€30m loan lawyer flees the country
Probe as fears grow that banks' and clients' funds could be at risk
Saturday October 13 2007
A HIGH-PROFILE solicitor involved in an alleged €30m mortgage fraud has fled the country.
The Irish Independent has learned that the solicitor, a property specialist who holds directorships of several companies, has also had a freezing order issued against him amid concerns that his clients' funds may be at risk.
Up to four major banks are affected by the alleged fraud in what is being regarded as the greatest legal scandal since former 'Irish Press' solicitor Elio Malocco was struck off for misappropriating almost IR£500,000 (€634,869) from his clients.
It is claimed that the solicitor re-mortgaged his entire property portfolio with each individual bank without telling them that his properties were already mortgaged.
It is understood that the properties were re-mortgaged with each bank at a grossly overvalued rate and the solicitor, who cannot be named for legal reasons, then drew down the funds before fleeing to Portugal.
Earlier this week, the Law Society, the governing body for solicitors, secured an injunction in the High Court preventing the man from disposing of his assets and taking them out of the country.
Although the banks involved face the greatest exposure, the Law Society secured the freezing order to protect his clients' accounts.
The injunction was granted by Mr Justice Richard Johnston, the President of the High Court, and is listed for hearing again on Monday.
However, the entire case will be heard in camera, with the public and media excluded from the hearing, leaving anxious investors and clients in the dark.
Clients of the solicitor are furious that the injunction was sought in secret when their accounts are potentially at risk.
Companies with whom the solicitor was involved and fellow directors are also concerned that their businesses will be adversely affected.
The Mareva injunction, a civil remedy normally sought in open court proceedings, was secured under the Solicitors Acts which enjoys the benefit of the In Camera rule.
But the matter dramatically came into the public domain yesterday when a soldier, who was being represented by the solicitor in an army deafness action, had his High Court personal injuries case adjourned.
Another solicitor sought to represent the soldier, claiming that he had power of attorney to continue the case in his colleague's absence, but this application, too, was adjourned until next week.
It is claimed that the solicitor, a married man who lives in an exclusive Dublin suburb and has an "extensive" property portfolio, overvalued the properties, allowing him to draw down funds up to three times what each property was actually worth.
The man, who has a successful commercial, conveyancing and litigation practice, is regulated by the Law Society of Ireland who refused to comment on the affair.
Last night, colleagues of the solicitor expressed shock at the alleged fraud, which only recently came to light. They described him as an ambitious lawyer and businessman with "a brilliant mind".
