Luxury property in Lanzarote not declared when Dublin court made ruling
A couple who had millions of euro written off under personal insolvency arrangements did not reveal they were the registered owners of a luxury foreign property when their debt deals were approved by the High Court.
Spanish land registry records name medium and convicted thief Tom Colton (46) – better known as “the psychic swindler” – and his wife Linda (45) as owners of a plush villa in Lanzarote, an investigation by the Irish Independent has found.
The five-bed property with a private swimming pool and hot tub in Playa Blanca was purchased on September 1 last year, a fortnight before they both swore prescribed financial statements outlining their assets and liabilities.
But these statements did not include any reference to the villa they had just bought.
The husband and wife, from Celbridge, Co Kildare, who run a business providing “spiritual” wedding ceremonies, went on to have debts of €2.7m and €2m written off respectively by the court last February.
The property, known as Villa Penguina, was extensively renovated after it was purchased and is currently being rented out to holidaymakers for up to €2,400 a week.
If it is found details of the property should have been declared this could have serious ramifications for the Coltons, including the loss of their personal insolvency arrangements.
Under the Personal Insolvency Act, debtors are obliged to make full disclosure of all assets, income and liabilities to their personal insolvency practitioner, as well as all other circumstances likely to have a bearing on their ability to make payments to creditors.
Failure to make full and frank disclosure is considered a serious matter. But Colton, a former accountant who spent time in prison for stealing over €320,000 from an elderly couple, has insisted he and his wife did not mislead their practitioner or the court.
Contacted by the Irish Independent, he claimed they were not the beneficial owners of the property and were acting as trustees for a beneficiary.
However, the existence of a trust agreement, as claimed by Colton, is not reflected in land registry records.
Colton refused to identify the beneficiary he claimed he and his wife were acting as trustees for. He also refused to provide a copy of the trust agreement, but insisted he was telling the truth.
The holiday home is thought to have been purchased for around €290,000 but would be worth between €400,000 and €420,000 now, following refurbishment works.
Land registry documents identify Tom and Linda Colton as 50/50 co-owners and state it was purchased with a mortgage of €178,500 from a Spanish bank.
“We do not own the asset, hence why they are not on our declarations and should not be,” Colton said.
“We provided our bank statements, our income information and tax returns and any other information that was required and requested to complete the statement with all of our personal assets and liabilities as we are meant to.
“The beneficiary owns the asset and is entitled to all income, responsible for all expenditure and has full rights of the property and directs any matters in relation to the property. We did not pay for the property, we did not pay to fit it out, the beneficiary did.”
After the issue was raised by the Irish Independent, the Coltons’ personal insolvency practitioner Eugene McDarby said it was the first time he had been made aware of the property and that he would conduct immediate inquiries.
“Depending on the outcome of those inquiries I will take such further or other steps as may be deemed appropriate, including bringing the issues to the attention of all creditors, the court and/or the Insolvency Service of Ireland, as advised by my legal team,” Mr McDarby said.
“The insolvency process operates on the basis of full and frank disclosure from borrowers and on foot of a prescribed financial statement that is sworn by each debtor via statutory declaration and provided to the court in each and every case.
“All financial information must be fully and truthfully disclosed on the prescribed financial statement.”
A former accountant, Colton claims to be a medium who can communicate with the dead. He was jailed in 2015 for admitting to one count of stealing €322,070 from Co Monaghan couple Hugh and Mary McNally while acting as their accountant in 2005.
He was instructed to make a payment to the Revenue Commissioners on their behalf but instead diverted funds to a company in the US.
Colton was dubbed “the psychic swindler” in news reports following his imprisonment.
Despite the conviction he remains registered with the Department of Social Protection as a solemniser of marriages with the Spiritualist Union of Ireland.
He has also been able to maintain his position as a prominent referee with Leinster Rugby, taking charge of underage and lower level adult games in the Dublin area.
Colton previously ran a limousine business and was involved in a failed $600m property development on the Caribbean island of St Lucia in the mid-2000s.
The personal insolvency arrangements secured by him and his wife in February allowed them to keep their family home. The arrangements reduced a €695,000 debt secured against their house to its market value of €640,000, with the mortgage being restructured and extended to 22 years.
In his prescribed financial statement, Colton declared an interest in buy-to-let properties in Dublin and Obidos in Portugal, both of which are to be sold for the benefit of creditors under his debt deal.
Before the arrangements were approved, Colton had total debts of €4.3m and his wife owed €3.1m to creditors.
Several debts were common to both of them and included borrowings from relatives.
The High Court heard creditors would receive less of a return if the couple were made bankrupt.