discount from the headline sentence of five years to a wholly suspended sentence was a substantial departure from the norm.

She observed that the offending proceeded over a prolonged period from May or June 2009 until March or April 2016, and that the amount involved was “significant”.

Quashing the original sentence, Ms Justice Kennedy said the three-judge court agreed with the nomination of a global headline sentence of five years imprisonment. However, she went on to say that “proportionality is central to a just sentence” and the correct sentence “reflects the offence committed by the particular offender”.

After taking mitigating factors into consideration, including the “albeit late” plea, the payment of the sum plus interest and the absence of previous convictions, she said the court considered that the appropriate reduction was 18 months once mitigation was taken into consideration, leaving a sentence of three and a half years.

Ms Justice Kennedy, sitting with Mr Justice Patrick McCarthy and Ms Justice Tara Burns, said the court would suspend the final two and a half years to incentivise rehabilitation, leaving a period of one year in custody.

Investigation

Gargan’s offending came to light when a company who had used his services sought a VAT return and was asked to provide certain information to the Revenue Commissioners so that this return could be processed.

This information included two invoices from the respondent containing a VAT registration number which had ceased to be valid in November 2006.

Further investigative steps revealed Gargan had received payments from this company from 2011, and from a second company, Ergo Services, in 2008, 2010 and 2011, and that no VAT returns of payments were received in respect of any of these transactions.

The total VAT amount involved in the case was €180,623.51.

Gargan was charged with 42 counts of failure to deliver a VAT return contrary to S 1078(2)(g)(ii) of the Taxes Consolidation Act 1997 as amended by S 133(a) of the Finance Act 2002, and 42 counts of failing to pay the VAT due within the statutory period contrary to Section 1078 (2)(i) of the same Act, as amended between 2009 and 2016.

The respondent paid the VAT due plus interest on June 30th, 2016.

At the sentence hearing on December 1st, 2023, approximately €16,000 remained outstanding.

The sentencing judge put the matter back for two weeks in order for the respondent to pay the outstanding amount before handing down her sentence.

Gargan had no previous convictions and was fully tax compliant on the date of sentence.