Solicitor arrested during “boiler house” gold mine investment fraud
Published 14/07/2014 | 18:47
A Dublin solicitor under investigation by the Law Society was arrested in London three months ago in a raid on an alleged "boiler house" fraud operation in which people were cold-called to invest in a "worthless" Californian gold mine, the High Court heard.
Last November, Brendan J Looney, Mespil House, Sussex Road, Dublin, undertook to the court to provide books and accounting records to the Society following a complaint from a client.
Very little was provided but Mr Looney then said he had been diagnosed with bi-polar condition and he was working towards putting order on is practice, Law Society investigating accountant Rory O'Neill said in an affidavit.
The Society's own psychiatrist found he was not suffering from a bi-polar affective condition but had symptoms consistent with the onset of an "adjustment disorder" which pre-dated the issues for which he was under investigation, he said.
He had no solicitor's practising certificate for 2011 and 2012, he said.
Mr Looney had previously made a declaration that he did not hold any client monies and would tell the society if he received any such monies which would be handled by another solicitor. Without a practising certificate, he was not entitled to carry out any of the functions of a solicitor including holding clients' money.
Last April, Mr O'Neill learned Mr Looney had received €100,000 from the settlement of cases on behalf of clients. Mr O'Neill also concluded he (O'Neill) had been misled as to the existence of a client bank account and that both his personal and client accounts had not been operated in accordance with solicitors' regulations.
Mr O'Neill also concluded there were potential liability in relation to four clients totalling nearly €88,000.
Last April, Mr Looney, through his legal advisors, told the Society's regulation and practice committee that progress was being made in terms of providing explanations and paying money back to clients.
However, on April 24 last, the City of London Police informed the Society they had arrested Mr Looney during a raid on an office in the city in which a group of salesmen were cold calling people stating they were aware of an opportunity for them to buy rights in a gold mine worth US$36m found in California.
Prospective investors were told the find would be the biggest in US history but a Fraud Squad detective believed it ot be "worthless Californian gold", Mr O'Neill said.
The office was shut down and Mr Looney was released on bail. He is due to re-attend the UK next week although the court heard yesterday it was not clear whether he is on police or court bail.
He has instructed a lawyer there to defend him on the basis he believed the firm involved was a bona fide investment company.
Yesterday, Paul Anthony McDermott BL, for the society, seeking Mr Looney'ssuspension, said this was an alleged "boiler house fraud" and Mr Looney was arrested when police raided the office from which it was being conducted.
While the society had dealt with Mr Looney previously on the basis of undertakings, it was now seeking orders from the court rather than undertakings from the solicitor, Mr McDermott said.
Robert Beatty BL, for Mr Looney, said he client wanted time to put in a responding affidavit to the Society's claims. He also needed more than the seven days the Society was giving him to provide it with accountants reports for the years 2011 to 2013, counsel said
Mr Justice Nicholas Kearns said undertakings in relation to books given last year to the court by Mr Looney had not been complied with.
The judge was prepared to make the orders sought including that he be suspended until he had fully complied with solicitors' regulations. He was prepared to give him eight weeks to provide the accountants' reports.