Six years on, a thousand victims of an Irish Ponzi scheme still await compensation

Custom House Capital misused more than €50 million that belonged to its clients.

By Paul O'Donoghue Reporter, Fora

MORE THAN 1,000 victims of what was dubbed an Irish Ponzi scheme are still waiting to be compensated, years after submitting their claims.

The claims relate to Custom House Capital (CHC), a firm which purported to be a high-end wealth management business aimed at well-off pension investors such as doctors and lawyers.

However the firm was put into liquidation in October 2011 after it was found that it was “systematically and deliberately” misusing more than €56 million of its clients’ assets and cash.

Many people invested huge amounts of money with the company and are still yet to receive anything back, despite the company being liquidated over six years ago.

At the time, High Court judge Justice Gerard Hogan described the business as ”a sort of Irish Ponzi scheme”.

In its annual report released today, the Investor Compensation Company Limited (ICCL) said that it received just under 2,000 claims for compensation after CHC was liquidated.

The ICCL is an independent body that was established to repay investors when a firm is unable to make its own repayments.

Slow pace

During the past year, Kieran Wallace of KPMG, CHC’s liquidator and administrator, certified 20 claims and paid out compensation of €387,000 in the year to the end of July 2017.

However, this means that as of the end of the period 567 claims – only one-quarter of all the claims received – have been dealt with. Compensation of €7.4 million has been paid out to CHC’s former investors to date.

The ICCL said that the liquidator has proposed a timetable for the completion of his remaining work that will run until at least the middle of 2019.

However, it added: “A timeline for the recovery of all misappropriated monies remains uncertain due to the complexities involved.

“(This includes) legal and other impediments, such as the sale of some properties into which these monies had been diverted.”

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The ICCL said that while it is trying to speed up the compensation process, the intricacies of the CHC case, “which involved the deliberate and organised concealment of the large-scale embezzlement of investors’ funds”, have made things difficult.

The organisation said that this has contributed to “the protracted timespan of the liquidation and the associated claims certification process, which is highly unsatisfactory for the many CHC clients affected”.

The independent body added that “some measures need to be implemented to ensure a more speedy resolution of such cases to accord with the spirit of investor compensation legislation”.

“(This would) alleviate the position of investors who have the misfortune to be involved.”

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