A BELFAST judge has ordered the imprisonment of a French businessman suspected of operating a cross-Border investment scam in which investors have lost heavily.
François de Dietrich, a French national based in Co Donegal, was not in the Chancery Court yesterday for the hearing. Mr Justice Deeny ordered that he be jailed for 18 months for failing to comply with a series of court orders and therefore being in contempt of court. Under the terms of an earlier injunction, de Dietrich had been ordered to reveal details of his worldwide assets.
The businessman’s whereabouts are not known although he is thought to be outside the Northern jurisdiction. Injunctions are in place to prevent de Dietrich or his company, ETIC Solutions, from taking any further investments. He denies any wrongdoing.
Announcing the sentence and ordering an immediate bench warrant for his arrest, Mr Justice Deeny found that he had acted unlawfully and had deliberately been in contempt by failing to disclose his business affairs in full to the relevant authority, the Financial Services Authority (FSA).
“I am satisfied beyond reasonable doubt that this was a deliberate contempt on the part of the first defendant [de Dietrich] who is seeking to evade his obligation to obey an order of the court and indeed his statutory obligation to respond to legitimate requests for information from the Financial Services Authority,” he said.
“There are very large sums of money involved. The current freezing order of the court exceeds £20 million [€23.23 million].”
The true total of the sums involved in the investment scheme was not known, the judge added, partly because of the failure of de Dietrich to disclose his business affairs.
“He has taken deposits from persons in the United Kingdom, and quite clearly a neighbouring jurisdiction, the Republic of Ireland, as well, when he had no licence to do so,” he added.
The FSA had already obtained court orders freezing £6.8 million of de Dietrich’s assets, a figure later increased to £20.2 million. Its lawyers have argued that the defendant has to date only revealed details of his business operations in the UK, the Republic and Estonia.
De Dietrich’s solicitor, Peter Madden, argued in court that the freezing of yet more of his client’s money and the ordering of his imprisonment would further impede any attempt to repay money to the dozens of investors on both sides of the Border.
He later argued that he could not see how any committal order could help investors. “If the FSA’s stated obligation is to protect consumers, I don’t see how consumers could be protected if Mr de Dietrich is committed to prison.”
However the judge said de Dietrich was guilty of more than one failure to disclose and the situation had lasted several months. He did not record any finding of fraud, but did state that the failure to disclose information as requested by the FSA clearly reduced the chances of recovery of investors’ cash.
Mr Madden said he would appeal.
Short-term investment scheme: Garda fraud bureau investigation
CONOR LALLY amd PAMELA DUNCAN
THE GARDA Bureau of Fraud Investigation is examining the activities of François de Dietrich in the Republic. They believe he may have secured substantial sums for investment purposes, perhaps running to millions, from people on both sides of the Border.
They have to date received eight complaints from Donegal investors who put money into the scheme. The scheme offered investors short-term returns on liquidated assets for large profits.
The Northern Ireland Courts Service yesterday issued an EU arrest warrant for de Dietrich for failure to disclose the full extent of his assets although he has not been charged with any offence. His whereabouts are unknown although he is not thought to be in either Northern Ireland or the Republic.
There have been growing fears over the investments since last autumn when de Dietrich, the director of ETIC Solutions, had a court action brought against him by the UK Financial Services Authority, banning him from taking more deposits from investors.
The authority subsequently froze £20.2 million (€23.5 million) of the businessman’s assets. A Garda source said it was difficult to establish how many people from the Republic invested with the French national but said it was likely to be substantially higher than the relatively small number who had come forward so far.
It is thought that the number of complaints may increase in February, the deadline given to a number of Donegal investors for a return on their investments.
“There is evidence that he promised returns to people and that in many cases these returns were paid,” one Garda source said.
“We would need to sit him down and interview him about his business. We would have to investigate if a fraud was actually committed or if he simply invested money and those investments turned out to be bad.”
On Tuesday two businessmen secured an interim order in the Republic restraining ETIC Solutions from reducing its AIB account below €1.7 million. They are also seeking summary judgment against the investment company of the total amount involved.