£8.5 Million Harlequin Property Fraud Revealed In Court

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Written By Farid Shojaei

A free spending high-roller grabbed nearly £8.5 million in cash from funds sent to him to build a luxury hotel resort.

The High Court in Ireland has ruled Padraig O’Halloran defrauded property investment firm Harlequin.

The court heard the money was part of £32.5 million transferred by Harlequin to ICE Group, the building contractors, hired by Harlequin to develop the luxury Buccament Bay Resort on the Caribbean Island of St Vincent.

But, the court decided, O’Halloran colluded with Martin MacDonald and Jeremy Newman who worked for Harlequin’s accountants Wilkins Kennedy to cover up the fraud by taking a share in the proceeds.

The judge was told £1.3 million was spent by O’Halloran in Ireland – including funding a lavish wedding.

Conflict of interest

Money also went on a $1.5 million private jet, a racecourse on St Lucia in The Caribbean, a car rental firm and the refurbishment of property at Sandy Lane, a luxury resort in Barbados.

Harlequin’s lawyers explained to the court that O’Halloran did little work at Buccament Bay, but the progress looked better than the reality because MacDonald and Newman were helping O’Halloran in his fraud.

“I am satisfied that the evidence establishes that by the spring of 2010, MacDonald was working in league with O’Halloran and he had a serious conflict of interest in continuing to act for Harlequin,” said the judge.

“O’Halloran, Newman and MacDonald travelled to the UK, Jordan, Romania and Morocco canvassing new business. It appears a ticket was bought for MacDonald, but that he had not ultimately travelled with other members of the party.”

The Harlequin group of companies has faced financial difficulties for some months – starting with a warning from the then Financial Services Authority on investing with the companies.

BBC bribery scandal

This was followed by an FSA survey of self-invested personal pension (SiPP) providers to gauge how many IFAs had recommended clients to put money into the Harlequin developments as the investment was not FSA regulated and the regulator suspected considerable sums of money were at risk.

About that time, BBC TV planned a Panorama documentary on Harlequin, but the programme was dropped when a producer was suspended over claims of bribery.

Then, Harlequin’s UK marketing arm applied to go into administration.

Harlequin Hotels & Resorts is still trading as normal.

At the time the FSA expressed concerns, Harlequin boss David Ames denied misappropriating any investor cash but did not reveal the extent of the cash flow problems caused by O’Halloran.