Retired senior garda among investors suing Killally

A RETIRED Garda superintendent is among several investors suing former Fianna Fáil councillor Gerard Killally, a firm of solicitors and others for more than €10 million arising from an alleged land deal “scam” in Co Offaly in which Mr Killally allegedly made secret profits.

It is alleged that Mr Killally, unknown to the investors, had acquired the lands at Mount Lucas, Daingean, for some €4.7 million and arranged a scheme under which they were sold to the investors for €10.6 million in May 2007.

Former Garda superintendent Peter Wheeler said yesterday he had trusted Mr Killally completely when considering in late 2006 whether to invest in the purchase of lands at Mount Lucas as Mr Killally was chairman of Offaly County Council, had run in general elections and was of standing in the community.

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

Mr Killally instead represented he was a co-investor entering into a partnership with Mr Wheeler and others and had indicated at meetings with investors there would be no problem securing planning permission for the lands.

Mr Wheeler invested €73,000 while other investors provided sums ranging from €61,000 to €1.2 million.

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 land 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 and is listed to last three weeks.

At the outset, 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 was to be brought against Mr Killally, it was stated.

The other defendants have denied the claims against them.

It is claimed Mr Killally represented to investors the lands were available for sale for some €10.4 million from Frank Mulligan (father-in-law of Mr Killally) and Mr Mulligan’s partners and that Mr Killally was a co-investor.

Ronan Murphy SC, for the plaintiffs, said Mr Killally was in fact setting up a scheme to buy the lands from Mr Mulligan and partners for some €4.7 million and sell them on for twice the price to a group of people of which he purported to be a part.

Some €10.4 million was sought for lands from both the investors and the Educational Building Society when the lands were apparently sold for €4.7 million, itself an inflated figure as valuation evidence indicated the true value of what was sold was €3.25 million, Mr Murphy said. The lands were ultimately sold to the investors in May 2007 for €10.6 million.

It is also claimed Mr Killally told investors he held booking deposits of between €4.5 million and €6.3 million in relation to the selling on of sites on the lands once the investors had completed their purchase. While the investors could not say information supplied to them about booking deposits was “completely fictitious”, the contracts were never fulfilled, Mr Murphy said.

He added that it was his case that the solicitors acting in relation to the deal – Bourke Company, Walkinstown, Dublin – had grave concerns about whether those deposits were real but had not advised the investors of this.

Mr Murphy said a memo discovered by the solicitors firm for the action, dated March 8th, 2007, appeared to be an aide-memoire to someone in the firm concerning the Mount Lucas lands. It included the words: “Is the sale of three sites a scam and do the consortium know?” and also stated: “If they don’t know, GK will . . . on this.”

Mr Murphy said the word “will” in that sentence was followed by a word which was either “lie” or “die” but he could not make it out.