Court told of $13m used for 'lavish lifestyle'
A developer unlawfully diverted over $13 million for his own benefit and “lavish lifestyle” out of some $50 million intended for the development of a luxury resort in the Caribbean, it has been claimed before the High Court.
Pádraig O’Halloran used some of the money to buy properties, a private jet, a grand piano for his girlfriend and also paid €120,000 to Weddings by Franc, the wedding organiser featured on TV.
Referring to the 2009 purchase of a jet, Paul Gallagher SC, for the plaintiffs, said Mr O’Halloran (42) was swept up “in the feeling of the times” and got ideas “wholly unsuitable” for what he was engaged in. It is alleged various payments were made by a company of Mr O’Halloran’s, Shippool, Innishannon, Co Cork, to Irish bank accounts.
Harlequin Property Ltd and Harlequin Hotels and Resorts Ltd, owners and operators of a luxury resort in Buccament Bay, St Vincent and the Grenadines, have also claimed Mr O’Halloran used their money to buy a property in Ireland; properties and businesses in the Caribbean; a $1.5 million private jet, a grand piano, dental work and other items of personal expenditure.
In proceedings that opened yesterday before Mr Justice Brian McGovern, Harlequin is claiming restitution, damages and compensation for alleged breach of fiduciary duty over the alleged Irish payments and transfers into Irish accounts.
In 2008 Harlequin engaged Mr O’Halloran and his construction company, the ICE Group, to complete construction of a multimillion dollar tourist development in Buccament Bay, including villas, a restaurant and swimming pool, by July 2010.
It is claimed Mr O’Halloran had a duty to act honestly and in good faith and not to defraud Harlequin or make a secret profit. It is claimed he falsely represented the entire construction project would be complete and open for business on July 1st, 2010, when he knew the ICE Group could not complete the project.
Mr O’Halloran, it is alleged, was intent upon embarking on a fraudulent scheme to divert project funds to his own personal benefit.
It is claimed about $13.3 million paid by Harlequin was unlawfully diverted by Mr O’Halloran for his personal benefit, including payments of $1.6 million to Mr O’Halloran’s bank accounts in Ireland and some $358,000 to his father’s Irish bank. It is also alleged that from November 2009 to March 2010, there were $72,000 and €120,000 payments to Weddings by Franc and €20,000 to Adare Manor.
Mr O’Halloran, it is claimed, purchased a house at Shippool, Innishannon, funded directly or indirectly from the payments. That purchase, the Caribbean purchases and the Irish payments were part of a systematic and deliberate fraud, it is alleged.
Mr O’Halloran has denied the claims and says the payments in relation to the Caribbean were all appropriate.
The proceedings are also against his father, retired businessman Donal O’Halloran, Ballinaspig, Cork, who, it is claimed, ought to have known alleged payments made to him was money to which he had no lawful entitlement.
Opening the case, Mr Gallagher said Pádraig O’Halloran engaged in deliberate and serious fraud and made fraudulent representations to Harlequin to extract substantial sums of money to complete phase one of the development when he knew he could not do so by the agreed deadline.
Greater and greater sums of money were demanded with no prospect of the work being completed, he said. When Harlequin inspected the development in July 2010, some parts had complete landscaping but it was like a “film set”. The drains were not installed for the villas and the sewage from the toilets went straight into the ground, he said.
Mr Gallagher said there was an “extraordinary informal arrangement” for such a significant contract in which a total $51 million was paid out by Harlequin. The weekly payments rose from $125,000 to $450,000 and later $1 million in 2010.
The case is listed to last four weeks.