Adviser accused of pyramid scheme

DUBLIN-BASED investment adviser Breifne O'Brien (47) is facing searching questions about his stewardship of funds he managed for friends and clients after he allegedly admitted to misappropriating some €16 million of their money.

The funds were allegedly used to fund his lifestyle, make fictitious profit payments, keep his business interests afloat and buy property.

Married to socialite and businesswoman Fiona Nagle, respected for his own apparent investment nous and a co-director in property firms with certain luminaries of the business scene, Mr O'Brien has agreed to a court order not to reduce his assets below €20 million. In documents opened before Mr Justice Peter Kelly, he is alleged to have admitted to "living a lie" for more than a decade in relation to his investment activities.

Although it must be noted that Mr O'Brien's side of the story was not heard when the case came before the High Court on Monday, claims made by a lawyer acting for eight of his clients have left people in his wide circle of friends and acquaintances in a state of perplexed surprise.

In the account of someone who has met him socially many times, Mr O'Brien is by temperament "cool, laid-back and relaxed". He co-owns laundry firms and taxi companies with his wife, although there is no suggestion at all that she is involved in any of the practices now at issue in proceedings before the High Court.

The debonair and pleasant Mr O'Brien is alleged in affidavits to have expressly said at a meeting last Saturday that it was "easy to pull suckers in when the economy was booming". Recent events, however, made it impossible for him to continue his mode of operation.

Outlined in court documents sworn by solicitor Brian Quigley, who is acting for Mr O'Brien's clients, the modus operandi he is alleged to deploy bears all the hallmarks of a classic pyramid scheme. "He sought money from one investor and having promised that investor a return when the time came for the return of that investment, if he was not able to convince the investor to re-invest in another further fictitious transaction, he would seek a different investor and would use the new investment to pay off the first investment and its fictitious return."

The clients behind the action against Mr O'Brien, who have no public profile, include an 88-year-old pensioner, his solicitor son, a Co Tipperary farmer and his brother and investors who have other business interests. Their investments ranged in scale from some €450,000 to more than €4 million.

Elsewhere in his professional life, Mr O'Brien sits on the boards of real estate firm Bulberry Properties and Hawridge Properties alongside well-known business figures such as Ulick McEvaddy and his brother Des, and accountants Greg Sparks and Pearse Farrell.

There is no suggestion whatever that any of these individuals, their other co-directors or the Bulberry and Hawridge firms themselves are in any way involved in or aware of the activities attributed to Mr O'Brien in the High Court case. Mr Sparks did not return a call last night. The Irish Times was unable to reach the McEvaddys.

In his private life, Mr O'Brien has come into contact with the higher echelons of Fianna Fáil.

Minister for Social and Family Affairs Mary Hanafin was a guest at his and Ms Nagle's wedding last year and she attended a party in 2005 to mark the christening of their son. Ms Hanafin knows Ms Nagle through her father, who is active in the Lions Club movement.

Whatever the outcome of the court proceedings against Mr O'Brien, it appears that matters with some of his clients came swiftly to a head last week.

Court documents in the action against him by Rathgar-based businessman Evan Newell say that Mr Newell put €3.35 million in a bank account in June last year to enable Mr O'Brien to secure an option to buy 75 per cent of a shopping centre in Munich. Last April, Mr Newell invested a further €750,000 after he was told it was now possible to acquire an option over the entire shopping centre.

He invested a further €300,000 early last month "having been told the option had been acquired and that repayment of the money with accrued interest was imminent but that if the total funds on deposit were brought above the level of €4 million then a more attractive deposit rate would be achieved and bonus interest would accrue if the total above €4 million was left on deposit for in excess of one month".

The money fell due last Friday week. The document says that Mr O'Brien, when contacted last Monday week, said the money had in part been transferred in error to an account of his brother-in-law and that he had to travel to New York to arrange its return. After a message from Mr O'Brien's solicitor, Mr Newell realised there were "significant difficulties".

Mr O'Brien was represented in court. The matter comes before the judge again next month.