Thursday 26 April 2018

Jailed estate agent loses appeal against sentence for ‘Ponzi’ scheme

Niamh O'Donoghue

A former estate agent who was jailed for six years for stealing €1.6 million after he used solicitor Gerald Kean’s name to encourage 25 investors to participate in a ‘Ponzi’ scheme has lost his appeal against the severity of his sentence.

Eamonn Kelly (49), who previously owned two RE/MAX Auctioneers franchises, told investors that they could make €15,000 profit on a €50,000 investment within six months, if they purchased sites he claimed he had identified in the UK.

Kelly, of Decies Road, Ballyfermot, who had no previous convictions, pleaded guilty at Dublin Circuit Criminal Court to a number of sample charges of theft, one of producing a false instrument and one of forgery on dates between October 2007 and February 2010.

In January 2012, Judge Martin Nolan said Kelly’s crime “involved deception, severe losses to some and breaches of trust” before he imposed consecutive sentences totalling six years.

Earlier today, the Court of Criminal Appeal dismissed Kelly’s appeal against the severity of the conviction and upheld the sentence handed down by Judge Nolan saying it was a fair and proportionate one.

Sean Gillane SC, for the appellant, argued that Judge Nolan had erred as he had discretion in whether to make the sentences concurrent.

He referred to the case of garlic importer businessman Paul Begley, whose sentence for not paying duty was reduced from six years to two following appeal.

Mr Justice John McMenamin, presiding, ruled that it did not appear the judge erred in principle in sentencing for what he called an extremely serious offence.

He said the court could not disregard the circumstances of the case and that some of the people affected could not absorb the losses incurred.

The three-judge court ruled that the circumstances of the Begley case on which Mr Gillane relied were very different in that the prosecution’s case was almost entirely made out of what the garlic importer had admitted.

Kerida Naidoo BL, for the DPP, had also argued that the Begley case was different and that the money had been repaid.

Kelly forged Gerald Kean’s signature on a letter that was then sent to potential investors to encourage them to invest in a bogus property operation in Manchester.

The letter stated that the solicitor was representing Kelly and that the estate agent acted as an advisor to Mr Kean.

Gerald Kean knew nothing about the letter.

Kelly also provided potential investors with a bogus letter from the Ulster Bank in Crumlin, stating that he had €4.6 million on deposit in an account there.

The scheme involved 25 different groups from Dublin, Wexford and Donegal, whose investments ranged from €10,000 to €100,000.

Kelly told the investors that the sites could be purchased at cut prices and hotels could then be built on them, which would in turn produce a significant short-term profit.

The investors represented a cross-section of society, some of which used their recent redundancy to purchase the site, others used their savings while others were business people who have would have the means to survive despite their financial loss.

Kelly had paid commission to RE/MAX agents in both Donegal and Wexford to source potential investors but gardai accepted that these estate agents genuinely believed that the operation was legitimate.

He sourced the Dublin investors himself through his contacts with his local GAA club in Crumlin, friends and acquaintances.

The scheme finally came to light after the bogus letter from Ulster Bank came to the attention of the bank, which contacted the gardai.

Kelly made full admissions and said that he had started the scheme after he ran into financial difficulty following the property crash and was under pressure to keep up to date with his €8,000 monthly mortgage repayments on three properties in Kildare, Dublin and Portugal.

In sentencing Judge Nolan described the offence as a “classic Ponzi scheme” and said Kelly had used a reputable solicitor to convince investors that the sites in the UK would be turned into profit easily.

Judge Nolan said that Kelly had been a decent man until he engaged in this activity and found himself “totally out of his depth”.

Online Editors

Today's news headlines, directly to your inbox every morning.

Editor's Choice

Also in Irish News