ANOTHER PONZI SCAM: CROOKED ESTATE AGENT TARGETED DONEGAL

January 12, 2012

EXCLUSIVE: A former estate agent who conned €1M out of Donegal investors to participate in a “Ponzi” scheme has been jailed for six years.

This is just the latest con where people in Donegal have been cleaned out by crooks.

The latest scamster is Eamonn Kelly, 48, who previously owned two RE/MAX Auctioneers franchises, told investors that they could make €15,000 profit on a €50,000 investment within six months, if they purchased sites he claimed he had identified in the UK.

He maintained the sites were incredibly lucrative and that planning permission for a hotel was imminent for them.

He subsequently used funds from later investors to repay profits to the early investors to encourage them to re-invest in the scheme.

Kelly of Decies Road, Ballyfermot, pleaded guilty at Dublin Circuit Criminal Court to a number of sample charges of theft, one of producing a false instrument and one of forgery on dates between October 2007 and February 2010. He has no previous convictions.

Detective Garda Seamus Padden told Mr Kerida Naidoo BL, prosecuting, that Kelly forged Mr Keane’s signature on a letter that was then sent to potential investors to encourage them to invest in a bogus property operation in Manchester.

The letter stated that the solicitor was representing Kelly and that the estate agent acted as an advisor to Mr Keane. Mr Keane knew nothing about the letter.

Kelly also provided potential investors with a bogus letter from the Ulster Bank in Crumlin, stating that he had €4.6m on deposit in an account there.

Det Gda Padden said the scheme involved 25 different groups from Dublin, Wexford and here in Co Donegal, whose investments ranged from €10,000 to €100,000.

Donegaldaily.com has been given the names of those conned here.

Kelly told the investors that the sites could be purchased at cut prices and hotels could then be built on them which would in turn produce a significant short-term profit.

Det Gda Padden told Mr Naidoo that the investors represented a “cross-section of society”, some of which used their recent redundancy to purchase the site, others used their savings, while others were “business people who have would have the means to survive” despite their financial loss.

Kelly had paid commission to RE/MAX agents in both here in Co Donegal and Wexford to source potential investors but gardai accept that these estate agents genuinely believed that the operation was legitimate.

He sourced the Dublin investors himself through his contacts with his local GAA club in Crumlin, friends and acquaintances.

Det Gda Padden said the bulk of the funds, just over €1m, came from the Donegal investors.

He said Kelly had paid back €410,000 to a small number of investors before he was caught. He added that €480,000 which he then held in three different bank accounts was frozen by order of the High Court upon his arrest.

Det Gda Padden told Mr Naidoo that the scheme came to light after the bogus letter from Ulster Bank came to the attention of the bank. They contacted the gardaí. Kelly’s accounts were frozen and Kelly then presented himself voluntarily at the garda station.

He made full admissions and said that he had started the scheme after he ran into financial difficulty following the property crash. He said he was under pressure to keep up to date with his €8,000 monthly mortgage repayments on three properties in Kildare, Dublin and Portugal.

Judge Martin Nolan described the offence as a “classic Ponzi scheme” and said Kelly had used a reputable solicitor to convince investors that the sites in the UK would be turned into profit easily.

He said that Kelly had been a decent man until he engaged in this activity and found himself “totally out of his depth”.

Judge Nolan said Kelly’s crime “involved deception, severe losses to some and breaches of trust” before he imposed consecutive sentences totalling six years.

The case was adjourned to allow the State time to consider what should be done with the money frozen in Kelly’s account.

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