Analysis: The first six months of the ‘Irish FBI for white-collar crime’
Fieldfisher senior associates Will Glover and Neil Cahill examine the record to date of Ireland’s Corporate Enforcement Authority (CEA).
Heralded as “an Irish FBI for white-collar crime” by former Taoiseach Leo Varadkar, the Corporate Enforcement Authority (CEA) marked its six-month anniversary on 7 January 2023.
At its inception, Ian Drennan, the CEO of the CEA envisaged that:
“With enhanced autonomy and significantly increased levels of investigative assets – including additional legal and digital forensics professionals and seconded members of An Garda Síochána – the Corporate Enforcement Authority will assume the ODCE’s current caseload and will, I anticipate, continue to build on the ODCE’s forensic and robust approach towards tackling serious breaches of company law and associated wrongdoing in both civil and criminal realms.”
This enforcement update considers the recent enforcement activity of the CEA and whether it has been able to maintain its early ambitions for a robust approach. In addition, we highlight some key points to take away.
Dublin Distillers & Co Teoranta
8th July 2022 – The CEA announced an investigation into Dublin Distillers & Co Teoranta relating to the filing of false B1 Annual Returns with the Companies Registration Office. Mr Illann Power was charged with three counts of Providing False Information contrary to Section 876 of the Companies Act 2014. In a surprising development, Mr Power has since been allowed, by the Dublin District Court, to travel to America to take up a position offering a significant salary and it is understood he has not yet entered any pleas to the offences which appear to be summary in nature.
Statement on Activities
15th July 2022 – The CEA issued a statement on its enforcement activities. The statement sets out details of the approach of the Authority. Of note, the statement also indicates that: “[…] the CEA may, in submitting a file to the DPP, recommend criminal charges over and above/in addition to company law charges – for example, theft, false accounting, money laundering, tax offences etc.”
Multi-Jurisdictional Investigation - Corporate Fraud
2nd August 2022 – The Authority announced that following: “[…] a multi-jurisdictional investigation by the CEA into serious allegations of corporate fraud involving a Dublin based company […]”, an unnamed woman was charged with four offences: one charge of fraudulent trading contrary to s. 722 Companies Act 2014; one charge of breaching obligations to keep adequate accounting records contrary to s. 281 Companies Act 2014; one charge of deception contrary to s. 6 Criminal Justice (Theft and Fraud Offences) Act 2001; and one charge of furnishing a false/misleading document contrary to s. 241(1) Social Welfare Consolidation Act 2005.
19 September 2022 – Following an investigation into the affairs of Emeracly Ltd, Emer Murphy of Kylebrack, Co Galway, was charged with six counts of fraudulently removing property of a company within 12 months preceding winding up or a time thereafter contrary to s. 717(b) Companies Act 2014, and two charges of theft contrary to s. 4 Criminal Justice (Theft and Fraud Offences) Act 2001. Ms Murphy faces trial at the Galway Circuit Criminal Court in April 2023. Emeracly Ltd was a property management company based in the west of Ireland which entered into liquidation in 2018.
Unauthorised Auditor Registration
10 October 2022 – Following an investigation into the unauthorised and unlawful use of an Auditor Registration Number in the submission of annual returns to the Companies Registration Office, Mr Robert Browne of Killoe, Co. Longford, was originally charged and entered a plea of guilty to only one count of Providing False Information contrary to s. 876 of the Companies Act 2014. However, on appearing at his sentencing hearing, he pleaded guilty to a further six counts of the same offence on 19th December 2022. He received a two year suspended sentence and was ordered to pay 30,000 Euros in compensation.
The following points can be derived from these updates:
- The CEA has shown an interest in investigating corporates but has so far only charged individuals in its criminal enforcement activities.
- The CEA has managed to bring charges and secure a custodial sentence (albeit suspended) in its first six months.
- The CEA has brought summary only offences and recommended indictable offences to the DPP.
- The Authority has pursued or recommended charges for wider dishonesty offences (i.e. in addition to ‘company law’ offences under the Companies Act 2014).
A short refresher on the CEA
The CEA is an independent statutory authority born out of the Companies (Corporate Enforcement Authority) Act 2021. Its stated functions under the Companies Act 2014 include investigating and taking appropriate enforcement action in response to identified breaches of “company law”.
It performs similar duties to the former Office of the Director of Corporate Enforcement (ODCE) but it has a new structure. One of the main differences between the CEA and the ODCE is that the CEA is statutorily independent and does not sit in the Department of Enterprise, Trade and Employment.
It is anticipated that the CEA will continue to have greater resources at its disposal to investigate significant and complex cases of white-collar crime. In addition, the CEA has more authority to hire specialist and expert staff together with increased funding levels compared with the ODCE.
The functions of the CEA include:
- encouraging compliance with company law;
- investigating instances of suspected breaches of company law;
- taking appropriate enforcement action in response to identified breaches of company law;
- supervising the activities of liquidators of insolvent companies; and
- operating a regime of restriction and disqualification undertakings in respect of directors of insolvent companies.
The CEA’s powers include:
Powers of investigation
- the power to require the production of documents (including electronic documents) by companies and relevant third parties;
- powers of search and seizure;
- the power of arrest; and,
- the right to seek certain additional investigative measures from the courts such as, for example, the granting of production orders and the appointment of court-appointed Inspectors.
- to offer, legally binding if accepted, restriction and disqualification undertakings;
- to apply to the High Court for the disqualification of a company director in certain circumstances;
- the power to apply to the High Court to have a company wound up (liquidated) in certain circumstances;
- the power to initiate summary prosecutions in the District Court; and
- the power to refer more serious matters to the Director of Public Prosecutions for consideration as to whether criminal charges should be directed on indictment.