A judge will read 197 victim impact statements before sentencing four senior executives of collapsed investment firm Custom House Capital on charges connected to a €61m conspiracy to defraud investors.
Three men, the company's CEO, Harry Cassidy, 67, its former head of private clients, John Whyte, 53 and its former head of finance, Paul Lavery, 47 have pleaded guilty to a conspiracy to defraud investors by intentionally misleading them about where and how their money was invested.
John Mulholland, 73, who was a non-executive director of CHC, pleaded guilty to neglectfully discharging his duty as a director in relation to the commission by the company of acts of dishonesty by deception.
The offences took place between October 2008 and July 2011.
Prosecuting counsel, Lorcan Staines said CHC had invested in a large portfolio of investment properties in mainland Europe as the property market in Ireland began to slow down.
The company put deposits of 10% to 20% on these properties with agreements to complete the purchases.
However, when the financial crash hit in 2008, CHC did not have the money to complete the transactions so began to use its clients’ money to pay for the foreign properties, without the knowledge or authorisation of the clients involved.
The majority of the clients had invested money with CHC in order to fund their retirements and were given valuation statements every six months to show where their money was invested and how it was performing.
The accounts would be altered before the statements were given to the clients and the valuations would purport to show the money where the client believed it to be as well as a record of any interest due to them.
As soon as the valuation was issued, the accounts would be altered again to reflect that the money was actually being used for investments the clients did not know about.
Mr Staines said €61 million of the client's funds had been misappropriated. The latest information from the liquidator of CHC, Kieran Wallace, was that around €41m had been recovered.
He said there had been a considerable delay in distributing any assets that had been recovered.
Mr Wallace in an earlier report on the matter said the misappropriation had significant adverse impacts for clients who had to endure a large part of their retirements without their hard-earned savings invested in good faith with CHC.
One client who had almost €994,000 in assets had been able to recover just over €131,000, which included compensation for his losses.
Mr Staines said 197 people had given victim impact statements to the prosecution. Four of those victims gave evidence to the court.
Catherine Heron told the court her husband Patrick had died in 2014 because of the stress of losing their savings.
She said they ran a small window cleaning company and had to let staff go. She and her daughters had witnessed Mr Heron crying because of stress and he carried that stress until his death.
She said she felt he was with her in the courtroom.
Nick Coy said he hoped his aunt, Helga, who was born in Germany but married an Irish man did not know that her savings had been stolen before her death at the age of 92.
He said she had requested him to deal with any matters relating to her investment. But he did not tell her about the collapse of CHC in the hope her money would be recovered.
He said the second world war had destroyed many things in her life but the CEO of Custom House Capital, Harry Cassidy had done more damage to her.
He was now 75 and he told the court he had spent sleepless nights trying to come to terms with the secrets and lies he had to carry, trying to protect his aunt from the reality of a life stolen and destroyed.
78-year-old Patrick Elliott, said he had never recovered from the devastating financial impact of losing the savings which represented the 40 years he and his wife had worked together in their business.
He said he had been left penniless and solely reliant on the State pension.
The financial impact was devastating but the emotional and psychological impact was even worse he said.
He was left with depression and felt guilty for failing to provide for their old age.
He told Judge Orla Crowe it was wonderful that she was seeing the people damaged by the offences and able to hear in their own words what they had suffered.
Mr Staines read a sample of further victim impact statements in which investors talked about their stress and their day-to-day struggle to keep their heads above water.
One person said getting sued had put him and his family under terrible stress and at one stage he felt like giving up.
Another man said the stress had wrought havoc on his health with sleepless nights, depression and memory loss.
A widow said Mr Cassidy and Mr Mulholland assured her money would be safe after her husband died but she instead her account had been plundered to prop up ailing property investments without her consent.
She did not want to be wined and dined like some other "high net worth" clients, the woman said, she just wanted enough money to last her.
She said she had not lost everything unlike some other people but she had to abandon plans for her home, her children and her grandchildren.
The judge said she would read all the victim impact statements.
Detective Inspector Alan Govern gave evidence that the Central Bank was informed of problems at Custom House Capital in 2009 by a former employee of the company but the unauthorised taking of clients’ funds for overseas property investment went on for almost three years until July 2011.
He agreed with Counsel for Harry Cassidy, Hugh Hartnett that, the misappropriation of money was not done for the purposes of enriching themselves but to try to keep the company afloat.
Asked by counsel for John Whyte, Garnet Orange, if there was a "fetish" for investing in property at the time, Mr Govern said it was "ultimately down to greed".
He agreed with Mr Orange that many of the employees of the company had identified an "overdominant CEO" as a significant problem at the company.
Detective Inspector Govern also agreed with Paul Lavery’s defence counsel, Mark Mulholland, that there was a toxic environment in CHC and a former employee had told them about a physical and verbal assault on Mr Lavery by Mr Cassidy.
In mitigation, Mr Hartnett told the court Harry Cassidy had to sell his home and was in rented accommodation.
He had recently received a notice of eviction.
He was earning a small salary as a teacher of English as a foreign language and had not enriched himself by his behaviour.
Instead, Mr Hartnett said, he had beggared himself. He told the court Mr Cassidy had significant remorse for those who had suffered and apologised to them.
On behalf of John Mulholland, Seán Guerin SC said he had been given instructions to apologise on his behalf for his failings as a non-executive director and the consequences visited on the victims.
He pointed out to the court that the regulator had information available to him on what was going on at an early stage.
Mr Guerin said Mr Mulholland looked "every one" of his 72 years "and possibly more".
He said he had been personally and financially devastated by what had happened and was suffering from serious ill health.
He suggested imprisonment would be particularly hard on Mr Mulholland.
Garnet Orange told the court that Mr Whyte acknowledged he had duties to protect funds that he had utterly failed to live up to.
But he stressed that Mr Whyte did not benefit financially from what had been done.
And when he realised the full extent of the fraud he had started liaising with the authorities and had given full statements to gardaí. He had repeatedly expressed his remorse, Mr Orange said.
On behalf of Mr Lavery, Mark Mulholland said he had written a letter of apology in which he said he appreciated his guilty plea was of little comfort to the former clients of CHC and offered an unreserved apology to them.
In the apology, Mr Lavery said he could not comprehend the scale of the stress caused to them.
Mr Mulholland said Mr Lavery had born a heavy burden over the last decade in terms of his responsibility in this matter.
He was in his late 20s and early 30s when these events occurred and bullied verbally and physically in a toxic environment.
Mr Mulholland said Mr Lavery was ill-suited in personality and experience for the position he was placed in.
The court heard there is no maximum sentence set down for the offence of conspiracy to defraud.
Mr Staines said the maximum sentence that could be imposed on John Mulholland was five years.
But he said the court was "at large" in relation to the conspiracy charges.
Lawyers for Mr Cassidy and Mr Whyte suggested the maximum for the conspiracy charge should also be five years.
Judge Crowe said she would sentence the men on 12 May.
