The government has washed its hands of hundreds of bogus companies registered in Ireland that could be used to perpetrate fraud costing victims millions of euros.
The senior official in the Ministry of Enterprise, Trade and Employment insisted that there is “no basis” to believe that these bogus companies are bogus, although the companies were created in using identity theft, fake phone numbers and forged email addresses.
Many even use a fake corporate secretarial firm, a long-standing company Independent Irish the investigation uncovered.
Fraud experts warn bogus companies – all of which have directors who appear to be based in China – could be used to commit tax evasion, circumvent trade sanctions and engage in international money laundering.
Yet the department, which oversees the Companies Registry Office (CRO) where the documents of these bogus companies are processed, shrugged at the problem, meaning that criminals have effectively been given carte blanche to continue establishing companies and use them for illegal activity.
The names and addresses of dozens of legitimate businesses across the country have been hijacked by scammers, who use the credentials of real businesses to establish the identity of their fake businesses without the knowledge of the real businesses at those addresses. .
Many small businesses – and even HSE – have been used in this way.
“Sharing an address with an existing business is not necessarily an indication of something untoward,” department general secretary Dr Orlaigh Quinn said in a letter. who was seen by the Independent Irish to Sinn FÃ©in TD Maurice Quinlivan, Chairman of the Oireachtas Joint Committee for Business, Trade and Employment.
The committee asked the ministry about bogus businesses during summer walk from a series of stories in the Independent Irish review false statements to the CRO.
Dr Quinn even suggested that there might be nothing wrong with the CRO’s own address being used as the registered address of at least one of the bogus companies, as the CRO shares the building with other companies. professional services and residential units.
However, she acknowledged in her letter that in this case she referred a company that was using the CRO’s address to the Office of the Director of Law Enforcement (ODCE).
Earlier this year, the Independent Irish revealed that more than 100 bogus companies had been started using a single residential address in South Dublin. The owner of the property was unaware that the businesses had been registered at his home. Other houses on the same street had their addresses used by fraudsters.
Bogus businesses continue to openly establish themselves here every week.
In the past three weeks, a legitimate Irish director whose identity had previously been stolen by fraudsters who had registered her as a director of several bogus companies, was again targeted. However, this time the CRO asked the woman if she had consented to being a director of bogus companies.
And although she was no longer registered as a director of these companies, they were still allowed to be registered with the CRO although they now only have one director with an address in China. All Irish companies must have at least one resident director of the European Economic Area.
Another legitimate Irish director whose identity was thus stolen reported the matter to ODCE.
“The register is consulted during investigations carried out by the garda, the ODCE, the tax authorities and other state entities with an executive role,” Dr Quinn said in his letter. âLittle, if any, is brought to the attention of the CRO in the context of such activity to support the hypothesis that there is an abuse of the ‘good faith’ approach. “
The ministry has already insisted that the CRO relies on this âgood faithâ approach, which alleviates the burden of doing business and is efficient. However, it also clearly leaves the registry open to serious abuse.
It will also be nearly impossible to track down the criminals who have turned bogus business creation into an industry.
âWhile it is not the role of the CRO to question the motivation for incorporating a company, the registry is also developing additional integrity checks on applications and tracking any issues that arise, including referrals. questions to the Director of Law Enforcement, if applicable, âMs. Quinn concluded.
Mr Quinlivan said he expects CRO officials to appear before the commission before Christmas to address the serious issues raised by the Independent Irish.