Two men jailed for fraudulently operating a forestry firm as a ‘Ponzi scheme’ should be personally liable for some or all of the company’s debts, the High Court has ruled.
Garret Hevey, with an address at Shankill in Dublin, was sentenced to six years in prison, while David Peile, formerly from Ballyguile in Wicklow but now based in the UK, was also jailed for a total of six years.
Judge Brian O’ Moore said that he was making orders holding Hevey personally liable for the firm’s debts and other liabilities of just over €3.8 million, and Peile liable for a sum to be determined at a later date.
Liquidator Declan de Lacy had sought the orders and declarations against the convicted fraudsters.
Hevey was a director of Arden Forestry Management and used the pseudonym James Baker, while Peile called himself David Marshall.
The company purported to offer investors a chance to make money in forestry through grant schemes and the selling of timber and forests.
The company had a virtual office on Trinity Street in Dublin.
Investors were sent a welcome pack with a false timber certificate and land folio documents endorsed by legitimate companies without their knowledge.
Detective Inspector Catharina Gunne of the Garda National Economic Crime Bureau said some investors received small sums in return, but the company was later using investors’ money to pay earlier ones, and “robbing Peter to pay Paul”.
The fraud came to light when a Finnish man came to Dublin to check on his investments.
He was shown a forest in Frenchpark in Co Roscommon, but told there was no time to visit the land registry.
Peile emailed Hevey saying “shit, he wants to visit the land registry department, how do we get over that one?”
The man was “whisked” back to Dublin Airport, but he subsequently checked the land registry himself and called in the gardaí.
In his judgement today, Mr Justice O’Moore said the company was operated in an “utterly fraudulent way” and it carried out “no genuine business and conducted no real trade”.
“The disparity between the funds it received, and the value of the forestry purchased” the judge said was “utterly jarring”.
The judge said that in light of the evidence he was prepared to make a declaration that Hevey was, while an officer of the company, knowingly a party to the carrying on of business of the firm with the intent to defraud creditors of Arden FM.
The judge said that he was making an order making Hevey personally liable for the firm’s debts and other liabilities of just over €3.8 million.
The case of Peile, who opposed the liquidator’s bid for orders against him, was “more complicated,” the judge said.
The judge said that he accepted Peile’s claims that Hevey was the “architect of the fraud,” that Peile’s involvement in the fraud “was significantly less than that of Hevey” and that there were certain things that Peile was not responsible for.
However, the judge said he was making an order declaring Peile to be personally liable for a yet to be specified portion of the company’s debts and liabilities.
That portion is to be finalised at a future hearing of the court, the judge said, adding that Peile is involved in aspects of the fraud to creditors that total approximately £509 (€595).
