DPP v Derek Floyd

• Jurisdiction: Ireland
• Judge: Birmingham J.
• Judgment Date: 16 December 2014
• Neutral Citation: [2014] IECA 39
• Court: Court of Appeal (Ireland)
• Date: 16 December 2014

[2014] IECA 39

THE COURT OF APPEAL

Birmingham

Mahon J.

Edwards J.

199/12

234/13

DPP v Floyd

The People at the Suit of the Director of Public Prosecutions

Respondent

V

Derek Floyd

Appellant

DPP v GILLIGAN (NO 2) 2004 3 IR 87 2003/16/3559

Criminal Law – VAT offences – Handling Stolen Property - Sentencing - Severity

Facts: The appellant appealed against the severity of two prison sentences. The appellant was convicted of fifteen counts of making incorrect VAT returns and twelve counts of claiming VAT rebates that he was not entitled to. The maximum sentence on each of the counts was five years imprisonment. The appellant argued that he had not been the instigator or prime organiser of the crimes and the court had relied upon misleading figures when making its decision at the sentence hearing. The second sentence imposed was three years imprisonment for handling stolen property.

Held by Birmingham J: The court was concerned about the prison sentence that was imposed in respect of the VAT offences. The trial judge had deemed the appropriate sentence to be one of five years imprisonment but imposed six years imprisonment with the last year being suspended. This constituted an error in principle. The court substituted the sentence of six years with one suspended with a sentence of five years imprisonment with one suspended. In relation to the second sentence, the court considered the fact that it was a serious offence that required a lot of pre-planning. However, because the appellant was a first time offender the court considered it appropriate to suspend the last eight months of the handling sentence.

1 1. In this case the appellant appeals against the severity of two sentences of imprisonment that have been imposed upon him. The first sentence that the court is concerned with was imposed on the 21 ^st May, 2012 and on that occasion in the Circuit Court he was sentenced to a term of six years imprisonment with one suspended. That was on the basis of two sentences, each of three years which were to be consecutive to each other with as I say, the last year to be suspended. That sentence was imposed following a conviction of the appellant on fifteen counts of making incorrect VAT returns and twelve counts of claiming VAT rebates to which he was not entitled. The sentencing process followed a lengthy trial which concluded on the 21 ^st March, 2012, with the jury bringing in verdicts of guilty on the count to which I have referred.

2 2. The maximum sentence on each of the counts was one of five years imprisonment. The facts of the case can be summarised as follows:

"The applicant obtained registration as a sub contractor getting a C2 card from the Revenue. This enabled him to be paid by principle contractors in full that is without deduction of relevant contract tax by principle contractors. However, during the period in question, 2001 to 2003 ...."

and I pause to say that that represented fifteen VAT periods, each of two months in respect of which the offending continued,

"... he allowed his C2 card to be used by others so that unregistered subcontractors could be paid gross, that is to say without deduction of tax by the principle contractor. These principles paid Mr. Floyd in his invoices. He then cashed the cheques, took his agreed cut and then passed the balance over to the intermediaries. After the first six months of the enterprise, he opened a bank account and put the payments and the receipts through his bank account. The withdrawals from the intermediaries were also reflected in the bank account. As he was obliged to account for VAT on these sales, he arranged to be provided with, or he was provided with, fictitious invoices in respect of fictitious supplies to him so that he could claim input credit to offset the VAT Liability of sales. In a number of instances he went further than merely offsetting the sales liabilities and claimed refunds. The amount of credits claimed resulted in him obtaining refunds which were very significant in some instances."

3 3. This summary is taken from the judge's remarks when passing sentence. However, it is helpful to read on a little for reasons which will become apparent as it is relevant to one of the arguments relating to the principle contention made as to the appropriateness of sentence imposed.

"For example in the period May/June 2002 he claimed a refund of €156,136 and in September/October 2003, a sum of €143,683. The accused's fee for his involvement in the scam was VAT plus 10%. I recall some evidence from the trial that he complained that others in Dublin were in fact getting 15%. In evidence this morning, the Revenue Investigating Officer Mr. Downey said that the total refunds claimed amounted to €684,000 in respect of which Mr. Floyd received €415,536 broken down in terms of actual cheques received of €388,951 and offset against other tax liabilities of €26,585 and that refunds claimed of €267,000 were actually refused by the revenue, Mr. Downey said that close to €16 million went through the accused's bank account in July 2001 and 2004 and that, taking into account he was not using the bank account for the first six months for the operation and adjusting for VAT, he estimated that the loss to the Revenue into the black economy was in the region of €5.25 million."

4 4. The summary was read on beyond what was actually required because the last sentence that was read there, with its reference to €16 million through the accused's bank account and the reference to €5.25 million going into the black economy, is central to one of the major arguments that it presented.

5 5. A number of arguments are advanced on behalf of the appellant as to why the sentence should be regarded as too severe. It is said that he was not the instigator or prime organiser and it is said that a Revenue witness accepted that to some extent he was left as the fall guy in all of this. It is said that misleading figures were relied upon at the sentence hearing and that is with reference to the €15/€16 million going through the accounts. It is this point that is really the core of the appeal on this first sentence and certainly that is the point that is pressed to day in oral submissions.

6 6. It is the case that here we are dealing with VAT refunds wrongfully claimed amounting to €684,000 and that the...