Courts

Man allegedly involved with credit card scam fails to overturn order for $700,000 to be given to State

The High Court declared in 2011 that the sum seized by the Criminal Assets Bureau was the proceeds of crime

Harry Zeman. Photograph: Colm Keena

Ellen O'Riordan
Sun May 12 2024 - 09:22

A man alleged to have been among those behind a US$700,000 credit card scam has failed in his bid to overturn an order allowing the State to take the money.

The Court of Appeal on Friday dismissed all grounds of appeal advanced by Harry Zeman against a 2022 High Court “disposal order” for the sum to be transferred to the Minister for Public Expenditure and Reform.

The High Court had already ruled, in January 2011, that the $697,000 seized by the Criminal Assets Bureau (Cab) was, on the balance of probabilities, generated by way of a fraud. The court had heard the amount was collected by Routeback Media AB – of which Mr Zeman is a director and shareholder – over just four days as part of a scam primarily targeting card holders in the US.

The 2011 ruling went unappealed.

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Mr Zeman unsuccessfully contested the Cab’s 2018 application for a “disposal order” providing for the amount plus interest to be transferred from a receivership account to the State. Ms Justice Carmel Stewart granted the order in 2022 against Mr Zeman and Routeback.

Dismissing Mr Zeman’s appeal of the disposal order, Mr Justice Donald Binchy said the appeal raised a question as to whether the court may revisit an initial proceeds of crime declaration in later applications advanced under the 1996 Proceeds of Crime Act.

He said Routeback claimed ownership of the money, while it and Mr Zeman both maintain that the sums are the source of legitimate business activity and not the proceeds of crime.

Outlining the background, he said Swedish firm Routeback entered an agreement in 2002 with a credit card payment processor in Ireland after holding itself out as a business that sold $9.95 “email for life” accounts.

Almost immediately after the agreement became operational, in October 2002, the processor became concerned when some 10,000 transactions submitted by Routeback were rejected by card issuing banks for various reasons, including that the card was stolen or there were insufficient funds, the judge said.

He said the Cab alleged in the High Court that Routeback was never in a position to sell the email services it was purporting to offer. It claimed Swedish police sent information regarding Mr Zeman’s alleged ties to organised crime, said Mr Justice Binchy.

Mr Zeman denied all of the claims and emphasised that out of 79,445 transactions submitted by Routeback, 6,914 were disputed by cardholders who were then refunded the amounts. The remaining 72,531 transactions were not disputed, so Routeback is entitled to the payments made by those cardholders, he contended.

He denied the bureau’s claim that Routeback would have been unable to provide the email service.

Mr Zeman’s appeal was grounded on a claim that Ms Justice Stewart incorrectly assessed the motion before her and erred in how she responded to his claim that the Proceeds of Crime Act does not apply to corporate entities. He also alleged the judge was wrong to conclude the earlier crime proceeds determination could not be challenged at a later stage.

The bureau contested his appeal, which was dismissed on all grounds.

Mr Justice Binchy said Mr Zeman failed to discharge the burden of proof of demonstrating the money is not the proceeds of crime or that the 2011 declaration gave rise to an injustice.

He described as “misconceived” Mr Zeman’s assertion that the bureau failed to establish that the alleged conduct is not an offence in Sweden. The judge said the bureau relied on Routeback’s inducement of a financial services provider to process fictitious credit card transactions in Ireland for the purpose of making a gain for Routeback and causing a loss to the provider and/or credit card holders.

His ruling was supported by his colleagues Ms Justice Aileen Donnelly and Ms Justice Una Ní Raifeartaigh.

Ellen O'Riordan

Ellen O'Riordan

Ellen O'Riordan is an Irish Times reporter

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