herald

Tuesday 21 August 2018

Ex-garda sues Cowen's running mate over €10m 'scam'

A RETIRED garda superintendent completely trusted a former election running mate of the Taoiseach when he invested €73,000 in an alleged land deal "scam", the High Court heard.

Peter Wheeler is among several investors suing Gerard Killally, a former Fianna Fail councillor and former Brian Cowen running mate, after the deal in which Mr Killally allegedly made secret profits.

It is alleged Mr Killally, unknown to the investors, had acquired the lands at Mount Lucas, Daingean, Offaly, for some €4.7m and arranged a scheme under which they were sold to the investors for €10.6m in May 2007, when they believed Mr Killally was a co-investor.

Former Supt Wheeler said yesterday he had completely trusted Mr Killally, an auctioneer, when considering in late 2006 whether to invest in the purchase of lands as Mr Killally was chairman of Offaly County Council, had run in General Elections and was of standing in the community.



Problem

Mr Killally assured him it was a "no-risk" investment but at no stage disclosed he was the seller of the lands, having bought them from his father-in-law and others, Mr Wheeler said.

Mr Killally instead represented he was a co-investor entering into a partnership with Mr Wheeler and others and had also indicated there would be no problem securing planning permission for the lands, he added. Mr Wheeler ultimately invested some €73,000 while other investors provided sums ranging from €61,000 to €1.2 m.

Mr Wheeler, two of his brothers, six other investors and two companies are suing Mr Killally, a firm of solicitors, financial advisers and others over the deal completed in May 2007.

The defendants include a number of people who themselves also invested in the deal and are alleged to have been engaged by Mr Killally to advise about the investment.

The action opened yesterday before Mr Justice Michael Peart.

The judge was told Mr Killally had been declared bankrupt since the case was initiated and the Official Assignee in bankruptcy would not be participating in the case. A motion for judgment in default of defence is to be brought against Mr Killally, it was stated.

The other defendants have denied the claims against them.

Ronan Murphy, for the plaintiffs, said valuation evidence indicated the true value of the land was €3.25m.

It is also claimed Mr Killally told investors he held booking deposits of between €4.5m and €6.3m in relation to the selling on of sites on the lands.

While the investors could not say information supplied to them about booking deposits was "completely fictitious", the fact was the contracts were never fulfilled, Mr Murphy said.

The case continues.

hnews@herald.ie.

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