IRELAND - The director of an Irish building firm is the first person to be fined €5,000 and costs by a criminal court for obstructing an investigation by the Pensions Ombudsman.

Paul Kenny, the Pensions Ombudsman, said the criminal prosecution had followed an earlier legal victory in April when the firm - 3D Restoration & Construction - was ordered by Galway Circuit Court to produce employment records requested by the Ombudsman.

The request was part of the Ombudsman's investigations into allegations that pension deductions were made by the company from employees' wages but were not passed on to the Construction Workers Pension Scheme. (See earlier IPE article: Ombudsman wins court case against building firm)

However, following the court order Kenny revealed criminal proceedings had been initiated against the director of the firm as, under the Pensions Act, it is a criminal offence to obstruct an investigation by the Ombudsman.

The defendant David Denton failed to appear in court in July so the judge imposed the maximum penalty available - a fine of €5,000 and costs - and stated the fine had to be paid within nine days or Denton would spend seven days in prison in lieu of payment.

Denton has now appealed the ruling and his appeal is expected to be heard in October.

It is understood he will also attempt to address the contempt of court rulsing at around the same time, resulting from his failure to comply with the original court order to produce the employment records.

The Ombudsman said his office is hoping the two cases will be heard at the same time, as "the existence of one case should have some bearing on the other".

But Kenny pointed out this is not an isolated incident, as another criminal prosecution brought by the Ombudsman has resulted in a bench warrant - for the arrest of an individual - being issued by a judge, while a third case is ongoing but has now been adjourned until November.

Kenny said: "We have teeth and we are going to use them. We hope people will begin to see sense but if it takes a few bodies dangling at the crossroads then that's what we'll do. It's absolutely essential that the process will be taken seriously."

He warned both employers and their advisers "must realise that failure to comply with a request for information or documentation from my Office will have very serious consequences".

Kenny pointed out should legal action become necessary, and the prosecution is successful, employers could end up having to pay both legal costs and, if the Ombudsman eventually finds against them concerning the original allegations, the cost of repaying pension contributions as well as a potential criminal conviction.

"It gives me no joy to go down this road but in certain cases I am left with no option but to use all of the legal avenues available to my Office to complete an investigation," he added.

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