Investments with missing broker `dissipated'
The Garda Bureau of Fraud Investigations inquiry into missing Dublin stockbroker Mr Brian Kilbane is understood to have identified investments of more than £100,000 which cannot be accounted for.
The investigation into the broker's activities is understood to be nearing completion and a file will be sent to the DPP. Mr Kilbane is believed to be outside the jurisdiction.
It is understood funds invested by a small number of clients were used in a "rob Peter to pay Paul" exercise which went badly wrong and led to the dissipation of the money.
At least some of the funds were placed in the broker's own account with First Active and cheques from that account then used as purported returns from the clients' investments. In some instances Mr Kilbane would personally deliver the monthly cheques.
Investors were told their funds had been pooled and placed offshore. Where the funds had in fact been placed is not yet clear though it is understood Mr Kilbane operated a number of bank accounts.
Last month the Circuit Civil Court made permanent an order freezing the assets of the Ranelagh-based broker. The order was sought by Ms Bernadette Donnelly, a shopkeeper, of Charlemont Mews, Charlemont Street, Dublin, ordering Mr Kilbane not to reduce his assets below £25,000.
A similar order has been made against Mr Kilbane's company, Eastgrange Investments Ltd, and the court has noted an undertaking from Ms Lisa O'Reilly, secretary, of Kerdiff Avenue, Naas, Co Kildare, not to dissipate her assets below £25,000.
Ms O'Reilly, who was stated in court to be a former girlfriend of Mr Kilbane's and a director of Eastgrange Investments, has denied ever having been a director of the company or having any knowledge of it or the nature of its business.
Ms Donnelly is suing Mr Kilbane for £20,000 plus interest which she says she is owed. No other former investors have as yet taken action to have their funds returned. It is not clear whether any assets exist.
Mr Kilbane was not a member of the Irish Brokers' Association and his business was not covered by its compensation scheme. He was also not on the register of authorised investment intermediaries kept by the Central Bank and was, therefore, in breach of the Investment Intermediaries Act.
Investors were being told in April 1997 that a return of 8.125 per cent for a £10,000 six-month term account could be achieved, at a time when Bank of Ireland was offering 2.75 per cent.
The Director of Consumer Affairs, Ms Carmel Foley, has said the case underlines the need for vigilance on the part of the public when dealing with brokers. She advised people to be careful to deal only with legitimate advisers and to make out cheques to the institution they were intended for.
The Central Bank has advised people making investments through brokers or small investment firms to check with it to ensure the broker or firm is an authorised investment intermediary.