Brothers secure order to freeze assets of friend who allegedly pulled off 'elaborate fraud'

The action has been brought by Gary and David McGuinness against US-based David Morrisroe who they claim has failed to answer their questions about funds they gave to him in 2015 and 2016 to be invested in Irish and European property and precious gems. File image: iStock

Two brothers who claim they are the victims of an "elaborate fraud" have secured a High Court order freezing the assets of a friend to whom they gave €1.25 million to invest in various projects.

The action has been brought by Gary and David McGuinness against US-based David Morrisroe who they claim has failed to answer their questions about funds they gave to him in 2015 and 2016 to be invested in Irish and European property and precious gems.

They now believe that no such investments were ever made by the defendant, that Mr Morrisroe has allegedly misappropriated money from them which they fear is about to dissipated and put beyond their reach.

At the High Court, Ms Justice Leonie Reynolds granted the McGuinness brothers interim injunctions including a worldwide order restraining Mr Morrisroe from dissipating or dealing with the defendants' assets so as to reduce their value below a value of €1.25m.

The defendant must also provide the brothers with information on all worldwide assets he owns or has an interest in.

The brothers, represented in the proceedings by Stephen Byrne Bl, are seeking various orders including one directing Mr Morrisroe to repay the monies to the McGuinness brothers.

The brothers have also reported the matter to An Garda Siochana.

The court heard that Mr Morrisroe was put on notice of the proceedings, but did not attend court nor were there any representations made on his behalf.

Testimony from Gary McGuinness

In a sworn statement to the court, London-based businessman Gary McGuinness said that he considered the defendant to be a close friend, whom he has known for many years.

In 2015 the brothers sought the advice of Mr Morrisroe, who had held himself out to be an investment trader operating a large foreign exchange fund, on how to make returns on money they had inherited.

They claim Mr Morrisroe convinced them to invest in projects that he was involved in.

Gary McGuinness said that based on what he was told by the defendant he believed the investments were in Irish property assets.

The investments include land in Oristown, Co. Meath, acquired from NAMA and a property at Ailesbury Mews, Sandymount, Dublin 4, an apartment in Ringsend, Dublin, and a property in Croatia.

Mr McGuinness said Mr Morrisroe failed to engage with him when asked for updates on the investments.

Information on the investments he said was slow to come. He added that information provided by the defendant was "largely if not completely untrue," and he was not repaid monies due on the investment by the defendant.

He said he also discovered that other information given to him by Mr Morrisroe, including that his father David Morrisroe Snr had given the defendant US$30m, and that he had sold an apartment in New York he owned, were not true.

In August 2019, Mr McGuinness said the defendant told him his father would repay the money, however no payment has been forthcoming.

Testimony from David McGuinness

David McGuinness said Mr Morrisroe has relocated to Chicago in the USA. It appears the defendant has no property assets in Ireland, and is listed as a director of one Irish-registered company Cloudshill Holdings Ltd, which has not filed any accounts, he added.

Mr McGuinness said the brothers attended Mr Morrisroe's wedding in Chicago in 2019 just to get face time with him to discuss their investments.

Mr McGuinness said when Mr Morrisroe recently informed him he was in the process of liquidating assets the brothers became concerned that any proceeds of sale would be dissipated.

In his sworn statement, David McGuinness said that information given to him by the defendant, who he said he became friendly with concerning property investments, were "a fiction."

Mr McGuinness said in 2016 Mr Morrisroe approached him about buying diamonds in Kenya. Following a request from Mr Morrisroe he said he transferred money to a third party.

After he made enquiries to the third party it transpired that there was no diamond deal. Mr Morrisroe, who Mr McGuinness said had "lied to me", owed the third-party money.

Mr McGuinness said his money had been used to repay Mr Morrisroe's debt to the third party.

The matter will return before the court in two weeks'' time.