The jury in the trial of a former financial services manager accused of being part of an alleged conspiracy to defraud investors in Custom House Capital has been discharged after failing to agree on a verdict.
Ciara Kelleher, 51, from Blackhorse Avenue, Dublin 7, had denied a charge of conspiring with others to defraud investors, clients, and customers of Custom House Capital (CHC) Ltd by intentionally misleading them as to where or how their assets had been placed in the investment firm.
The jury had been deliberating since last Thursday after a four-week trial, but today told the judge they were unable to reach agreement, having been given the option of returning a majority verdict this morning.
Judge Crowe thanked the jury for the care and attention they had given to what she said was a "long and complicated case".
The case has been adjourned for a week. The prosecution has not yet indicated if a retrial will be sought.
The offences were alleged to have occurred between October 2008 and July 2011.
Custom House Capital provided investment management and pension advisory services to approximately 2,000 clients.
The prosecution said Ms Kelleher was involved in a scheme to avoid some clients of CHC being aware that their money was not where they thought it was.
The jury was told the scheme was put in place within CHC in 2008 and 2009, at the time of the financial crash and that around 80 accounts were affected.
The prosecution said the scheme bore the hallmarks of a classic ponzi scheme.
CHC had agreed to buy investment properties but when values began to drop during the crash there were demands for cash transfers into the investments and money was taken from customer accounts without their knowledge.
Prosecuting counsel Lorcan Staines said it was like robbing Kevin to pay Klaus and around 80 accounts were affected.
Mr Staines said Ms Kelleher was an integral part of the scheme, which deprived CHC clients of information and had "real consequences for the people involved".
Mr Staines said it was absurd to suggest someone of Ms Kelleher's experience did not know it was wrong to issue inaccurate statements.
He said it was accepted that Ms Kelleher was a salaried employee of CHC, not a shareholder. Counsel said Ms Kelleher made "excuse after excuse" while trying to explain statements within emails shown to her by gardaí during interviews.
He said Ms Kelleher told gardaí that she thought everything was "as good as gold" in CHC between 2008 and 2011. Mr Staines said it was hard to understand how someone who worked in a financial institution at the level Ms Kelleher did could have thought this at a time when "Ireland Inc. was at risk of collapsing".
The jury also heard that High Court inspectors concluded in 2011 that €56m in investor assets, including cash and liquid equity holdings, were improperly transferred to syndicated property interests or used to finance other aspects of CHC's business. CHC was liquidated in the same year.
Defence counsel Michael Bowman told the jury that they had to be satisfied that there was no "innocent explanation" for every step of the prosecution's case.
He submitted that emails, which the prosecution say show Ms Kelleher's involvement in the conspiracy, could also show this client's concerns about outstanding issues and her requests for assistance.
His client went so far as to escalate her frustration with delays getting information from the finance department to CHC's compliance officer in early 2010, the jury was told.
Mr Bowman gave the example of an email chain over several months in which Ms Kelleher tried to establish a client's original instructions.
He submitted to the jury that these emails end with a suggestion from Ms Kelleher that is not an attempt to "grease the wheels of a conspiracy". Instead, she wanted to streamline an internal process to get questions answered quickly, he said.
He said Ms Kelleher's use of the phrase "good as gold" has been given a "grotesque and inflated meaning" out of context. He suggested that this phrase referred to his client's state of mind and understanding at that time.
Jurors considered verdict for more than three days
The jury began deliberating before lunchtime last Thursday after a trial lasting four weeks.
In his opening address to the jury last month, Mr Staines said CHC's CEO Harry Cassidy bought a large portfolio of investment properties in mainland Europe.
Mr Cassidy had entered agreements to buy large investments and was getting demands to make cash transfers into these.
Mr Staines said Mr Cassidy started to "pilfer" money from customers to pay these requests and was essentially "robbing Kevin to pay Klaus".
The court heard that around 80 accounts were affected.
He said that while Ms Kelleher was not the most senior person involved and did not personally profit, she was "up to her neck" in the scheme and seeking to improve its processes.
Mr Staines said the company "exhibited signs of a classic Ponzi scheme" in the later stages as money invested by clients was not being used for what they thought, but for another purpose.
He said it was the prosecution's case that the people who put together the scheme did so to "deprive clients of information" about their accounts.
It would have become a problem for the company if investors became aware that their money was not where they expected it to be, especially during the "worst financial property crash" in living memory, Mr Staines said.
These valuation statements had to be issued so that CHC could invoice clients.
These statements included "fictitious interest" which would have been earned by the client's money if it had been where the client expected it to be, Mr Staines said.
Mr Staines said Ms Kelleher was aged between 37 and 39 at this time, had worked for Citibank for ten years and had a degree in International Commerce and German.
He said it was the State's case that it is "absurd" that someone with Ms Kelleher's background did not think it was wrong to issue inaccurate statements.
