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Ex-boss of Custom House Capital to go under spotlight

HARRY Cassidy, the former chief executive of Custom House Capital, is expected to be a key witness in the garda investigation into the collapse of the investment house.

A former banker with Guinness Mahon, he joined CHC in 2000 and encouraged his clients to jump aboard the property boom by investing their pensions in property syndicates.

He pocketed a salary of €430,000 as chief executive of the investment house, in return for advising a stable of well-to-do clients. For those who wanted bigger returns for their buck, property seemed a safe bet -- at least during the boom.

When the bubble burst, and his clients became wary of investing in bricks and mortar, Mr Cassidy allegedly continued using clients' money to shore up the crumbling house of cards.

The 55-year-old resigned in July when the Central Bank concluded that his clients' funds were invested in property syndicates without their authorisation.

Mr Cassidy himself told the Central Bank inspectors during their inquiry how "there was a hope and an expectation that we would get ahead of the market and we would get the property sold. But that hasn't happened".

Investigators found there had been "improper transactions" relating to €56m in client funds. A further €10.4m is owed to clients on an investment bond. In the High Court, Judge Peter Kelly said the inspectors report described a sort of Irish Ponzi scheme .

CHC has been liquidated and Mr Cassidy has not worked since his resignation last summer. Mr Cassidy's Russian wife, Elena, and his son set up their own business in January.

Meanwhile a file on the affair which contains evidence of "possible criminal acts" was forwarded to the Director of Public Prosecution and is now under active investigation by the Garda fraud squad.

Clients of Custom House have had their accounts -- including pension funds, cash deposits and other investments -- frozen until the liquidator, Kieran Wallace of KPMG, completes his work. His main task is to track the money and clients will have an anxious wait.

They have been told it could be March before the liquidator finds out how much of the money misappropriated by the firm has been lost.

The Investor Compensation Company also put advertisements in last Thursday's papers telling clients of Custom House Capital that they may be eligible for compensation and the deadline for applications is March 23, 2012.

Sunday Independent