Hundreds of Irish people caught up in 'Wild West' property scheme, Dáil hears

Hundreds of 'ordinary' Irish people have lost their life savings and pensions after the collapse of German property group Dolphin Trust, Sinn Féin's Pearse Doherty said
Hundreds of Irish people caught up in 'Wild West' property scheme, Dáil hears

Sinn Féin's Pearse Doherty said Dolphin Trust was 'a Ponzi scheme' which had collapsed due to 'unregulated products'. Picture: Gareth Chaney/Collins

Hundreds of Irish people unknowingly invested in a "Wild West" German property scheme that has cost them thousands of euro and, in some cases, their entire life savings. 

The collapse of the German Property Group, formerly called Dolphin Trust, which went into insolvency administration in Bremen last year, put into question billions of euro the German firm had collected across the world, including Korea, France, and the UK, as well as in Ireland.

In the Dáil, Sinn Féin's Pearse Doherty said the trust was "a Ponzi scheme" which had collapsed due to "unregulated products". 

"These are ordinary people who've lost, some of them, their life savings and pensions. Dolphin Trust has collapsed and owes investors around the world in the region of €3bn," he said. 

"In Germany, it was reported that the properties held by Dolphin Trust would only be able to recover €100m. 

British and German media have reported that investors' money was used by the director and his family to pay for parties, fashion shows, luxury items and rent."

Mr Doherty said the "nerve centre" of the company was based in Cork, which processed the loan notes, which he said were often secured against properties that did not exist. 

He said directors of a Naas-based company had paid themselves €4m in 2018 "when the Ponzi scheme was unravelling". 

German authorities, he said, are investigating the collapse of the company.

"It was clearly a scam," he added, saying it had been caused by "regulatory failure".

This is the Wild West of financial markets, with no sheriff in sight."

Mr Doherty said the Central Bank was aware of the company back in 2016 and asked why no action was taken. 

Tánaiste Leo Varadkar said the Central Bank is an independent entity and he does not believe the Government became aware of the collapsed German Property Group in 2016. 

Mr Varadkar, however, said he was not aware of the full facts of the case and would defer to Finance Minister Paschal Donohoe. 

Youth unemployment

Meanwhile, Labour's Áodhán Ó Ríordán later raised the issue of youth unemployment. He said that at 59%, it was higher in Ireland than anywhere in Europe. 

This, he said, risked a "lost generation" and he asked Mr Varadkar to establish a youth unemployment taskforce.

Mr Varadkar said young people had "suffered a lot in this pandemic". He said their lives had been "interrupted". 

He said Ireland had lost generations "too many times in the past" and said many younger people were experiencing the second recession of their adult lives.

However, Mr Varadkar said the 59% statistic was somewhat misleading as the Irish system for calculating youth unemployment does not include young people in education or training. 

Mr Ó Ríordán said Mr Varadkar had not tweeted about youth unemployment this year, but had mentioned Sinn Féin on the website 12 times. Mr Varadkar called this "a cheap shot" and accused the Labour TD of "virtue signalling".

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