Company directors jailed for failing to transfer proceeds of property sales

Padraig Conlon 07 May 2021

Two directors of a real estate company who failed to give clients the proceeds of the sales of their homes outside the state have been jailed.

Lawyers for Sean Boylan (72) and Colin Horan (38) told the court that there had not been a plan to defraud the customers and the offending arose from poor business management.

Dublin Circuit Criminal Court heard that the modus operandi of the company was “classic robbing Peter to pay Paul”.

In some cases clients were being paid not from the proceeds of the sale of their properties, but rather from the proceeds of other sales.

Boylan, of Annalee Grove, Cootehill, Co Cavan and Horan of Marine Terrace, Dun Laoghaire, Co Dublin, pleaded guilty to two counts of carrying on the business of a company with intent to defraud the creditors of the company on dates between June 1, 2012 and July 31, 2015.

Following a sentencing hearing this week, Boylan was jailed for three years and Horan was jailed for two years and two months.

The court heard Horan and Boylan both have 11 previous convictions for providing property services without a licence – also in relation to this company – for which they were both fined €16,000 and prohibited from being company directors for a period.

Detective Garda Rebecca Devaney told Eoghan Cole BL, prosecuting, that in 2010, both men became the sole directors of a company which operated a business selling properties in Bulgaria and Turkey.

The court heard that the company, formerly known as Extra Sales Consulting Limited trading as Extra Sales and which was later renamed M&M Marketing Strategies Limited, is no longer in operation.

Det Gda Devaney said the company would act as an “agent”, meaning their clients, who were based in Ireland, would execute documentation to give the company the legal right to sell their properties and take possession of the monies with the expectation they would pass the funds along to them.

The court heard that of the 14 victims in this case, all but one had their properties sold but they did not receive the proceeds of the sale. The final victim paid a deposit to the company, but their property was not sold.

One of the victims made a complaint to gardaí in 2015, while gardaí were also contacted by the liquidator who was winding up the company the same year. The liquidator had been contacted by a number of people regarding money they said they were entitled to.

Boylan and Horan were both interviewed by gardaí on numerous occasions and both exercised their right to silence.

The court heard evidence from a forensic accountant who said that there had been no separation of company funds and client funds, and that people were not receiving the proceeds of their sales, but were in some cases receiving funds from other sources, including from other sales.

Kathleen Leader SC, defending, said the company had been a legitimate trading company at the beginning and was not set up to defraud but to provide a service.

Counsel said reality had not been faced up to, with some money paid out to customers and her client paying himself, while hoping more money would come along.

She submitted it had been “very very very poor business management” to the detriment of his customers, but there was no evidence of personal enrichment. She said some money had been paid out to the clients and there was no evidence of significant financial gain on Boylan’s part.

Counsel said it had been a legitimate business with no plan to defraud customers and the defrauding arose from bad management on the part of her client. She said there was no evidence he had made any money other then his normal wages.

Ms Leader said her client was currently a bankrupt and simply does not have any money.

Michael Vallely BL, defending Horan, described his client as “quite a gormless man” who was not a learned businessman. He had been introduced to Boylan and his role was to market the company, the court heard.

He said his client had very little financial dealings and it showed his “gormlessness” that he did not see this coming at all.

Mr Vallely outlined that Horan, a married man with two young children, had already paid €153,500 back to clients and asked for more time to allow that to continue. He said his client had shown remorse and was anxious to make amends, and currently works locally as a finishing foreman.

Judge Elma Sheahan said the modus operandi in this case was “classic robbing Peter to pay Paul”. She said the management of the accounts was “chaotic, haphazard and clearly a disgrace in the circumstances”.

Judge Sheahan said it was up to each director to ensure that he knew what was going on in the company accounts. She said it “must have become apparent” to both accused that there were “difficulties” in what they were doing.

She said that approximately €670,000 was owed to the victims and that Horan has attempted to pay back over €100,000. She said the court accepts the accused did not set out with criminal intent.

Judge Sheahan sentenced Boylan to three years and six months imprisonment, but suspended the final six months of the sentence.

She sentenced Horan to two years and eight months imprisonment, but also suspended the final six months of the sentence.

During her plea in mitigation, Ms Leader said her client apologised to all the victims, totally accepts responsibility and greatly regrets what happened. She said if he could have his time over again, he would have acted differently.

She said her client is a committed family man who was originally from Monaghan town where he ran a photographic business for 40 years. She said he greatly contributed to the local community through his local rotary club and through initiating a committee for mutual understanding in relation to peace in Northern Ireland.

Counsel said her client had gone on repeated holidays to Bulgaria over the years and made connections there. He became an advisor to people buying property there and his local knowledge started his involvement in the property business from the 1980s until recent times.

She handed in numerous testimonials describing Boylan as someone who helped others and was a good friend, parent, husband and sibling. She said he helped care for his mother-in-law with Alzheimer’s.

Counsel asked the court to take into account his early guilty plea, remorse and acceptance of responsibility. She said he was someone who had led a good life and, not taking away from what the complainants had gone through, these matters had weighed on him heavily in the past few years.

Retired superintendent Joseph Prendergast told Mr Vallely that he had known Horan since he was a teenager and he came from an impeccable, hardworking background.

He said Horan had got involved with property in the “Celtic Tiger years” but did not have the maturity to deal with problems in a proper manner when they arose.

He said Horan has “matured beyond words” since these events occurred and his sole focus is now on providing for his family and making recompense to the injured parties. He told Judge Sheahan he had not come to court lightly and that if Horan got a chance he would not need a second chance.

While passing sentence, Judge Sheahan said a fact which the court notes as “troubling” is that an offer of payment was made by both accused to a different individual should they deny wrongdoing by the accused.

She said the offending has had “long lasting effects on all concerned”. She said the consequences go beyond the monetary loss and has significantly impacted the health and peace of mind of the victims.

The judge said that in one case, a victim had borrowed a sum of money to purchase the property and required the funds of sale to pay back the mortgage.

She said in another case, the funds of sale were to provide a victim who had been diagnosed with cancer the opportunity to recuperate without having to work.

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