The liquidator of a forest management firm at the centre of a fraud investigation has uncovered a series of money transfers, including €3.6 million from company accounts, that have made it hard to establish the state of its finances, according to a creditors' report obtained by The Irish Times.
Arden Forestry Management was put into liquidation last October under the direction of the High Court, with Declan de Lacy of accountancy firm PKF O'Connor, Leddy & Holmes appointed to oversee the process.
At the time, Arden Forestry director Garret Hevey said the firm had been put into "an impossible position" after its main bank account with AIB in Ireland was frozen as a result of a Garda investigation.
The court heard at the time that the company, set up in late 2013, had raised millions of euro from mainly UK investors over the previous three years. Mr Hevey’s affidavit, dated October 25th, said it had acquired almost 72 acres of forest sites in Co Roscommon and was in talks to acquire further lands that would have increased forests under its ownership to about 375 acres.
The liquidator said in his report, presented at a creditors’ meeting in London on Tuesday, that he has been “unable to verify” whether the firm had been involved in such negotiations.
Mr de Lacey said the company appeared to have contracted to sell more than 860 acres of forests to at least 165 investors, who paid at least €5.29 million.
Banking records show its AIB account received a total of €5.57 million, of which only €1.97 million remained at the commencement of the winding-up, he said. That account was frozen on June 13th under section 17 of the Criminal Justice (Money Laundering & Terrorist Financing) Act 2010.
From the following week, investors were asked to transfer money to a new UK company, Arden FM Limited, where the registered director and shareholder was David Peile, an Arden Forestry employee. The liquidator found that the company received £687,173 (€785,160) from investors and subsequently disbursed before account was frozen.
Mr de Lacy also found that almost 70 per cent of £182,888 investors apparently transferred from last June into a Barclays Bank account operated by a company called Spencer Fernandez Limited had also been disbursed before it was frozen. Mr Hevey owned the shares in the company from September 16th.
The liquidator is seeking to establish the nature of disbursements from both accounts and whether it is possible to recover the money.
Mr Hevey said in his affidavit in October that Arden Forestry at some stage decided to invest some funds in Spanish property and set up a firm in the United Arab Emirates, called GTD International, to do so.
The liquidator's report said the company had transferred €1.54 million to a GTD International account in Noor Bank, Dubai. More than half that amount had been disbursed before Arden Forestry was put into liquidation, while Mr Hevey subsequently arranged for a further €100,000 of the balance to be transferred to the liquidator. The liquidator is seeking court orders in Dubai with respect to the balance.
Mr Hevey, of Shankill, Co Dublin, and David Piele, a UK national also known as David Marshall, living in a rental property in Bray, Co Wicklow, were charged and appeared before two separate court sittings on February 7th in connection with alleged forestry investment fraud. Directions from the Director of Public Prosecutions need to be obtained, the courts heard, and both men have been granted bail.
A solicitor for Mr Hevey declined to comment, while a lawyer for Mr Piele did not return calls seeking comment.
The liquidator said in the report that he was “concerned not to prejudice future civil or criminal proceedings or efforts to recover assets in the liquidation” and was therefore unable at present to report certain aspects of the winding-up process to creditors.