Former Custom House Capital CEO and three others to be sentenced next month

Former chief executive of Custom House Capital (CHC), Harry Cassidy, is to be sentenced next month for conspiracy to defraud investors after a judge heard from a number of investors about the devastation they suffered when they lost their pensions.

The regulated Dublin investment firm collapsed in 2011 after High Court inspectors appointed on the application of the Central Bank confirmed that client funds had been used without their knowledge or consent to try prop up commercial property investments in continental Europe.

Addressing Judge Orla Crowe in the Dublin Circuit Criminal Court at the end of a hearing where a number of former investors told of how they had suffered because of the loss of their investments, Lorcan Staines SC, for the prosecution, said the common law offence of conspiracy to defraud did not have a stated maximum sentence.

The court could be said to be “at large” in terms of deciding sentence, although it was also governed by the overall rule of proportionality.

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Judge Crowe was handed a book containing victim impact statements from 197 investors which she said she would read between now and May 12th, when she is due to give her decision.

Awaiting sentence are Cassidy (66), Paul Lavery (47), John Mulholland (72), and John Whyte (52). Cassidy, Lavery and Whyte have pleaded guilty to conspiracy to defraud, while Mulholland has pleaded guilty to a lesser charge of neglect in the discharge of his duties as a non-executive director.

Cassidy, of Clon Brugh, Aitkens Village, Stepaside, Co Dublin, is the former chief executive of CHC. Lavery, of Rafeenan, Ballynod, Co Monaghan, is a former financial controller of CHC. Mulholland, of the Foxes Collvert, Mount Juliet estate, Thomastown, Co Kilkenny, is a former non-executive director, and Whyte, of Beechpark, Lucan, Co Dublin, is a former head of private clients. Cassidy and Mulholland were the major shareholders in the business, in which Whyte also had a shareholding.

The court heard from Dec Inspector Alan McGovern of how CHC had invested in commercial property in Europe and had begun to improperly use client money when some of these investments got into difficulty as the property crash began. A liquidator, Kieran Wallace, then of KPMG, was appointed to CHC in late 2011.

He has since estimated that €61 million in client funds was misappropriated, mostly by being diverted to property investments, of which €41 million had since been recovered. Mr Staines gave an example of one man who was aged 66 at the time the liquidator was appointed and had been told that year his investment was worth €993,620. Now aged 75, this man had had €131,199 returned to him, or 13 per cent of the total.

Mr Staines quoted a report from Mr Wallace which said that what had happened had “significant adverse impacts” on investors, with some having to sell their family home and others having marital issues. Many had faced into their retirement “without the benefit of their hard earned savings”.