Company directors jailed for failing to transfer proceeds of property sales

business
Company Directors Jailed For Failing To Transfer Proceeds Of Property Sales
Judge Elma Sheahan said the modus operandi in this case was “classic robbing Peter to pay Paul”
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Brion Hoban and Fiona Ferguson

Two directors of a real estate company who failed to give clients the proceeds of the sales of their homes outside the State have been jailed.

Lawyers for Sean Boylan (72) and Colin Horan (38) told the court that there had not been a plan to defraud the customers and the offending arose from poor business management.

Dublin Circuit Criminal Court heard that the modus operandi of the company was “classic robbing Peter to pay Paul”. In some cases clients were being paid not from the proceeds of the sale of their properties, but rather from the proceeds of other sales.

Boylan, of Annalee Grove, Cootehill, Co Cavan and Horan of Marine Terrace, Dun Laoghaire, Co Dublin, pleaded guilty to two counts of carrying on the business of a company with intent to defraud the creditors of the company on dates between June 1st, 2012 and July 31st, 2015.

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Following a sentencing hearing this week, Boylan was jailed for three years and Horan was jailed for two years and two months.

Previous convictions

The court heard Horan and Boylan both have 11 previous convictions for providing property services without a licence - also in relation to this company - for which they were both fined €16,000 and prohibited from being company directors for a period.

Detective Garda Rebecca Devaney told Eoghan Cole BL, prosecuting, that in 2010, both men became the sole directors of a company which operated a business selling properties in Bulgaria and Turkey.

The court heard that the company, formerly known as Extra Sales Consulting Limited trading as Extra Sales and which was later renamed M&M Marketing Strategies Limited, is no longer in operation.

Det Gda Devaney said the company would act as an “agent”, meaning their clients, who were based in Ireland, would execute documentation to give the company the legal right to sell their properties and take possession of the monies with the expectation they would pass the funds along to them.

Victims

The court heard that of the 14 victims in this case, all but one had their properties sold, but they did not receive the proceeds of the sale. The final victim paid a deposit to the company, but their property was not sold.

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One of the victims made a complaint to gardaí in 2015, while gardaí were also contacted by the liquidator who was winding up the company the same year. The liquidator had been contacted by a number of people regarding money they said they were entitled to.

Boylan and Horan were both interviewed by gardaí on numerous occasions and both exercised their right to silence.

The court heard evidence from a forensic accountant who said that there had been no separation of company funds and client funds, and that people were not receiving the proceeds of their sales, but were in some cases receiving funds from other sources, including from other sales.

Legitimate trading company

Kathleen Leader SC, defending, said the company had been a legitimate trading company at the beginning and was not set up to defraud but to provide a service.

Counsel said reality had not been faced up to, with some money paid out to customers and her client paying himself, while hoping more money would come along.

She submitted it had been “very very very poor business management” to the detriment of his customers, but there was no evidence of personal enrichment. She said some money had been paid out to the clients and there was no evidence of significant financial gain on Boylan's part.

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Counsel said it had been a legitimate business with no plan to defraud customers and the defrauding arose from bad management on the part of her client. She said there was no evidence he had made any money other than his normal wages.

Ms Leader said her client was currently a bankrupt and simply does not have any money.

'Gormless man'

Michael Vallely BL, defending Horan, described his client as “quite a gormless man” who was not a learned businessman. He had been introduced to Boylan and his role was to market the company, the court heard.

He said his client had very little financial dealings and it showed his “gormlessness” that he did not see this coming at all.

Mr Vallely outlined that Horan, a married man with two young children, had already paid €153,500 back to clients and asked for more time to allow that to continue.

He said his client had shown remorse and was anxious to make amends, and currently works locally as a finishing foreman.

Disgraceful management

Judge Elma Sheahan said the modus operandi in this case was “classic robbing Peter to pay Paul”. She said the management of the accounts was “chaotic, haphazard and clearly a disgrace in the circumstances”.

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Judge Sheahan said it was up to each director to ensure that he knew what was going on in the company accounts. She said it “must have become apparent” to both accused that there were “difficulties” in what they were doing.

She said that approximately €670,000 was owed to the victims and that Horan has attempted to pay back over €100,000. She said the court accepts the accused did not set out with criminal intent.

Judge Sheahan sentenced Boylan to three years and six months imprisonment, but suspended the final six months of the sentence.

She sentenced Horan to two years and eight months imprisonment, but also suspended the final six months of the sentence.

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