Tuesday 12 December 2017

Vulture fund swoops on fraudster Breifne O'Brien

FRAUDSTER: Breifne O’Brien is serving seven years. Photo: Courtpix
FRAUDSTER: Breifne O’Brien is serving seven years. Photo: Courtpix
Maeve Sheehan

Maeve Sheehan

The jailed fraudster Breifne O'Brien is being pursued through the High Court by a vulture fund.

The one-time socialite and conman who is serving seven years for duping his friends out of millions is being sued by Stapleford Finance Ltd which is owned by one of the world's biggest vulture funds.

The finance company is a subsidiary of the US investment fund, CarVal, which snapped up €600m of loans from the former Anglo Irish Bank two years ago. Some of the loans were in the names of high net worth individuals and many of professionals who borrowed during the boom.

Stapleford has issued 38 sets of legal proceedings since late last year demanding repayment from individual borrowers. It filed legal proceedings against O'Brien in February this year but the details of the case are not disclosed.

CarVal is one of dozens of private equity firms and hedge funds that bought up distressed Irish loans at big discounts following the property crash. In recent months, investors have been moving to cash in on their investments - which means taking possession of the asset if the loan can't be repaid and selling it on.

The legal action is the latest in a raft of cases against O'Brien, who was jailed in 2014 on 14 counts of theft and deception of five investors, three of whom had been his close friends from his days in Trinity College in Dublin. He convinced them to invest in property deals in Paris, Manchester and Hamburg and a shipping insurance scheme but all of the schemes were bogus.

O'Brien borrowed from the former Anglo Irish Bank. Shortly after his scam first came to light, a High Court judgement stated that he had taken out loans with Anglo's Dublin and London offices but had defaulted on the repayments. He borrowed more than Stg£1.9m to buy properties in Reading. By February 2009, his "total indebtedness" was €2.2m "together with further interest on principal sums of €5,5m.

The IBRC - the state entity that took over the nationalised Anglo Irish Bank and Irish Nationwide - secured a judgement for €16.2m against Breifne O'Brien in February last year for loans obtained from Irish Nationwide Building Society.

The Commercial Court was told he used the money to buy properties, including in Cork and in Monkstown, Dublin. O'Brien claimed the loans were provided as a result of "reckless lending and undue influence".

The friends he duped into investing in his bogus schemes also secured judgements against him for more than €3m. O'Brien's trial for theft and deception that year heard that he used the money he stole from investors to pay for stamp duty on new properties he bought, for an extension on his house and a new car for his wife.

He pleaded guilty as his trial was due to start and was sentenced to seven years imprisonment. Gardai described his method of getting investors to transfer funds, which he would then use for other business deals and to repay other investors, had the characteristics of a Ponzi scheme.

At the time of his trial, €420,000 was recovered for his victims from assets owned by O'Brien

O'Brien appealed his sentence. He lost his appeal last December. As part of his appeal, O'Brien submitted a psychologist's report that likened his motivation to gambling, and mentioned his desire to impress others. But the judge found that O'Brien did not suffer from any known addiction. If he had, he wouldn't have been able to commit the crimes because they required the injured parties to place great trust in him.

Sunday Independent

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