Developer in fraud case told to pay €1.6m

Court told money earmarked for resort in Caribbean diverted to personal accounts

High Court orders developer Padraig O’Halloran to pay some €1.57 million damages.

High Court orders developer Padraig O’Halloran to pay some €1.57 million damages.

 


An Irish developer has been ordered by the High Court to pay some €1.57 million damages over fraudulent mispresentation, deceit and misappropriating large sums out of US$50 million (€37.8 million) paid to his companies for a luxury hotel and resort in the Caribbean that was left unfinished.

Padraig (Paudie) O’Halloran diverted to his personal bank accounts in Ireland some US$1.48 million paid to two companies in his Ice Group for the Buccament Bay resort.

Further payments of about €150,000 were made from his companies to Weddings by Franc, for his wedding in Adare Manor, Limerick, which ultimately did not take place, Mr Justice Brian McGovern found.

Further payments totalling US$258,000 were also made from Mr O’Halloran’s companies to the Irish bank accounts of his father, Donal O’Halloran, ostensibly to repay loans which Mr O’Halloran claimed were made to him by his father some years earlier, the judge said.

While Donal O’Halloran may have lent money to his son, the evidence in that regard was unsatisfactory, the judge said. The payment of those sums had no apparent benefit to either the Caribbean project or the Ice Group and the loans appeared to have been given by Donal O’Halloran to help out his son, the judge added.


Not knowingly a party
In his evidence, Donal O’Halloran presented as an elderly man in frail health who seemed somewhat confused and the court was satisfied he was not knowingly a party to any misappropriation of the plaintiffs’ funds, the judge found.

Assessing damages against Padraig O’Halloran only, the judge said he had regard to all payments that were misappropriation of funds paid by two Caribbean companies – Harlequin Property SVG Ltd and Harlequin Hotels and Resorts Ltd, owned by David Ames of Essex, England – to the Ice Group firms as a result of fraudulent misrepresentation and deceit by Padraig O’Halloran.

There was also, he noted, “persuasive” evidence Mr O’Halloran was diverting other substantial sums paid by Harlequin for other matters unconnected with Buccament Bay, including to buy a private jet, a racetrack in St Lucia, expensive gifts including a $65,000 diamond ring for his girlfriend, a quarry and renting an expensive mansion in Barbados.

While those matters were not part of the case taken by Harlequin in the Irish High Court, they were offered as evidence corroborating the misappropriation of funds, he said.


Multi-jurisdictional claim
The Irish case is part of a multi-jurisdictional fraud claim arising from the Buccament Bay project and arose after the two Ice Group companies agreed with Harlequin in 2008 to complete the resort after another firm was dismissed following issues including alleged misappropriation of funds.

Harlequin alleged, between 2008 and June 2010, Mr O’Halloran misappropriated for his own personal benefit more than US$13.5 million of some US$50 million paid to the ice Group companies for the resort and lived a “very lavish” lifestyle at their expense. It was claimed some US$2.25 million was diverted to Ireland. Mr O’Halloran denied the claims.

In his reserved judgment, Mr Justice McGovern said it was “extraordinary” there was no written contract for such a large development and that turned out to be a “very poor” decision by Mr Ames.

He found Mr O’Halloran (40), with an address at Sandy Lane, Barbados, had knowingly “or at the very least recklessly” reassured Harlequin phase one of the five-star resort would be open on July 1st, 2010, when Mr O’Halloran knew from November 2009 it would not. Mr O’Halloran was well aware Harlequin was under enormous commercial pressure to open in July 2010, he said.

After the two Ice Group companies were dismissed in June 2010, the evidence was that site was “an absolute mess”.