Four KPMG Senior Execs Arrested on Tax Evasion Charges


Reported by The Financial Times (UK), CBC News and the Guardian (UK), November 27, 2015

Four senior executives from the Belfast office of international accountancy firm KPMG have been arrested on tax evasion charges.

Read more: KPMG Calls In Outsider In Northern Ireland Tax Fraud Investigation

Read more: KPMG Offshore Tax Sham Deceived Tax Authorities CRA Alleges

Read more: KPMG Tax Sham Used By At Least 25 Wealthy Canadians Document Says

KPMG acknowledged in a press release that four of its top executives in Northern Ireland were arrested Wednesday.

“Pending further information and enquiry, we can confirm that four partners in our Belfast office are on administrative leave. As the matter is ongoing, KPMG is not in a position to make any further comments at this stage,” the company said in a news release.

The four men who were charged and released are:

  • Jon D’Arcy.
  • Eamonn Donaghy.
  • Arthur O’Brien.
  • Paul Holloway.

KPMG Belfast Execs

From left to right: Eamonn Donaghy, Paul Holloway, Tom Alexander (not arrested or implicated), and Jon D’Arcy of KPMG Northern Ireland. Arthur O’Brien is not shown.  

New criminal offences that allow charges against people who help clients with tax evasion came into effect in the U.K. last March.

The Financial Times reports, “The arrests are the latest blow to Northern Ireland’s tightknit business community, which has been hit by a scandal surrounding the £1.2bn sale of a portfolio of property loans to Cerberus, a US private equity company. This year allegations emerged that some Northern Ireland politicians stood to gain from a £7m “fixer’s fee” linked to that deal.

The purchase of the loans is the subject of criminal investigations in the UK and the US.

As well as working together at KPMG, the four men are investors in a property company called JEAP Ltd. The company is registered in County Down and has a trading address at 17 College Square East in Belfast — the same address as KPMG. They are listed as JEAP’s directors and shareholders and its articles of association describe its purpose as “to engage in property development activities.”

It is not clear if the arrests are linked to the activities of that company. Property development was a popular investment among professionals on both sides of the border during Ireland’s property boom, which ended in 2008 when the global financial crisis hit.

An island-wide collapse in property prices triggered Ireland’s financial and banking crisis from 2008 to 2010, which reverberated almost as loudly in Northern Ireland as it did in the Republic. Many investors lost heavily in the crash.

The arrests of four such senior staff is a blow to KPMG’s presence in Northern Ireland. Its operations in Belfast are among the biggest of any professional services firm. It is understood that senior staff from the Dublin office have been sent north to ensure the office is able to carry out its day-to-day functions.” End

 

CRA alleges KPMG ‘tax scam’

Meanwhile in Canada, KPMG is fighting the Canadian Revenue Agency over tax arrangements that allegedly hide money for wealthy clients.

The CRA alleges KPMG has used “deceptive practices” that hide the money of wealthy clients in Canada..

In February 2013, a federal court judge ordered KPMG to turn over a list of multimillionaire clients who placed their fortunes in an Isle of Man tax shelter scheme created by the accountancy firm. KPMG is fighting that court order and has yet to identify the wealthy people involved.

The case is scheduled to return to court in 2016.

Legal action against the firm for violations of tax laws and links to tax shelters have been mounting in recent years.

Files leaked from Luxembourg earlier this year show KPMG among the advisers of some multinationals who have successfully shifted money to the low-tax region.

In 2005, the firm paid fines in the U.S. of $456 million US for creating illegal tax shelters to help rich clients avoid tax.

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