Wednesday, 25 Jan 2023
Updated / Wednesday, 25 Jan 2023 20:04
Ciara Kelleher, 51, of Blackhorse Ave., Dublin 7 has pleaded not guilty
at Dublin Circuit Criminal Court (File pic, RollingNews.ie)
A former financial services manager has gone on trial charged with
allegedly conspiring with others to defraud investors over a decade
ago.
at Dublin Circuit Criminal Court to one count of conspiring with Harry
Cassidy, John Mulholland, John Whyte, Paul Lavery and others to defraud
investors in and clients and customers of Custom House Capital (CHC)
Ltd. by intentionally misleading them as to where or how their assets
had been placed in the investment firm.
The offences are alleged to have happened within the State on dates
between October 2008 and July 2011.
Opening the prosecution case, Lorcan Staines SC, prosecuting, told the
jury that Custom House Capital provided investment management and
pension advisory services to approximately 2,000 clients.
It is the State's case that Ms Kelleher was involved in a scheme to
avoid some clients of CHC being aware that their money was not where
they thought it was.
Mr Staines said this scheme was put in place within CHC in 2008 and
2009, at the time of the financial crash.
Mr Staines said it is the prosecution case that CHC's CEO Harry Cassidy
bought a large portfolio of investment properties in mainland Europe.
Mr Cassidy had entered agreements to buy large investments and was
getting demands to make cash transfers into these.
Mr Cassidy started to "pilfer" money from customers to pay these
requests and was essentially "robbing Kevin to pay Klaus," Mr Staines
said.
The court heard that around 80 accounts were affected.
He said that while Ms Kelleher was not the most senior person involved
and did not personally profit, she was "up to her neck" in the scheme
and seeking to improve its processes.
Mr Staines said the company "exhibited signs of a classic Ponzi scheme"
in the later stages as money invested by clients was not being used for
what they thought, but for another purpose.
He said it is the prosecution case that the people who put together the
scheme did so to "deprive clients of information" about their accounts.
It would have become a problem for the company if investors became
aware that their money was not where they expected it to be, especially
during the "worst financial property crash" in living memory, Mr
Staines said.
These valuation statements had to be issued so that CHC could invoice
clients.
These statements included "fictitious interest" which would have been
earned by the client's money if it had been where the client expected
it to be, Mr Staines said.
Mr Staines said Ms Kelleher was aged between 37 and 39 at this time,
had worked for Citibank for ten years and had a degree in International
Commerce and German.
He said it is the State's case that it is "absurd" that someone with Ms
Kelleher's background did not think it was wrong to issue inaccurate
statements.
Counsel said Ms Kelleher told gardai during interview that she didn't
know about any criminal activity and had no knowledge of any property
transactions.
Mr Staines said there is no doubt that Ms Kelleher was a salaried
employee of the Custom House Capital and therefore, is less culpable
than others involved in the scheme.
The jury were told that CHC was run by CEO Harry Cassidy, who owned
just under 50% of the company. John Mulholland was a non-executive
director of CHC and sat on the board of directors. He also owned just
under 50% of the shares in the company.
John Whyte was investment director and head of private clients, and
owned around 5 per cent of the shares in the company.
Mr Staines said Ms Kelleher was a salaried employee of the company,
working as a senior portfolio relationship manager, reporting to John
Whyte.
She was not a shareholder or profit sharer, he said.
Paul Lavery was the head of finance and financial controller.
Mr Staines said the jury would hear that Mr Lavery was a "weak person"
and "dominated" by Mr Cassidy, who allegedly assaulted him on one
occasion within the building.
He told the jury that they must put aside any sympathy they may feel
for investors. He also told them the other people mentioned in the
indictment would be dealt with by different courts.
Clodagh Benson, an employee of the European Pensioner Trustee (EPT)
Company, gave evidence that this company was managed by John Mulholland
and his wife, Ruth Woods and was located in the same building as CHC.
She was shown emails sent from EPT to CHC for valuations and internal
CHC emails about these requests.
Ms Benson said she was told the delays getting investment valuations
from CHC was due to a system issue.
She said Mr Cassidy was known as a "difficult character" and "very
abrupt".
On one occasion, she came down from the EPT office on the second floor
after hearing a commotion and saw Mr Cassidy push Mr Lavery.
Ms Benson said she was "shocked" and immediately went back upstairs.
Ms Benson agreed with Michael Bowman SC, defending, that there was a
close relationship between CHC and EPT, and a close personal
relationship between Mr Cassidy and Mr Mulholland.
Asked about the alleged "assault" on Mr Lavery by Mr Cassidy, the
witness told Mr Bowman she didn't know why Mr Cassidy had done it and
she had never seen anything like that in work.
The trial continues on Friday before Judge Orla Crowe and the jury and
is expected to last up to six weeks.