The company which claimed to have sold gold bullion to investors operated as a ‘ponzi-scheme’ and defrauded the customers, the High Court told

A company that claimed to have sold investors’ gold and silver bullion operated as a “ponzi-scheme” and defrauded its customers, the High Court has heard.

That company, Irish Gold and Silver Bullion Limited, (IGSB) The Crescent, South of Dublin with a registered address in Monkstown, was spun off last year, and chartered accountant Miles Kirby was appointed as the liquidator.

Mr. Kirby, arising out of a thorough investigation of the firm’s affairs, has led High Court proceedings against Nicholas Wickham, the firm’s director and sole shareholder, who is claimed to have gotten clients to put money into the IGSB, which the defendant knew. that could never be repaid.

Mr. Kirby, directed by Michael Quinlan of Arthur Cunningham BL, RDJ Solicitors, represented by John Kennedy SC, also claims that Mr. Wickham misappropriated client money to various entities for improper purposes, including making illegal payments for his own personal gain. .

Mr. Wickham concealed the extent of the financial position of the company and failed to maintain proper records; Mr Kirby said he made false representations that the money invested in the IGSB would be repaid if it were “disappointingly insolvent”.

It is claimed that the Ponzi scheme was operated by the IGSB for several years and that when Mr. Kirby was appointed as the liquidator, “the company had no stock of the precious metal.”

To date Mr Kirby says he has been able to identify €1.03m that remains attributable to the company’s creditors.

On Tuesday, Mr Justice Brian O’Moore gave lawyers for Mr Kirby a temporary freezing order, known as the Mareva injunction, against Mr Wickham and a company he allegedly owns, and Hamden Development. Controls Homes UK Ltd.

Mr. Kirby claims Mr. Wickham, who misappropriated funds from the IGSB in favor of another named defendant.

The injunction, which was granted on an ex-parte basis, prevents the defendants, with addresses in London and Watford in the UK, from reducing their assets, which include cash in bank accounts, worth more than €1.03m. is under.

Seeking the orders, Mr. Kennedy said that his client was seeking the freezing order over concerns that defendants might try to destroy those assets and put them out of reach of IGSB creditors.

The lawyer said Mr Kirby’s investigation revealed that the defendants have significant assets, in the form of several properties in Watford, with an estimated combined value of up to Stg £2m.

At the swearing in, Mr. Kirby said the IGSB’s business, he said, was straight forward.

The customers transferred their money to the company to buy gold and silver on their behalf, believing that it would be sold at a higher price to make a profit.

Mr Kirby said that payments actually made by customers were often used to pay other customers who had invested in IGSB in earlier times.

Other funds were diverted to third parties or rights related to Mr. Wickham, which Mr. Kirby claims were used to the defendant’s own benefit.

Mr Kirby said proper books and records were not kept by the IGSB, allowing Mr Wickham to “operate a Ponzi scheme” and “conceal his fraud”.

He said Mr. Vickam did not make any record of claims made by customers who paid money to IGSB, but did not yield any gold or silver.

This gave the impression that the assets of the firm matched the payments made by customers to the firm when there were a substantial number of unpaid creditors and a large deficit.

It is not possible for Mr. Kirby to determine the whereabouts of the assets of all the companies, including the cash invested in the company, or the precious metal stocks held by the IGSB, due to Mr. Wickham’s negligent attitude towards record-keeping.

Some €3m of gold and silver are believed to have been purchased by the company between May 2019 and June 2001, Mr Kirby said.

In addition, some customers were told that the valuable metals were being stored in safes at the world-famous Harrods department store in London and were equipped with certificates from the IGSB confirming their purchase.

However, Mr Kirby said Harrods confirmed to him that he had no transactions with the company since 2016, when he closed his accounts and that there was no gold in his vault for the company at the time of his appointment. was not.

This meant that the certificate issued was “a fabrication”, and that the gold customers believed was bought on their behavior, Mr. Kirby said.

Mr Kirby said that following his appointment as liquidator, on behalf of an IGSB client who owed more than €40,000, in June 2021 he wrote to Mr Wickham asking him for some information about the company.

No information has ever been provided by Mr. Wickham to Mr. Kirby.

In an email sent by Mr. Wickham, the liquidator was told that “there were credible threats to my (Wickam’s) life and that of my family.”

Mr Wickham also said that all of the company’s documents were “in a secure location in Ireland and that he would instruct a lawyer in Dublin.”

None of Mr. Wickham’s representatives ever contacted him, and when Mr. Kirby’s representatives arrived at the IGSB’s Monkstown office last August, the premises were evacuated and no files or computer equipment were found.

Mr. Kirby referred the matter to Gardai.

Mr Kirby said the IGSB’s office was also visited by the Garda Criminal Property Bureau.

Mr Wickham is also accused of operating a similar business in the UK, which has also been dissolved.

Legal claims by clients of that firm have been brought against Mr. Wickam in that jurisdiction, the court has also heard, including a claim where it is alleged that he had given 500 grams of gold bars to someone. supplied, which was gilded in gold.

A criminal complaint was also filed against Mr Wickham in 2018, where it was alleged that he had borrowed a gold bar worth £33,000 acquired by his firm for a client which he wanted to show to other clients, which he allegedly failed to return.

He made a partial payment in gold to the complainant, but it is alleged that the complainant owed gold worth an estimated £18,000.

After giving the freezing order, Justice O’Moore made the case returnable for a date in September.

He also imposed an order prohibiting the media from publishing details about the case until 12.01 p.m. on Wednesday 27 July, to give Mr. Kirby’s lawyers time to notify financial institutions of the order.

The judge also allowed the defendants to apply to the courts on notice to Mr. Kirby, seeking to change the freezing order.