Playboy and mayor 'in £20m tax fiddle'

A flamboyant businessman accused of forming a crooked alliance with a former Irish government minister to run a £20m tax fraud was jailed for eight years yesterday.

A flamboyant businessman accused of forming a crooked alliance with a former Irish government minister to run a £20m tax fraud was jailed for eight years yesterday.

Daniel O'Connell was said to have led a luxurious "playboy" lifestyle and showered diamond jewellery on his mistress while committing VAT swindles.

O'Connell's "partner in crime" was Michael Keating, a former Lord Mayor of Dublin who had also served in the government of Garrett Fitzgerald in the 1980s, the jury was told at Middlesex Guildhall Crown Court in London.

After the case, a customs investigator, Martin O'Neill, said the only reason Mr Keating was not in the dock was because the extradition agreement between Ireland and the UK did not include "fiscal crimes".

The court was told the swindle was based on the VAT-free status of goods exported from one EU country to another. Peter Rook QC, for the prosecution, said O'Connell bought consignments of expensive computer chips and other components and made it look as though they were heading for companies in Ireland.

In reality, nearly all of the £100m purchases by O'Connell's firms never left British shores and were sold at a large profit. The few "token" exports that did arrive in Ireland were sent "straight back again".

Mr Rook told the court that while O'Connell was the "prime mover" in what went on, it was the Crown's case that Mr Keating also played a central role.

O'Connell told the court that far from being a partner in crime, Mr Keating masterminded the fraud while terrorising him into obedience.

O'Connell claimed he was living in fear. However, the court was told, he spent lavishly in plush hotels and overseas holidays.

At the same time he was secretly moving large sums of money abroad to Belize, the Bahamas and the Turks and Caicos Islands. By February 1999, a "staggering" £4.2m had been transferred off-shore.