Friday 23 February 2018

High-rollers lose millions in financier's failed schemes

Secret recording of angry meeting with investors

Nick Webb

Nick Webb

WEALTHY Irish businessmen have lost millions of euro in a disastrous series of United States property schemes developed by jet-setting financier Frank Duignan.

The investors, who cannot be named for legal reasons, are well known high-rollers in the motor, retail, property and financial services sectors. They invested up to €30m in three schemes promoted by Duignan through his Money Concepts group, operating from a smart Georgian building on Dublin's Merrion Square.

The schemes imploded, with investors believing many of them owned the same stakes in developments.

Investors confronted Duignan at a heated meeting in his offices in July 2010. A secret tape recording of part of the meeting has been obtained by the Sunday Independent.

The recordings reveal that Duignan told backers that some projects were a sham and that their money had been "sucked" into other schemes. He claimed that "no money came to me. It went to keeping things on the go," according to the tapes.

"Where do you think you'll spend time in prison," one irate investor asked. "Do you think you'll do it here, or do you think you'll do it in America?"

"I don't know. We'll soon find out," Duignan responded.

Roscommon-born Duignan, 46, a former accountant with Arthur Andersen, was well known on Dublin's social scene. He frequented some of Dublin's finest restaurants and associates recall his use of private jets on his visits to investment schemes in the US. A number of Duignan's companies have been dissolved in recent weeks. He is now said to be in Singapore. Duignan did not return calls to his mobile phone.

It has also emerged that Duignan was also involved with US banker Mark Conner, who was arrested by FBI agents in 2011, when getting off an airplane at Miami Airport. Conner, a former president at First City Bank, is now serving 12 years in a federal prison for bank fraud, conspiracy and perjury.

Two separate groups of investors, one Dublin-based, the other from the South coast, bought into an $18.6m distressed loans portfolio which was being sold off by Conner's bank in late 2008.

The loans were thought to have been secured on high-end residential and lakeside development land in Alabama and Florida. However, one source has described a parcel of the prime development land as being "on the top of a mountain. You couldn't even get to it in a 4X4".

Another scheme saw upwards of €20m ploughed into the creation of a "K Club"-type golf and country club in Farmville, North Carolina. A 322-acre site was bought by Duignan's investors. These included two Irish pension fund firms plus a group of high net worth individuals.

The land, close to a local university, has a small restaurant and a golf links. Blocks of land were sold off to the investors, with one Irish pensions provider investing €2m for a 30-acre slice.

However, the scheme began to unravel as costs mounted. Under threat of foreclosure, about 35 per cent of the Greenville project was sold to a US firm called Flint River Advisors LLc. Jailed banker Mark Conner was a beneficiary of this company, a court heard. This stake is now held by the US Marshal Service for the US Department of Justice.

A number of Irish investors have spent more money to retain a 65 per cent slice in the development. These investors spent about €1.2m to buy the stake – representing a massive haircut.

However, the ownership of the scheme has become clouded in controversy through the existence of a complex system of partnerships and operating companies. Several investors believe that they own other investors' stakes in the project.

Full Story, Page 5

Irish Independent

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