A jury has once again failed to reach a verdict in the second trial of a financial services manager accused of being part of an alleged conspiracy to defraud investors in Custom House Capital over a decade ago.
Ciara Kelleher (53), the firm’s then-senior portfolio relationship manager, was accused of one count of conspiring with others to defraud investors, clients, and customers of Custom House Capital Ltd (CHC) by intentionally misleading them as to where or how their assets had been placed in the investment firm.
The offence was alleged to have happened within the State on dates between October 2008 and July 2011. Ms Kelleher, of Blackhorse Ave, Dublin 7, had denied the charge.
It was the second trial in the case after a jury was unable to reach a verdict following a trial two years ago.
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After deliberating for just over eight hours, the jury told Judge Elva Duffy on Thursday that it had been unable to agree on a verdict.
Judge Duffy thanked the jurors for the care and attention they gave to the case.
She adjourned the case to February 27th for the prosecution to obtain further directions and remanded Ms Kelleher on continuing bail to this date.
It was the State’s case that CHC entered agreements to buy properties in mainland Europe at the time of the financial crash. In 2008, CHC began to use client funds to meet these obligations, often without the knowledge or authorisation of clients.
It was the prosecution’s case that transactions on CHC’s systems were backed out of property before valuations were issued to clients. These valuations were misleading and did not show clients the true location of their funds. It was the prosecution’s case that Ms Kelleher was aware and involved in a scheme to defraud investors in CHC. Ms Kelleher denies any wrongdoing.
In his closing speech, prosecuting senior counsel Lorcan Staines said the essence of the State’s case is that affected clients of CHC were misled about the location of their money and lost the option to ask for their money back due to misleading information in valuations.
He said many of those affected were not high net-worth individuals, but small investors. He said Ms Kelleher was part of a “golden circle”, though at a lower level of culpability than others.
In her speech, Anne Marie Lawlor SC, defending, said the case against her client was circumstantial and that there was “no direct evidence” that her client was involved in any agreement with others to defraud investors in CHC.
She said there is no evidence that her client lied to gardaí when interviewed and asked the jury to consider her client’s reaction, as shown by videos of her interviews, when allegations are put to her.
Ms Lawlor said emails showed her client “asking for information from others to do her job” and submitted to the jury that people working in an organisation must “repose trust” in colleagues about information they provide that you don’t “necessarily have access to”.
CHC’s former chief executive Harry Cassidy (69), John Whyte (55), former head of private clients, and Paul Lavery (49), former head of finance, previously pleaded guilty to conspiring with others to defraud investors in, and clients and customers of Custom House Capital Ltd by intentionally misleading them as to where and/or how their assets had been placed contrary to common law.
John Mulholland (75) of The Foxes Colvert, Mount Juliet Estate, Thomastown, Co Kilkenny – a non-executive director of CHC – pleaded guilty to one count of neglectful discharge of the duty of a director in relation to the commission by the company of acts of dishonesty by inducing clients to entrust funds, refrain from removing funds with the intention of making a gain for itself and causing loss to another.
All of the offences occurred within the State between October 1st, 2008, and July 15th, 2011.
Cassidy (69), of Clon Brugh, Aitkens Village, Stepaside, Dublin; Whyte (55) of Beechpark, Lucan, Dublin; Lavery (49) of Rafeenan, Ballynod, Co Monaghan and Mulholland were all sentenced at Dublin Circuit Criminal Court almost two years ago.
Cassidy was handed a sentence of six years and ten months, Whyte – former head of private clients- received a sentence of four years and Lavery was handed a sentence of three years.
Mulholland received a 12-month sentence.
The sentencing hearing of the four men in May 2023 heard that around 80 accounts were affected by the scheme.
When High Court inspectors were appointed to CHC in 2011, they found that €56 million of client money had been inappropriately transferred to property investments.
In an update to the Dublin Circuit Criminal Court during the sentencing of Cassidy, Mulholland, Whyte and Lavery almost two years ago in 2023, CHC’s liquidator Kieran Wallace said €61 million in client funds were found to have been misappropriated. The court heard that €41 million (64 per cent) of this amount has been recovered, with clients receiving €39 million so far as of March 2023.
A total of €253.4 million across over 3,000 accounts was held by the company on the date of liquidation. In 2023, Dublin Circuit Criminal Court was told that the liquidation of CHC is expected to continue until 2025.
