Developer diverted $13m, court hears

A Cork developer unlaw-fully diverted over $13m (€9.6m) for his own benefit from $50m funds paid towards the completion of a luxury resort in the Caribbean, it has been claimed in the High Court.

It was alleged that Padraig O’Halloran, aged 42, of Shippool, Innishannon, Co Cork, misappropriated the funds and various payments were made by his firm to Irish bank accounts, along with €120,000 and $72,000 to Weddings by Franc and €20,000 to Adare Manor.

Harlequin Property SVG Ltd, and Harlequin Hotels and Resorts Ltd, the owners and operators of the luxury resort in Buccament Bay, St Vincent and the Grenadines, have brought an action claiming Mr O’Halloran also bought a property in Ireland; properties and businesses in the Caribbean; a $1.5m private jet; a grand piano for his girlfriend; dental work; and other items of personal expenditure.

Harlequin wants restitution, damages, and compensation for alleged breach of fiduciary duty in relation to the alleged Irish payments and transfers in to Irish accounts.

The proceedings arise as a result of Harlequin engaging Mr O’Halloran and his construction company, the ICE Group, in 2008, to complete the construction of a multimillion-dollar tourist development in Buccament Bay to a deadline in Jul 2010.

It is claimed Mr O’Halloran had a duty to act honestly and in good faith, and a duty not to defraud Harlequin or make a secret profit. It is claimed Mr O’Halloran made representations that the entire construction project would be complete and open for business on Jul 1, 2010. It is claimed these representations were false. It is alleged that Mr O’Halloran was intent on embarking on a fraudulent scheme to divert project funds to his own personal benefit.

It is claimed about $13.3m of monies paid by the Harlequin Group for the Buccament Bay project and authorised Harlequin projects was unlawfully diverted by Mr O’Halloran for his own personal benefit.

The money, it is alleged, includes payments of $1.6m to Mr O’Halloran’s bank accounts in Ireland; and $358,000 to his father Donal’s Irish bank.

It is claimed Mr O’Halloran purchased a house at Shippool, Innishannon, funded directly or indirectly from the payments, and that along with the Caribbean purchases and Irish payments, were of a systematic and deliberate fraud.

Mr O’Halloran has denied the claims.

The proceedings are also against retired businessman Donal O’Halloran, Ballinaspig, Co Cork. He said he has been unnecessarily dragged into the case and wants the order against him vacated.

The case continues.