Tuesday 17 January 2017

Retired garda trusted Cowen ally at centre of alleged scam

Land sold on for massive profit

Tim Healy

Published 19/01/2011 | 05:00

A RETIRED garda superintendent completely trusted a former election running mate of the Taoiseach when he invested €73,000 in an alleged land deal scam, the High Court heard yesterday.

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Peter Wheeler is among several investors suing Gerard Killally, a former Fianna Fail councillor and running mate of Brian Cowen, after the deal from which Mr Killally is alleged to have made secret profits.

It is claimed that Mr Killally, unknown to the investors, had acquired lands at Mount Lucas, Daingean, Offaly, for €4.7m and arranged a scheme under which they were sold to the investors for €10.6m in May 2007 at a time when they believed Mr Killally was a co-investor with them.

Yesterday Mr Wheeler told the High Court that he had completely trusted Mr Killally, an auctioneer, when considering in late 2006 whether to invest in the purchase of lands.

He said that Mr Killally was chairman of Offaly County Council, had run in general elections and was of good standing in the community.

He said Mr Killally assured him this was a "no-risk" investment but at no stage disclosed that he was himself the seller of the lands, having bought them from his father-in-law and others.

Mr Killally instead presented himself as a co-investor entering into a partnership with Mr Wheeler and others. He had also indicated at meetings with investors there would be no problem securing planning permission for the lands, he added.

Mr Wheeler ultimately invested around €73,000 while other investors provided sums ranging from €61,000 to €1.2m.

Advisers

Mr Wheeler, two of his brothers, six other investors and two companies are suing Mr Killally, a firm of solicitors, financial advisers and others over the land deal completed in May 2007.

The defendants include a number of people who themselves also invested in the deal and are alleged to have been engaged by Mr Killally to advise about the investment. The action opened yesterday before Mr Justice Michael Peart.

At the outset, the judge was told Mr Killally had been declared bankrupt since the legal proceedings had been taken and the Official Assignee in bankruptcy would not be participating in the case. A motion for judgment in default of defence is to be brought against Mr Killally, the court was told.

The other defendants have denied the claims against them.

It is claimed Mr Killally represented to investors that the lands were available for sale for around €10.4m from Frank Mulligan (father-in-law of Mr Killally) and Mr Mulligan's partners and that Mr Killally was a co-investor.

Ronan Murphy, senior counsel for the plaintiffs, said Mr Killally was in fact setting up a scheme to buy the lands from Mr Mulligan and partners for around €4.7m and sell them on for twice the price to a group of people of which he purported to be a part. Some €10.4m was sought for lands from both the investors and the Educational Building Society when the lands were sold, apparently for €4.7m -- itself an inflated figure as valuation evidence indicated the true value of what was sold to the investors was €3.25m, he said.

The lands were ultimately sold to the investors in May 2007 for €10.6m.

The case continues.

Irish Independent

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