Custom House Capital trial

By Eimear Dodd

A non-executive director of Custom House Capital told the firm’s senior management team that €60,000 from his pension fund was used to credit a client account and avoid them going to the regulator, a jury has been told.

Transcripts of two further interviews given by Ciara Kelleher of Blackhorse Ave, Dublin 7 to gardai following her re-arrest by appointment on January 29, 2020, was read to the jury on the ninth day of the Dublin Circuit Criminal Court trial last Friday (10th) in relation to an allegation of conspiring with others to defraud investors in Custom House Capital (CHC) over a decade ago.

During these interviews on January 29, 2020, gardai asked Ms Kelleher to comment on a series of internal emails and reports.

These included a chain of emails from 2010 about to the use of €60,000 from the pension fund of John Mulholland, non-executive director to credit an unhappy client’s account and reverse a property transaction.

In these emails, Mr Mulholland told John Whyte, CHC head of private clients, and CHC CEO Harry Cassidy, that he felt no error had been made, but he took the money from his pension to “remove this difficulty from CHC’s book”, and avoid the client going to the regulator.

Gardai suggested to Ms Kelleher that it was common knowledge within CHC that there was “trouble with the regulator”.

Ms Kelleher said she wasn’t told about this discussion or aware of issues within the company.

Ms Kelleher also told gardai that it was “farcical” that they would think CHC’s senior management would confide in her.

“I was not brought into some secret circle”, she said, noting there has been a “cloud” over her for ten years.

Ms Kelleher said she took it that other teams were carrying out their specific roles and didn’t assume their actions were criminal.

She said “90%” of valuations worked  fine on a day to day basis, but there was a note on some accounts to refer to the finance department before issuing a valuation.

Ms Kelleher said her team followed this instruction and she took it on face value that other teams were following their own processes correctly.

The defendant told gardai that she “didn’t think anything criminal was going on in the background” and her team had believed their work was based on information posted to the system, that they took to be correct.

Ms Kelleher said her team would follow up with the finance department when they saw pop up notes on client accounts instructing them to contact Paul Lavery, head of finance, or Mr Cassidy, before issuing a valuation. She said there could be delays getting the necessary details from finance on some accounts. The defendant said she would then highlight this to Mr Whyte, her line manager.

“We’re sent to the finance department, they stonewalled and we escalated”, Ms Kelleher told gardai.

Ms Kelleher said her team didn’t actively send out anything false or falsify information. She said auditors had signed off on accounts and on the transfer of  part of CHC’s business to Appian Asset Management in 2011.

Gardai put to it to Ms Kelleher that only her team could run client valuations, but she said there were no system restrictions and any team could have done this.

Ms Kelleher (51), has pleaded not guilty to one count 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 offences are alleged to have happened within the State on dates between October 2008 and July 2011.

The trial continues before Judge Orla Crowe and the jury.