Two men, one with an address in Shankill and the other in Wicklow town, ran a 'Ponzi scheme' in which they induced dozens to invest over €5 million in a forestry investment scam, a court has heard.
Garret Hevey (43), Brookdene, Shankill, and David Peile (42), Avondale Court, Ballyguile, Wicklow, were involved in Arden Forestry Management (Arden FM) between January 2014 and mid-2016 during which 143 foreign investors were induced to deposit approximately €5.5 million into the company's accounts.
Piele previously had a Bray address.
Detective Inspector Catharina Gunne told Dublin Circuit Criminal Court last week that these investments would have required around 858 acres of land to be serviced but the company only owned 30.2 acres of land when the fraud came to light.
The court heard that in company documentation sent to investors, Hevey used the pseudonym James Baker and Peile went by the name David Marshall. Hevey was in charge while Peile was second in charge and there were a number of others employed in trying to attract investors.
Accounts linked to the firm showed that out of a figure of €501,332 transferred to Hevey, €281,613 of this was spent on Google Ads.
Gardaí began investigating the company in June 2016 when one investor, Kari Wahlstrom, discovered that Arden were not the registered owner of the land he had invested in.
Mr Wahlstrom, a Finish national, had invested €52,000 in February 2016 and in May he contacted the company and asked to visit what had been identified as his investment. He also asked to be taken to the land registry.
On May 17, 2016, Peile emailed Hevey saying 'sh*t, he wants to visit the land registry, how do we get over that?'
Insp Gunne told the court the victim did visit Ireland and met Hevey and Peile.
He was taken to a forest in Frenchpark, County Roscommon, and was happy with it but when he asked to go to the land registry office he was told there was no time.
On returning to his home in Greece, he carried out his own inquiries with the land registry and was 'dismayed' to find the land registered to someone else, Insp Gunne said.
Hevey, who set up the company in November 2013, pleaded guilty to dishonestly inducing investment in Arden FM between January 1, 2014 and June 13, 2016.
He also pleaded guilty to three charges of inducing individuals by deception to make payments on dates between September 2015 and May 2016.
The court heard that Peile joined the company in 2015. He pleaded guilty to dishonestly inducing investment in Arden FM between January 1, 2014 and June 13, 2016 and pleaded guilty to two charges of inducing individuals by deception to make payments on dates between September 2015 and May 2016.
Insp Gunne told Dominic McGinn SC, prosecuting, that investors received a welcome pack which promised returns on their investment on the basis of income received from government grants, thinning of the forest and potential future sale of the forest.
Det Insp Gunn said there was in fact only 32 acres of forest that was purchased for €61,000 and the company was not eligible to a grant as the trees were older than 20 years old. The grant was only available in the case of forests planted in the last 20 years.
She confirmed that the company was incorporated in November 2013 and Hevey was one of the directors. A main bank account was opened in January 2014.
Det Insp Gunn said investors received a total of €271,000 in pay outs and when the company account was ultimately frozen by gardaí as part of their investigation, a total of €1.98 million remained in the bank account. She said that €1.5m was transferred from Arden to a bank account in Dubai, of which both defendants were beneficiaries. After a freezing order was placed on the Arden FM Ltd account, Peile opened up an account with Barclays bank. A further €817,000 was lodged to this account by 35 investors who had tried to lodge to the frozen account and were given details of the second account.
The court heard that a virtual office was set up on Trinity Street in Dublin city centre and Hevey arranged for any mail addressed to this office to be re-directed to his home.
Det Insp Gunn disagreed with Sean Guerin SC, defending Hevey, that she was wrong about describing the offence as a Ponzi scheme and suggested that the evidence is not consistent with that description. 'I will just say that the same parcel of land was sold over and over again to investors, so I believe and I stand over the fact that I was investigating a Ponzi Scheme,' Det Insp Gunn replied.
Det Insp Gunn agreed with James Dwyer SC, defending Peile that his pleas of guilty were 'very valuable pleas' as a trial could have 'run for weeks and weeks' and all of the investors would have had to be flown in to give evidence.
Judge Melanie Greally adjourned the case for mitigation to be heard and remanded both men on bail. A date of May 4 was set for mitigation to be heard.