The High Court has ruled that two men who were involved in a fraudulent forestry business are personally liable for some or all of the company’s debts.
In 2019, Garret Hevey, with an address at Shankill, Dublin and David Peile, who is now based in the UK, were jailed by Dublin Circuit Court after pleading guilty to their role in the fraud.
Liquidator Declan de Lacy had sought the orders and declarations at the High Court against the convicted men.
Hevey did not contest the motion brought against him by the liquidator, while Peile filed three affidavits, and did contest the liquidator’s entitlement to secure any of the order sought against him.
Forestry fraud
The court heard that Arden Forestry Management Limited operated a fraudulent business from its incorporation in 2013 until its liquidation in 2016.
De Lacy described the company as a “Ponzi scheme” which offered investments in forestry schemes allegedly operated by the firm.
A total of 166 investors placed money with the company for the purpose of acquiring interest in lands in Ireland.
The company raised a total of €6,432,745 from individual investors, many of whom were retired and primarily based in the UK.
The average investment was in the region of €20,000, the largest individual investment was over €490,000.
The liquidator’s investigations found that a total of 30.2ac of forestry land was acquired by the company, at a cost of €133,925. A further sum of €392,641 was paid back to investors.
The court heard that much of the balance of the monies received by the company appears to have been misappropriated.
The court heard that both Hevey and Peile used pseudonyms in their dealings with investors and prospective investors.
Hevey called himself “James Baker”, and David Peile “used the pseudonym of David Marshall”.
High Court
In his judgement, Justice Brian O’Moore said that “the business of this company was carried out in an utterly fraudulent way”.
“Indeed, the company carried out no genuine business and conducted no real trade.
“The disparity between the funds received from investors for the purchase of forestry, and the actual value of the forestry purchased, is utterly jarring,” he said.
The judge said that Garret Hevey was a director of the company from its foundation and “was the chief engineer of the fraudulent schemes described by the liquidator”.
He said that Hevey, who was responsible for an “investment brochure”, had transferred very large amounts of money to himself and to another company where he had control of the bank account.
Justice O’Moore noted that as far as Peile is concerned “the situation is more complicated”.
He said that Peile,who was not a director of Arden FM, had attempted to place on Hevey’s shoulders all of the responsibility for the operation of the Ponzi scheme.
The liquidator claimed that Peile was “second in command” to Hevey, which Peile contested.
Peile said that he had entered a guilty plea in the circuit court on the basis of advice given to him by his senior counsel.
Justice O’Moore found that Peile was “knowingly a party to the carrying on of the business of the company with intent to defraud the creditors”.
However, he accepted that the scope of Peile’s involvement in the fraud was significantly and materially less than that of Hevey.
The judge made an order declaring Garret Hevey personally liable for all of the debts and other liabilities of the company in the sum of €3,807,142.
He ruled that David Peile is personally liable for a specified portion of the debts and other liabilities of the company which would be finalised at a hearing on a later date.