independent

Sunday 20 April 2014

Hobbs firm says it was wrongly linked to alleged Ponzi scheme

The Cork-born financial expert Eddie Hobbs
The Cork-born financial expert Eddie Hobbs

TV STAR Eddie Hobbs's property venture says it has been wrongly linked to an alleged US "Ponzi scheme".

His Brendan Investments was named in court papers filed in Detroit in relation to an alleged multi-million dollar property fraud.

But neither Eddie Hobbs nor Brendan Investments, where he is a director, are being sued, and the Irish firm says its shareholders and clients are not affected by the case.

"The directors of Brendan Investments Plc and the directors of Brendan Investments Property Management Ltd have no cause for concern about the interest of our shareholders or clients at this time," director Hugh O'Neill told the Irish Independent. Mr O'Neill moved to clarify the situation after British investor Kathryn Llewellyn-Jones and six others began legal action in a US Federal Court.

The action is being taken against Detroit-based property firm Metro Property Group and a number of connected companies and individuals, over alleged property investment losses.

No findings have been made against Metro Property Group, which is expected to lodge its own response to the claims made in the opening legal argument.

Papers filed in court include a suggestion that Metro Property established a property joint venture with Brendan Investments last year.

But Mr O'Neill said that this is wrong. Brendan Investments has done business with Metro Property, he said, and is involved in the Detroit property market.

But he said that claims made about the extent of its involvement with Metro are inaccurate.

"There are a number of inaccurate references to Brendan Investments in the filing. It should be noted that Brendan Investments is not a party to these proceedings," he said.

"Brendan Investments advises its own clients on property purchases in the US and uses Metro Property Group as one of its service providers," he added.

The case against the US firm has been taken by investors from the UK, Australia and Yemen.

They say they bought investment property in Detroit from Metro Property Group with the promise of high annual rent, based on the homes being refurbished and rented to vetted tenants.

Those lucrative rentals never happened as planned, according to claims in the court papers.

In her initial filing, lawyer Debbie Schlussel, representing the seven investors, says the entire scheme was a scam, with tenancy agreements and even an eviction faked to make it look like a better investment than it really was.

Bizarre

In a bizarre twist, Ms Schlussel even claims the case could have links to the radical Lebanese militia group Hizbollah, citing the fact that Metro Property is owned by a family of Lebanese-Americans.

Ms Schlussel is both an attorney and a high-profile commentator in the US media, including as a pundit on Fox news show 'The O'Reilly Factor'.

She has a reputation for taking a pronounced anti-Islamic stance on the show.

Irish Independent

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