CAB investigation gives rare insight into how business of crime works

It has been evident for the past two years just how deadly the ongoing feud between two Dublin criminal gangs has been. Eighteen people have so far been shot dead. Some of the killers have been convicted and jailed for life. Other suspects for various feud-related crimes are before the courts. Gardaí have saved the lives of over 50 people by stopping and arresting hitmen with loaded guns on their way to shoot people, but still the feud shows no sign of abating..

The Hutch-Kinahan feud dramatically escalated in February 2016 when David Byrne was shot dead in the Regency Hotel. David was a senior figure in the "Byrne Organised Crime Group" which is in reality the Dublin branch of the "Kinahan Organised Crime Group" one of the wealthiest and most dangerous criminal organisations in the world.

The Criminal Assets Bureau has been investigating the gang for years and the evidence it has gathered, outlined in a court judgment this week, gives a unique insight into the structure, finances and operation of this gang in Ireland. The case resulted in the gang losing 29 high-end and luxury cars, three electric bikes and a dune buggy, four Rolex and Breitling watches, two platinum and gold diamond rings, four wads of cash totalling over €26,000 and two houses in Dublin worth over €500,000.

However the case has also exposed not only the gang members, their associates, their partners and their parents, but also their lifestyles, their fraudulent businesses, their money laundering schemes, their international connections and how they amassed millions, which are the proceeds of crime.

The Organised Crime Gang

CAB's main target was 36-year-old Liam Byrne from Crumlin, the leader of the Byrne Organised Crime Gang (BOCG). A career criminal, the High Court was told he was heavily involved in drug trafficking and violent crime and described the evidence of this as "extensive, detailed and largely uncontroverted." He has strong connections to international criminality in the UK, Spain and the Netherlands.

Byrne's gang is also heavily involved in the Hutch-Kinahan feud and was previously involved in the Crumlin-Drimnagh gang feud which cost over ten lives. The gang originated in Dublin but now has interests in Spain, the Netherlands, South America and Dubai. Its business is gun and drugs crime or as the High Court calls it "the importation and distribution of controlled drugs and firearms within this jurisdiction."

The gang was previously led and directed by the convicted drug dealer Christy Kinahan Snr. He left Ireland and since then the gang has become a multi-million euro international crime corporation, hence the name Kinahan Organised Crime Gang (KOCG) used in the High Court. Christy ran its operations from the Costa del Sol in Spain but the murder of David Byrne changed all that.

Christy realised he and his family were now not only under threat from the rival Hutch Organised Crime Gang (HOCG) but also under severe pressure from the authorities in Spain who were working closely with gardaí. Christy moved to the United Arab Emirates and is now living in Dubai.

CAB says the day-to-day operations of his drug trafficking business are now being "managed and controlled" by his sons Christopher Jr and Daniel Kinahan. The gang "has associations that facilitate international criminal activity in Europe, Asia, the Middle East and South America."

Liam Byrne is a "close and trusted associate" of Daniel Kinahan. They attend social, sporting and family events together. Daniel was at the christening of Liam's child in June 2015. Members of the British branch of the Organised Crime Group were also at the christening, to socialise with and pay their respects to the gang leader.

Two of them named in the High Court as Maurice Sines and James Crickmore brought luxury cars, a Rolls Royce and a Mercedes Jeep, from the UK to Ireland to escort the gang leader and his family around Dublin during the celebrations.

The Gang's Stronghold

In spite of its international connections, the Byrne Organised Crime Group is rooted in tight, close family and geographical bonds in Dublin's south city. They live beside each other in a housing estate in Crumlin. The enclave is in the words of the Criminal Assets Bureau, the "stronghold out of which the BOCG operates."

Liam Byrne lives with his partner Simoan McEnroe and their two children in a house in Crumlin. His mother and father, James and Sadie Byrne also live in the same street as did their son David before he was shot dead at the Regency Hotel. David's house is diagonally across from that of his parents. His girlfriend Kelly Quinn was also targeted by CAB and named in the High Court judgment as was Liam's sister Maria Byrne who lives in a house on the road behind her parents' home.

Sean McGovern is Liam Byrne's "trusted lieutenant" in the gang. He lives with his partner Anita Freeman a few hundred metres away from the gang leader in Crumlin in a newly renovated house. He was in the Regency Hotel in February 2016 with David Byrne when the murder took place. He was also shot and injured but managed to escape the gunmen. He refused to co-operate with the garda investigation.

Liam Roe, the gang leader's first cousin, was also found to be a senior gang member. The 39-year-old also survived an attempt on his life at the Red Cow Hotel in November 2015. He was outside having a cigarette when a gunman arrived but his weapon jammed.

Convicted drug trafficker Darren Foster is another senior gang member. CAB discovered that Foster was involved in laundering the gang's money and had on several occasions registered its cars in his name. The High Court said it was clear that Foster's involvement in the gang "was of such value to substantiate the group's investments in him." Any "alleged income" he had the court said, could not sustain the lifestyle that he and his wife Jennifer Foster had maintained to date.

The Car Scam

The High Court found that the Byrne Organised Crime Gang established businesses that do not operate as legitimate businesses should, and are in fact, are a cover for laundering money earned from crime. This was facilitated by a system that operated through car dealerships and other businesses in Ireland and the UK.

In June 2013, Liam Byrne set up LS Active Car Sales at Unit E3 in the Bluebell Business Park on the Naas Road in Dublin. His trusted lieutenant Sean McGovern was appointed a director of the company. LS did not, however, operate as a normal car sales business because most of its cars were not for sale. Instead they were for the exclusive use of the gang members, their partners and girlfriends, associates and family. In the 29 days before the CAB raided the business in March 2016, not one car was sold.

The gangsters had unlimited access to top of the range BMWs, Mercedes, Audis, Volkswagens, Lexus and Land Rover cars, as well as high-powered motorbikes such as the Buell 1100, the KTM 650, Suzuki 600 and the BMW G650X. Three electric bikes and a dune buggy were also stored in the car showroom. The business was also used for various gang member meetings or crime summits.

A "sale and return" system is an arrangement whereby dealerships lend cars to show to prospective customers. In a legitimate business, such loans are short term. However in the case of LS Active Car Sales the loan continued for weeks even though the car remained the recorded property of the seller.

The gang members were able to drive the cars and motorbikes all over the country without ever buying or owning them. They were the de facto owners without having to answer any questions about the cars or take any responsibility for them. They were under garda surveillance and regularly stopped and questioned, particularly Liam Byrne and Sean McGovern. They were, however, able to say that they were driving the vehicles "on a sale and return basis from another garage operating with LS Active Car Sales."

When stopped the gangsters told gardaí the car was on loan from another dealer and they were thinking of buying it. The gangsters would never buy the car and by the time gardaí checked out their story the luxury car would have disappeared only to be replaced by another. And when the other garage was checked out it was also found to be "run by a criminal element."

Illegitimate UK businesses were supplying luxury cars and high-powered motorbikes to the Byrne Organised Crime Gang. However these always remained registered in the UK company's name, even though the UK suppliers had long since parted with them. One example is that of a BMW 430, worth around €45,000. Liam Byrne and Freddie Thompson were photographed driving around in that car while it was still registered in the UK. Both were wearing bullet-proof vests.

Alternatively the gangsters simply registered the cars in the names of other people while continuing to use them. These people also supported the ruse that the cars were being held on a sale-or-return basis by registering ownership in false names. When CAB checked out these owners they found that most of them could not afford to run, let alone buy, a top of the range BMW or Mercedes. Many of them couldn't drive. CAB found these "owners" did not even have driving licences.

A garage was, however, available to maintain and keep the cars clean for the gangsters, their associates, partners and family members.

The Slush Fund

A spurious business was established on paper, which involved buying cars from an unknown source with money also from an unknown source. A forensic examination was unable to establish how 22 cars sold by the company were initially acquired. There were no purchase records but the money received was credited to the company bank account.

The business had a turnover of €369,930 from the sale of these cars. Other people were used to import the cars but the reality was Liam Byrne was bringing them in. The gang was using these people "to front the importation ... by providing the cash to pay Vehicle Registration Tax."

Some of the cars registered to LS Active Car Sales were also found to have been sold outside the business accounts of the company. The source of the money was traced to people acting for the criminal gang or found to be cash lodgements from an unknown source.

The High Court called the business the criminal gang's "slush fund". Ms Justice Carmel Stewart said she was satisfied that "a routine series of such transactions is used to obfuscate the beneficial ownership of the vehicles and frustrate inquiries raised by the authorities."

The company was dissolved on 20 Jan 2016 but the business continued under one of Byrne's other old business names, Active Recovery Services. The gang leader operated it as a sole trader. Fellow gangster Sean McGovern was no longer registered as a director but an employee.

Cars as Currency for Flights and Five Star Hotels

The Byrne criminal gang also used the mechanisms of the motor trade as "a trading and alternate currency system." The cars and motorbikes represented currency among criminals and were moved between organised crime groups. "The ownership was recorded outside the groupings."

PwC was hired by the Criminal Assets Bureau to analyse the business methods and accounts of gang leader Liam Byrne's car business. It discovered almost €40,000 was spent on flights at a time when the company imported just one car from the UK. In addition 35 payments were made to exclusive five star hotels around Dublin city totalling €13,026.47.

The gang members also had "an elaborate pattern of international travel" and a unique way of paying for it. A relative worked in a travel company and booked flights and accommodation for them. Simoan McEnroe, Liam Byrne's partner, was involved in the bookings and once arranged, a man identified only as "Lee" would arrive at the travel shop on a moped and pay in cash for the business trips and holidays.

The Houses

The Criminal Assets Bureau targeted the Byrne gang not only because of the dramatic increase in violence and murder in Dublin, Kildare, Meath and Spain following the murder of David Byrne but also because their assets simply did not match any form of claimed legitimate income.

Senior gang member Liam Roe bought a house in Clondalkin on 29 September 2000 for €119,000. The deal was financed through an insurance claim of €350,000 following a road accident. Gang leader Liam Byrne then bought the house from his cousin for €270, 000 with a 30-year mortgage of €150,000.

It's not known where Liam Byrne got the remaining €120,000. It didn't show up in either his or Liam Roe's bank account and Byrne refused to explain the discrepancy. "It was", Ms Justice Carmel Stewart said,"acquired in suspicious circumstances by individuals with a broad background in criminal wrongdoing." She concluded that the house "was clearly undersold by a sum of in or around €120, 000 and the mortgage on it secured under false pretences."

Byrne claimed in 2006 he worked as a spray painter with a garage in Lucan and was paid €530 a week with an annual bonus of €5,000. He submitted wage slips with his mortgage application showing an annual salary of €27,560, which exactly matched his total weekly wage for the year. However this didn't tally with his tax returns which showed he earned only €10,827.00 that year and paid just €245.51 in tax. And yet he was still able to make monthly mortgage repayments of almost €700 a month. The figures clearly didn't add up.

In July 2016 there was just over €110,000 left on Liam Byrne's mortgage and he was paying it back with monthly lodgements of €2,000. However the High Court heard that when his sister Maria's bank account was analysed, it showed that she was withdrawing €2,000 on the same date each month. In spite of these withdrawals, Maria Byrne made no claim on the property in the High Court.

CAB discovered that Maria Byrne got this money when she sold another house in Ashbourne in Co Meath to "fellow sibling Melanie Johnson".  €400,000 from the sale was lodged to Maria's account between November 2007 and March 2010 and almost €50,000 was then lodged from her account to her brother and gang leader Liam's account. The High Court declared the house in Clondalkin the proceeds of crime.

Senior gang member Sean McGovern bought a house in Crumlin in March 2015 for €150,000. It is now valued at €270,000. It was paid for using two lodgements, one for €150,000 and another inter-account transfer of €20,000. The house was then extensively renovated with over €247,000 spent on it. McGovern lived there with his partner Anita Freeman. Anita was also receiving local government rent subsidies which CAB discovered she was paying into Liam Byrne's bank account.

CAB also discovered that €150,000 of the money used to buy the house came from an electronic transfer from an Investec Bank Account in Mauritius. The money is noted as "a loan for the purchase of real estate in Ireland" as coming from the "Mule State Foundation" c/o Grand Baie Trust Company. However CAB couldn't find any evidence of a loan agreement, a repayment structure or indeed any repayments of this "loan".

A forensic analysis was conducted of Sean McGovern and his partner Anita Freeman's means, including their bank accounts, social welfare and revenue profiles. This however could not establish the source of the more than a quarter of a million euro spent on the renovations for their home. This house was also declared to be the proceeds of crime.

Drug Trafficking and the Mule State Foundation

The Criminal Assets Bureau decided to try to find out more about the "Mule State Foundation" and contacted the UK's National Crime Agency. The NCA responded with information about two conspiracy investigations into drug trafficking from mainland Europe into the UK and Ireland. This turned out to be the British side of the Kinahan gang's drug trafficking business.

The first UK criminal investigation related to a consignment of industrialised metal rollers which when searched contained 21kg blocks of 83% pure cocaine, 365kg of cannabis and 10kg of mixing agent. The drugs were trafficked from Belgium and destined for Ireland. It was just one of a series of shipments worth almost £70m.

The investigation established that 14 similar deliveries had been made to Dublin using the same method by a transportation company called JBS Transport Ltd. James Mulvey, a director of the company, was linked to the drugs shipment by phone analysis and Barry Kenneth Phibbs, the company's transport manager, created the false documentation to smuggle the drugs.

When the police discovered this method of drug smuggling, JBS Transport found another way. They arranged for an employee to collect and deliver drugs to Ireland using C-scooters and replica Harley Davidson motorbikes. They did it five times before they were caught.

Kenneth Phibbs was convicted and sentenced in 2009 to 25 years in prison. He was estimated to have made over £35m from drug dealing and a confiscation order was made to that effect. James Mulvey, however, "slipped the net" and went on the run.

Mulvey was one of the Kinahan gang's main drug suppliers in the UK. The father-of-five organised numerous drug shipments to Europe and arranged for "cover loads" to be sent to Ireland. His haulage business in Birmingham was used to launder the huge profits from the worldwide cocaine and cannabis business he operated with three partners. One of those partners was his cousin, Gerard 'Hatchet' Kavanagh from Dublin who was shot dead in Spain in 2014.

Gardaí, the UK police, Interpol and Europol spent two years searching for James Mulvey The 42-year-old was finally caught and arrested at gunpoint by Special Forces in Lithuania in March 2017. He had been living there with his girlfriend and was extradited to face trial in the UK.

James Mulvey was convicted in June of this year at Birmingham Crown Court and jailed for 32 years. The police discovered that the Mule State Foundation was established "for the educational benefit and well being of the Mulvey family." Mulvey, the Kinahan gang's man in the UK, had in fact laundered almost £8m through the Isle of Man, Monaco and Mauritius.

VAT Fraud and the Mule State Foundation

The National Crime Agency was also investigating VAT fraud and money laundering by a number of payroll companies and the subsequent transfer of that money into the Mule State Foundation. While James Mulvey was not a director of any of the companies, "he was the controlling mind and shadow director of them."

The fraud involved charging VAT on invoices, money that was never paid over to the UK Revenue. Instead the money was moved either in cash or via payments from the company bank accounts to people operating under false names. This disguised the reality that the money was really going to members of the Byrne Organised Crime Gang.

In the ten months between June 2014 and April 2015 £353,000 was transferred to the Mule State Foundation as part of their fraud and money laundering operations. The foundation had so much money it could afford to write off the money that it was owed by Sean McGovern, the Dublin based gangster, after it loaned it to him to buy his house in Crumlin.

On 24 February 2016 two of the foundation's three council members signed the following company resolution:

"It is noted that the Board of the Foundation have taken a decision to write off the loan of €150,000 provided to Mr Sean Gerard McGovern due to his recent demise."

The announcement of McGovern's "demise" was to say the least premature. The gangster had survived the Regency shooting and is still very much alive and well today but living abroad.

The Seizure

Operation Lamp was set up to target Liam Byrne's gang and the "wider group of persons who are connected to the Byrne family." The gang members were put under surveillance. CCTV footage was gathered and interviews and arrests were carried out. Teams of armed gardaí from the Criminal Assets Bureau, the Drugs and Organised Crime Bureau, the Special Detective Unit and the heavily-armed Emergency Response Unit were involved.

They began a series of raids on the gang members' homes and related businesses on 7 March 2016 on foot of court-sanctioned search warrants. Further searches were carried out on 9 March, 10 August and 20 September that year. Twenty-two premises were targeted and 11 people were identified and named in the High Court judgment.

Twenty-nine high-end and luxury cars, three electric bikes and a dune buggy were taken from Liam Byrne. He also lost €8,500 in cash, a Breitling 1884 Chronograph watch, (the kind advertised in fashion magazines) and his house in Clondalkin.

Liam's partner Simoan McEnroe lost her jewellery, a platinum diamond ring with a 1.53 carat diamond and an 18ct White Gold Diamond ring with a 3.6 carat diamond.

Senior gang member Sean McGovern also lost his house, his Rolex Oyster Two-Tone watch and Euro, Sterling and Dubai Durams with a total value of €10,000. Fellow gang member Darren Foster lost €8,700 in cash.

The High Court found that the Byrne Organised Crime Gang and in particular its leader Liam Byrne and his trusted lieutenant Sean McGovern were laundering the proceeds of the gang's criminal activities, transferring wealth between the members of various crime gangs, providing a fleet of luxury cars and high-powered motorbikes to gang members and hiding the beneficial ownership of those cars and motorbikes.

All the assets seized were declared to be the proceeds of crime with a total value of €1.4m. The depreciating assets such as the cars and motorbikes have already been sold. The houses and jewellery are expected to gain in value but CAB can sell them at any time. The money will be held in an account for seven years before it is handed over to the State.