The brief evidence heard this week indicates that Tony Taylor, the disgraced former investment guru, was misusing clients' funds since 1989.

People who have investigated his affairs believe the mismanagement of money he was entrusted with may go back much further.

Taylor set up his investment business in the 1970s. Central to his success was word of mouth - satisfied customers telling other people of the above-average returns Taylor secured for them.

In some instances, however, the above average "returns" was based on Taylor using other clients' money to issue "dividends" on capital handed over - but which had in fact disappeared.

Taylor was a keen golfer and some of his 17 "personal" clients who were to lose money are understood to have been people who approached him informally in the Grange golf club in Rathfarnham in Dublin.

The picture which emerges is one of some confusion rather than a cold and well-organised operation.

In one instance, a trader in the south city area of Dublin invested the money he received from the sale of his premises with Taylor. Every six months the man would receive a dividend which his son, a professional with knowledge of the financial world, believed was suspiciously high.

When the bubble burst and Taylor's investment group collapsed, no record could be found of the trader's investment.

No trace could be found of the money given to Taylor, though the dividends paid out by Taylor to the trader came from Taylor group accounts.

However, when his overall experience with Taylor was examined, it was found that the dividends he'd received were greater in total than the amount originally invested.

"Taylor had been boasting he could outperform the banks and that brought the business in," said a source when asked why Taylor might have acted like this.

In other words he was misusing clients' funds to bolster the reputation which was the backbone of his business.

Taylor knew that some of the people he was dealing with had money which they did not want to come to the attention of the authorities. Sources say he also knew that such people would not go to the Garda if they found out their funds had been mismanaged. They were like fodder to him.

Taylor was the top of the heap in terms of the investment community, a senior figure who was considered an investment guru. Taylor's standing was such that he advised the government in relation to the 1995 Investment Intermediaries Act, the key legislation regulating the investment community.

His reputation was at the heart of this success and sources say it was probably a reputation he himself believed in, despite the fact that some funds he'd been entrusted with had been lost, and others were being used to cover up for this fact. He was robbing Peter to pay Paul.

While such a description of what happened is more benign than to say he was robbing his clients to line his own pockets, one party affected by his fraud said this week it amounted to the same thing.

Taylor and his wife, Shirley - who was a fellow director but who sources say is believed not to have known what was going on - lived in a detached house on Anglesea Road, Ballsbridge, and drove two expensive cars, a Mercedes and BMW respectively.

The group seemed a successful one, with 1,200 clients investing some £30 million. When the group collapsed these people's money was secure, but 17 personal clients who had invested £1.7 million had lost everything.

Taylor kept personal clients' records in his house, though some documentation in relation to some of these clients' affairs also existed in the group's offices on Clyde Road.

By April or May 1996 it is understood there were people who were concerned about Taylor's operation. When some started to ask questions about their accounts and sought to have their investments returned, the word spread. One source said this week that the grapevine in the Grange golf club now began to work in reverse, with people spreading the word that they were taking their money out of Taylor's operation.

Taylor, seeking to keep the show afloat, targeted accounts which were longer-term or "dormant" - accounts he believed he could tamper with and not be caught for some time. Perhaps he believed that, given time, he could trade his way out of the situation. He did not, however, as one source pointed out, choose to sell his house or one or both of the cars.

On Tuesday, August 6th, 1996, Taylor told a member of staff to wipe new business names off the computer system. He did not know that a backup existed, which would later supply the liquidator and the authorities with a precise list of all that had been deleted.

Later the same afternoon, Taylor asked the same staff member to begin shredding documentation in relation to new customers going back to 1989, an indication of how far back he wished to destroy traces of what he'd been up to. The woman expressed concern but was told to do as requested.

She initially put the shredded documents in clear plastic bags but Taylor told her to put it in black ones. By midnight she had filled 15 to 20 bags. When she'd expressed concern Taylor had told her that an inspector from the Department of Enterprise, Trade and Employment, appointed under the Investment Intermediaries Act, was due to visit the premises. Taylor also told her not to come to work the following day until he telephoned her and gave the all clear.

On August 9th, Taylor met with the inspector, Mr Martin Cosgrove. A further meeting was scheduled for the 12th but Taylor didn't attend. On August 11th Taylor and his wife flew to London, telling staff they would be away for a while and leaving their dog, Harvey, with a member of staff. They had run away.

When the inspector, the Garda and the liquidator, Mr Paddy McSwiney moved in, the truth behind Taylor's reputation was soon laid bare.

The case received huge publicity and led to a review of regulation of the investment sector. The Garda Bureau of Fraud Investigation, following receipt of an official complaint from the Society of St Vincent de Paul, which had lost £185,000, began what would be its largest investigation to date. A number of other clients of Taylor's came forward but the owners of more than half of the money lost did not. Presumably they had their own reasons.

The Garda investigation led to bank accounts here, the UK, Jersey, the Isle of Man and Luxembourg. Once they had put as much of their case together as they could, official requests, via the Department of Foreign Affairs, were made to these jurisdictions for court applications for the discovery of information. One source said the fact that such a popular charity was involved meant the case was dealt with sympathetically.

However, it was a slow process involving thousands of pieces of paper and a number of differing legal systems. Meanwhile, the media speculated as to Taylor's whereabouts. The Garda, however, are understood to have felt comfortable that they could find Taylor when they time came.

They did not want to make an approach to him until they had their case prepared and were happy as long as Taylor remained in the UK. If Taylor became unduly alarmed, and fled to somewhere such as the United Arab Emirates, as UK fraudsters have done, their job would have been made much more difficult. It is understood that Taylor and his wife made basic errors which made it easy for the Garda to know their general whereabouts. When the dog, Harvey, was brought to the UK via Northern Ireland, the Garda learned of that also.

By August 1999 the case was near completion. Meanwhile, parties representing investors who had lost money but had not made an official complaint had hired private investigators to track down Taylor. When they found him the Garda were informed, causing the Garda to have to rush the final part of their operation in case Taylor became aware he was being watched.

Warrants were secured and rushed to Britain. When members of Britain's National Crime Squad set up a watch on 9 Wrestwood Avenue, Eastbourne, they noticed the private detectives monitoring the house and warned them off. On August 1th, 1996, at 3.25 p.m. the police knocked on Taylor's door and informed him he was under arrest. Taylor, who associates say becomes cooler and cooler the greater the pressure on him, invited the police inside.

Taylor decided he would contest his extradition and was held in custody in the UK pending the hearing. However, in January 2000 he decided to drop the case and come home to face the music.

He was taken into custody in Gatwick Airport by Detective Inspector Kevin Monks, the chief officer in the case, and escorted home. Because an extradition warrant is based on a case which is ready to go to court, Taylor was not interviewed.

Taylor was contesting the 13 charges against him and was held in prison in Dublin pending his hearing. It was expected that more than 60 witnesses, many of them bankers from abroad, would be called and that thousands of exhibits would be involved. The case was expected to take up to 10 weeks.

Last week Taylor changed his mind in relation to the plea. His legal team approached the State's legal team and said Taylor would be willing to plead guilty on charges concerning four of the five official complainants involved in the charges.

He was not offering to plead guilty in relation to the St Vincent de Paul charges - which would be likely to lead to a longer term of imprisonment than the others. Given the complexity of the case, which would be heard by a jury, it was decided by those involved to accept Taylor's plea of guilty in relation to charges concerning the other four complainants, plus a charge under the Investment Intermediaries Act concerning the destruction of documentation.

When Taylor appeared in Court number 8 in the Four Courts on Wednesday he looked shaken and pale. He kept his face immobile but for the skin around his eyes, which twitched nervously each time he blinked. To each charge he responded with the word "guilty". It was the only word he spoke out loud during the hearing. Judge Elizabeth Dunne sentenced him to five years. When he was being led away he nodded to Dec Inspector Monks and Dec Superintendent Willie McGee, but did not smile.

Because his time in custody since August 1999 is being taken into account, Taylor could be released by Christmas of next year. He is being held in Arbour Hill Prison, in Dublin.