Solicitors, accountants, doctors and business people are among 1,500 investors who are at risk of losing millions after the collapse of an "Irish ponzi scheme" -- Custom House Capital.
Investments given to Custom House ranged from €250,000 to several million euro and investors now face having their money frozen as a liquidator takes over to clear up the mess at the insolvent company.
In an explosive 200-page report by two High Court inspectors, it has emerged that key Custom House executives misused customers' funds, misled investors and gave inaccurate information to the Financial Regulator.
Mr Justice Gerard Hogan said the report described "a sort of an Irish ponzi scheme" and he ordered copies of the report be furnished to Justice Minister Alan Shatter, the Director of Public Prosecutions, the Director of Corporate Enforcement and gardai.
The report reveals that money was moved out of cash funds and transferred to property deals without the permission of clients. €56m was transferred to property syndicates, mainly in Germany and France. The report makes it clear there was "systematic and deliberate misuse of assets and cash" belonging to customers.
In addition, this activity was "deliberately disguised" by Custom House using "false accounting" and "misleading statements to clients".
The Custom House collapse could be one of the biggest scandals involving ordinary investors since the onset of the financial crisis.
The chief executive during this period was Harry Cassidy, a well-known figure in Dublin financial circles. Mr Cassidy was unavailable to comment last night.
A non-executive director of the company, John Mulholland, told the Irish Independent that he was not involved in day-to-day management of Custom House and knew nothing of the transfers.
Custom House investors blasted Financial Regulator Matthew Elderfield over the collapse, saying regulators should have spotted the problems earlier.
The Irish Independent understands that the regulator is to carry out an inquiry into how his office handled the affair. A report will be completed in January.
The investors are concerned at the appointment of Kieran Wallace of KPMG as liquidator, because KPMG failed to spot the scale of problems when it looked at Custom House in 2009 and again this year.
Mr Wallace was not involved in the previous inspection.
More than 1,500 investors handed as much as €500m to be managed by Custom House. In all, CHC managed €1.3bn worth of assets, because the spending power of the pension money was boosted by some €800m in bank loans.
Clients that placed money with Custom House did not invest in the company itself -- instead Custom House matched each investor to a share in large property deals in Germany and France.
The assets are owned by pension investors, not the company. That wealth is ring-fenced from the company itself so will not be caught up in the liquidation.
Despite such safeguards, there is uncertainty for thousands whose pension funds have been frozen until the unravelling of Customer House dealing is complete.
Last night, 100 of those affected hired solicitors Lavelle Coleman to represent them.
Custom House ran a high-end "wealth management" business, which was aimed at doctors, lawyers and other well heeled pension investors.