High Court grants freezing orders against parties linked to alleged Ponzi scheme

business
High Court Grants Freezing Orders Against Parties Linked To Alleged Ponzi Scheme High Court Grants Freezing Orders Against Parties Linked To Alleged Ponzi Scheme
The company, Irish Gold and Silver Bullion Ltd, was wound up last year, the High Court heard
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High Court reporters

A company that claimed to sell investors gold and silver bullion was operated as "a Ponzi-scheme," and defrauded its customers, the High Court has heard.

The company, Irish Gold and Silver Bullion Ltd (IGSB), with a registered address at The Crescent, Monkstown, Dublin, was wound up last year and chartered accountant Myles Kirby was appointed as liquidator.

Arising out of a thorough investigation of the firm's affairs, Mr Kirby has brought High Court proceedings against the firm's director and sole shareholder, Nicholas Wickham, who it is claimed recklessly got customers to put money into IGSB which the defendant knew could never be repaid.

Represented by John Kennedy SC, Arthur Cunningham BL, instructed by Michael Quinlan of RDJ solicitors, Mr Kirby also claims that Mr Wickham misapplied customers' monies to various entities for improper purposes, including making unlawful payments for his own personal benefit.

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Mr Wickham concealed the extent of the company's financial situation and failed to maintain proper records, and gave false representations that funds invested in IGSB would be repaid when it was "hopelessly insolvent", Mr Kirby said.

It is claimed that the alleged Ponzi scheme was operated by IGSB for several years and when Mr Kirby was appointed as liquidator there was "no stock of valuable metal in the company."

To date Mr Kirby said he has been able to identify €1.03 million that remains due to creditors of the company.

On Tuesday, Mr Justice Brian O'Moore granted lawyers for Mr Kirby a temporary freezing order, known as a Mareva injunction, against Mr Wickham and a company he allegedly owns and controls called Hamden Development Homes UK Ltd.

Mr Kirby claims that Mr Wickham has misapplied monies from IGSB in favour of the second named defendant.

The injunction, which was granted on an ex-parte basis, prevents the defendants, with addresses in London and Watford in the UK, from reducing their assets including cash held in bank accounts below a value of just over €1.03 million.

Seeking the orders Mr Kennedy said that his client was seeking the freezing order over concerns that the defendants may seek to dissipate those assets and put them beyond the reach of IGSB creditors.

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Counsel said that Mr Kirby's investigations have revealed that the defendants have significant assets, in the forms of several properties in Watford with an estimated combined value of up to £2 million.

Straight-forward business

In a sworn statement Mr Kirby said that IGSB's business was straight forward.

Customers transferred their money to the company to buy gold and silver on their behalf, believing that it would be sold off at a higher price to generate a profit.

Mr Kirby said that in reality payments made by customers were often used to make payments to other customers who had invested in the IGSB at an earlier point in time.

Other funds were diverted to third parties or entitles related to Mr Wickham, which Mr Kirby claims were used for the defendant's own benefit.

Mr Kirby said that proper books and records were not kept by IGSB, allowing Mr Wickham "to operate the ponzi scheme" and "conceal his fraud."

Mr Wickham, he said, made no records of claims made by customers who paid money to IGSB, but who did not get any gold or silver from it.

This gave the appearance that the firm's assets matched what the customers had paid into the firm, when there was a substantial number of unpaid creditors and a large deficit.

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It has not been possible for Mr Kirby to determine whereabouts of all the companies assets, including cash invested in the company, or precious metal stock held by IGSB due to the cavalier attitude of Mr Wickham's towards keeping record.

It is believed that €3 million of gold and silver was purchased by the company between May 2019 and June 2001, Mr Kirby said.

Harrods

In addition, some customers were told that the valuable metals were being stored at vaults at the world-famous Harrods Department store in London and were furnished with certificates from IGSB confirming their purchase.

However, Mr Kirby said that Harrods have confirmed to him that it had no dealings with the company since 2016 when it closed its accounts and at the time of his appointment it held no gold in its vaults for the company.

This meant that the certificates issued were "a fabrication," and that gold customers believed had been purchased on their behaves did not exist, Mr Kirby said.

Mr Kirby said that following his appointment as liquidator, on behalf of a IGSB customer who was owed over €40,000, in June 2021 he wrote to Mr Wickham and sought certain information from him about the company.

No information has ever been provided by Mr Wickham to Mr Kirby.

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In emails sent by Mr Wickham, the liquidator was told that there "were credible threats to my (Wickham) life and of my family."

Mr Wickham also said that the all documents of the company were at "a secure location in Ireland and that he would instruct a lawyer in Dublin."

No representative of Mr Wickham ever contacted him and when Mr Kirby's representatives arrived at the IGSB's Monkstown office last August, the premises had been vacated and no files or computer equipment was found. Mr Kirby referred the matter to gardaí.

Mr Kirby added that IGSB's office had also been visited by the Garda Criminal Assets Bureau.

UK business

Mr Wickham is also alleged to have operated a similar business in the UK, which has also been dissolved.

Legal claims by customers of that firm have been brought against Mr Wickham in that jurisdiction, the court also heard, including one claim where it is alleged, he supplied somebody with a 500gm gold bar which transpired to be silver bars gilded in gold.

A criminal complaint was also made against Mr Wickham in 2018 where it is alleged that he borrowed a gold bar worth £33,000 his firm acquired for a customer, that he wished to show to other clients, which he allegedly failed to return.

He made a part payment in gold to the complainant, but it is alleged still owed that complainant a estimated £18,000 worth of gold.

After granting the freezing order Mr Justice O'Moore made the matter returnable to a date in September.

He also imposed an order restricting the media from publishing details about the case until after 12.01 AM on Wednesday July 27th next, to allow Mr Kirby's lawyers time to inform financial institutions of the order.

The judge also granted the defendants permission to apply to the courts, on notice to Mr Kirby, to seek to vary the freezing order.

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