Ex-solicitor jailed for deceiving bank into loaning €9m for land

A struck-off solicitor has been jailed for two years for his role in deceiving a bank to lend almost €9m for land now worth €30,000.

John Duffy, aged 44, sent false letters to Investec Bank on behalf of co-accused Tony McAuliffe, aged 78, to get a loan for 55 acres of land in Offaly in 2007.

McAuliffe received a suspended two-and-a-half-year sentence for his role. Judge Leonie Reynolds accepted McAuliffe has borderline intellectual functioning and deteriorating health.

McAuliffe, a former jockey of Furze, Co Kildare, and Duffy, of Clogheen, Monasterevin, Co Kildare, pleaded guilty at Dublin Circuit Criminal Court to dishonestly obtaining a loan from Investec with intent of making gain in March 2007. They have no previous convictions.

Through Duffy, McAuliffe promised the bank he had a buyer with a €7m deposit for the land, its sand, and gravel deposits. The plan was to sell it to this buyer, a firm called Conway Clarke, for €17m.

Judge Reynolds said Investec’s failure to carry out “rudimentary” background checks was reflective of the “lax lending practices” of financial institutions at the time.

She suggested the bank could have exposed the fraud if it had conducted such checks.

Detective Sergeant Pat Linehan had earlier revealed that Conway Clarke was a company set up with McAuliffe’s daughter and a family friend acting as directors.

Investec agreed to fund the full land purchase price on the understanding it was to be a “bridging loan” and would be repaid within two months. The bank was not aware Conway Clarke had been set up by the accused.

Before finalising the deal, McAuliffe and Duffy handed over several documents to Investec, including a valuation of the land as worth €12m.

Duffy got an extension on the loan repayment date after he told an Investec representative the deal had been delayed through illness and one of the parties being on holiday.

In the meantime, McAuliffe used his daughter to get €100,000 from her credit union account to pay interest on the bank loan while he tried to secure buyers.

Eventually, Investec went to the High Court after a potential purchase from a builder fell through.

Judge Reynolds noted that Duffy’s former firm with his ex-partner had to pay out an indemnity insurance settlement. She said his behaviour had been a “serious breach of trust” in his position as solicitor.

She accepted there had been no monetary gain for Duffy because the purchase on the land never went through. The judge said she was taking into consideration Duffy’s personal circumstances, including his marriage breakdown.

She imposed a sentence of three years, but suspended the final 12 months of his sentence, taking into account his previous good character, co-operation, and remorse.

Judge Reynolds noted that McAuliffe had “significant cognitive impairment” as had been outlined to her by his counsel at the sentence hearing. She suspended McAuliffe’s sentence for two-and-a-half years.

At the sentence hearing, Det Sgt Linehan told Bernard Condon, prosecuting, that Investec was headquartered in Britain but had operations in Ireland.

In late 2006, McAuliffe and Duffy held discussions with Investec about buying a truck garage in Tullamore. The bank refused to fund this deal, but in the meeting the men brought up a nearby, 55-acre site that they were interested in buying.

Alan Casey, who was responsible for structured property lending at Investec at the time, told the court the bank didn’t usually fund agricultural land purchases. However, the accused said they had an offer from a third party, Conway Clarke, to buy the land for a higher price.