A man who worked for an investment company that was operating as a Ponzi scheme stole thousands from investors under the false promise that they were investing in a rescue fund, a court has heard.
Donal Hayes (64) was a business manager of an investment company that was “hopelessly insolvent” and owed hundreds of thousands of euros to its investors in 2008, Dublin Circuit Criminal Court heard on Friday.
Sentencing him on Friday, Judge Martin Nolan noted Hayes was unaware the company he worked for was operating as a pyramid scheme. However, at a certain point Hayes persuaded some investors to give him money for what he termed a 'rescue fund' that would help secure their initial investment in the company, the court heard.
Instead, Hayes put the money into his own company account and put it towards investing in apartments in Bulgaria and a hotel in Brazil, the court heard. He also took €550,000 from the company for this purpose.
When the company liquidator got involved and uncovered Hayes had been using company money for these investments, Hayes sold the properties and returned most of the money, leaving the company at a loss of €65,000.
The investors did not get their money back, with a combined total loss of €101,000, the court heard.
Hayes, with an address at Belmont Green, Galloping Green, Blackrock, Co Dublin, pleaded guilty to three counts of theft and one count of inducing a person to invest money under false premises on dates between 2008 and 2011. He has no previous convictions.
When questioned by gardaí in 2015, Hayes denied making false promises to the investors. He was arrested in 2019 and again denied deceiving them. He pleaded guilty earlier this year.
The name of the company he worked for cannot be published as there are other matters still before the courts.
Jailing him for three years on Friday, Judge Martin Nolan said what Hayes did was “reprehensible” and a serious breach of trust.
“A lot of people suffered financially and, I suspect, emotionally, from their involvement with Mr Hayes,” he said. The judge said the loss of their nest eggs would have caused severe trauma for those involved.
Michael O'Higgins SC, defending, said his client was extremely embarrassed and remorseful for his actions, which he said was a “dishonest act and a wrong act”.
