THE FORMER chief executive of failed Dublin investment firm Custom House Capital was arrested earlier this week and questioned by detectives from the Garda Bureau of Fraud Investigation for 16 hours before being released without charge.
Harry Cassidy (56), a former banker, was arrested at about 7.30am on Wednesday and taken to Terenure Garda station for questioning. He was released at 1am on Thursday morning.
A Garda spokesman would only say a man in his mid-50s was arrested on Wednesday in an alleged fraud investigation and that a file was being prepared for the Director of Public Prosecutions.
Mr Cassidy, Ballintyre Walk, Ballinteer, Dublin, has previously been questioned by gardaí in the investigation. A call to his mobile telephone seeking comment was not returned yesterday.
A High Court-appointed investigation by two Central Bank inspectors into the firm found the “systemic and deliberate misuse” of €66 million of client money through false accounting to hide the transfer of the money to cover shortfalls in European property investments, mostly in Germany.
Mr Justice Gerard Hogan in the High Court said that by the time the company was wound up last year, it was exhibiting classic characteristics of a “full-blown Ponzi scheme”, with client accounts being raided to cover deficits elsewhere to create the impression the company was solvent.
The inquiry found “improper transactions” concerning €56 million in client funds and a further €10.4 million was owing to clients on an investment bond.
Mr Justice Hogan directed that copies of the inspectors’ 201-page-report be sent to the Minister for Justice, the Director of Public Prosecutions, the Director of Corporate Enforcement and the Garda.
It is understood that Mr Cassidy was questioned by gardaí about a trustee company called ARF Management, a separate business that he owned and controlled.
The firm is mentioned in the report by the High Court inspectors but no ruling was made on the firm as that type of business is not regulated by the Central Bank.
According to their report, Mr Cassidy told the inspectors that ARF Management held between €7 million and €8 million of customer funds in trusts and that about €3.5 million of those funds were moved into property investments of Custom House Capital.
He told the inspectors that he had discretion over the trusts and that he did not consult with their owners on the investment of the money in the properties.
The liquidator of Custom House Capital told the High Court in a report last March that he was co- operating with the investigation of the Garda Fraud Squad “into the activities of the company and in relation to ARF Management”.
