Developer 'scam will cost us hundreds of millions'
A FIANNA Fail senator warned last night that some NAMA developers had come up with a "scam" that could cost taxpayers hundreds of millions of euro.
Fianna Fail senator and auctioneer Mark Daly used his legal privilege in the Seanad to describe how developers were allegedly using third parties to buy back their own loans from NAMA for less than their true worth.
"This lack of transparency has been confirmed to me by people who were asked to become involved in a scam whereby the original borrower of the loan would buy back his own loan book for less than the current market value, thus causing a significant loss to the taxpayer," he said.
When contacted afterwards by the Irish Independent, Mr Daly said he had been given information on this "scam" in confidence by a person in the property industry.
He said he had not got the agreement of the person to identify the developer involved.
He added that the developer had a loan of €12m which was acquired by NAMA for €6m.
According to Mr Daly, the loan was then bought back from NAMA by the developer for €6m (using other people as a front). It was sold on for €9m -- a €3m profit for the developer and a €3m loss to NAMA and the taxpayer.
"The same golden circle who got us into this mess are now at it again," Mr Daly said.
NAMA chairman Frank Daly admitted earlier this year to the Dail's Public Accounts Committee that he could "not come in here today and say that somewhere down the road" an individual would not buy back a property they previously owned.
He and NAMA chief executive Brendan McDonagh met Mr Daly last month to discuss his concerns. But Mr Daly said he was not satisfied with their response -- and that he had now written a letter to office of the Attorney General to ask it to investigate.
"I have told them this is happening and I know people in the industry who say it is happening," he said.
In a statement, NAMA confirmed that it had met Mr Daly. "NAMA does not believe there is any substance to his claim as no evidence has been provided to back up the claim," it said.
NAMA said that the valuations it put on loans were approved by the EU on the basis of a carefully worked-out model.