Breifne O'Brien lived the high life as an investment adviser. But his business was based on a pyramid scheme and now many of his investors, some close friends, are facing total losses of between €16 and €19 million
LAST SATURDAY A number of very worried people gathered in the modern, bright offices of McCann Fitzgerald solicitors on Sir John Rogerson's Quay in Dublin. They had all invested millions of euro over a number of years through their friend, Dublin-based businessman Breifne O'Brien (47). They now had serious doubts as to whether they would be getting their money back.
O'Brien's friends believed he had the Midas touch. He lived on the exclusive Silchester Road, in Glenageary, Co Dublin, and for years had all the attributes of a successful businessman and investor. He had an attractive, assured personality, wore expensive clothes, and pursued a high-profile social life.
One of those present at the meeting in the solicitor's office was Louis Dowley, whose family have run a successful dairy farm at Tybroughney Castle, in Carrick-on-Suir in Co Tipperary, for generations. He had known O'Brien for approximately 20 years.
In 2003, a mutual acquaintance suggested that Dowley invest some of his money through O'Brien. He began giving substantial amounts of money to O'Brien to invest, as did his brother and business partner, Robert (49), who also has a farm in Carrick-on-Suir.
When the brothers handed over the first sum of money in or around December 1st, 2003, they believed O'Brien when he said it would be used to effect certain transactions that would create a return.
They were told the money would be left on account in an Irish bank, to their order.
Further sums were advanced up to October of this year, Justice Peter Kelly heard in the Commercial Court in Dublin this week. The brothers gave a total of €4.2 million to O'Brien to invest. They had "full confidence and trust in [O'Brien] and relied on his expertise and honesty in relation to their investments," the court was told by solicitor Brian Quigley of McCann Fitzgerald.
From October of last year the brothers have been looking for their money back. They received promises from O'Brien, and even cheques, but were told they should not be cashed until certain transactions had been finalised.
O'Brien even successfully pressed them to make further investments. In June of this year they gave €1.123 million, and in October a further €450,000.
The brothers were told the latter amount would help finalise a transaction concerning an option on a property in Paris, at 15 Place Vendôme, the court heard. This is the address for the Ritz Hotel, known all over the world for being the place from where Princess Diana was pursued by press photographers on the night she died.
The two farmers pressed O'Brien further, and on Friday of last week, they met with O'Brien in his home and he broke the news to them that they wouldn't be getting their money back. It was gone. The Dowleys contacted solicitor Brian Quigley and met with him that night. They met with Quigley again on Saturday, in the offices of McCann Fitzgerald. O'Brien was told about the meeting and turned up. He wasn't the only one.
The Commercial Court also heard this week the story of David Bell (88) and his son Peter, a solicitor, who live in Dundrum, Dublin 14. Peter went to school with O'Brien. David Bell advanced money to O'Brien to allow for the purchase of options on land in Co Meath. Quigley told the court on behalf of the Bells that although the money was to be used to facilitate O'Brien, it was not actually to be expended, but kept on deposit.
More than €1 million was advanced over a period of 10 years. Last weekend the Bells heard from other "investors" about the Saturday meeting in McCann Fitzgerald's and they went along too.
Another man who parted with money is Daniel Maher, a businessman who lives on Westminster Road, Foxrock, Dublin. On October 7th, 2008, Maher received an e-mail from O'Brien, whom he had known for 25 years. The e-mail outlined an investment opportunity in Paris. O'Brien said he had recently successfully secured an option on a property and sold it on for a profit. He now proposed doing the same again. Because he was assured there was no risk to his money, Maher advanced €450,000, expecting a 10 per cent return. Maher also heard about the meeting in McCann Fitzgerald's offices last Saturday, and attended.
David O'Reilly lives in Bray, Co Wicklow. He has known O'Brien for approximately 20 years, from the time they attended Trinity College, Dublin, where O'Brien studied economics and social science. O'Reilly spent time in the US where he made a substantial amount of money working in investment. He was also once involved in a restaurant business with O'Brien and others.
He gave $3 million and €1.3 million to O'Brien to facilitate the purchase of options on property. Again the court was told he was assured by O'Brien that the money was simply required so it could be placed on deposit. On Friday of last week, O'Brien contacted O'Reilly and told him he was in severe financial difficulties. He suggested O'Reilly contact Brian Quigley, which he did.
O'Reilly also attended the meeting at the solicitor's offices last Saturday.
EVAN NEWELL (54) is a Dublin businessman who has known O'Brien socially and by reputation for about 20 years. Last year in June he gave O'Brien €3.35 million to be held in a bank account so as to enable O'Brien to secure an option on lands in Munich, Germany.
In April of this year he gave a further €750,000 and in November €300,000. The money was to have been repaid earlier this month. On Friday of last week, Newell received a voicemail message to contact Quigley and "realised there were significant difficulties", the court was told. O'Brien then later contacted Newell and told him of the Saturday meeting, which Newell attended.
O'Brien comes from Cork, where his father was involved in business. He is a well-known figure in the south-Dublin social scene and features regularly in social columns. He attended a fund-raising dinner for Amnesty International in the Shelbourne Hotel in Dublin in late November, with his wife, businesswoman and socialite Fiona Nagle. The couple have three children; their youngest is less than a year old.
"He is a really good bloke," one long-time friend and colleague said of O'Brien this week, adding that he was "completely shocked" by what had been heard by the court.
O'Brien is now facing searching questions about the stewardship of funds he managed for friends and clients after he allegedly admitted to misappropriating some €16 million of their money. Details of what happened emerged in the Commercial Court in Dublin on Monday.
The funds were allegedly used to fund his lifestyle, make fictitious profit payments, keep his business interests afloat, and buy property. In documents opened before Justice Kelly, he is alleged to have admitted to "living a lie" for more than a decade in relation to his investment activities.
He had made a significant amount of money in a property deal in Cork city at the outset of the property boom, and his friends and associates believed his successful investment moves continued from there.
He owns a number of taxi and laundry-service companies in south Dublin. The accounts for these indicate they are very small businesses in money terms. But O'Brien's friends have always believed these formed part of a wider business portfolio.
According to Quigley's affidavit to the court, O'Brien was calm at last Saturday's meeting. At the outset he expressed his "deep sorrow". He explained that the money he'd been given hadn't been used as promised but had rather been used "to fund various uses including meeting [O'Brien's] personal liabilities and expenses and to fund payment to other investors as part of a scheme of fictional transactions involving returns paid to investors out of the money paid in by subsequent investors". In other words, a pyramid scheme.
O'Brien "expressly said that it was easy to pull suckers in when the economy was booming" but that "recent events made it impossible for him to continue his method of operation", Quigley told the court.
O'Brien "said that he had been living a lie for at least 10 years and for up to 15 years". He "made identical admissions in relation to at least 11 other individuals in respect of which he calculated a total liability of between €16 million and approximately €19 million", the court was told. These other investors were not named.
O'Brien told Quigley he'd spent approximately €4 million of the money he'd been given on his personal and family lifestyle; the same amount again to pay fictitious profits to investors; and the same again to keep his business interests afloat. A final figure of approximately €4 million had been spent on property.
Quigley's affidavit on behalf of the Bells said O'Brien had expressed a hope during the Saturday meeting that "his sister's husband, a senior and respected financier who is also an investor . . . might be prepared to invest or lend or pay money to [O'Brien] . . . to enable him to make some initial payments to his creditors". O'Brien put this hope at between 10 and 20 per cent, the court was told. The financier is a wealthy Frenchman involved in the funds business who is married to Aoife O'Brien.
Quigley outlined in the same affidavit that O'Brien said he had over the past two months received "investments" of €6 million, €5 million of which he'd used to repay one investor, and €600,000 of which he used to repay another. O'Brien told Quigley he had a house in Barbados and a rented property in France.
The court granted an interim order to January 12th next, forbidding O'Brien from reducing his assets below €20 million. O'Brien has to produce a statement of his assets by that date. Quigley's clients want their money back. From what the court has heard, they have reason to be worried.
