On 21 October 2011, liquidators were appointment in the case of Custom House Capital. The investment company was known for attracting high net worth clients before it went bust. In the latest court case in November, there were allegations that Harry Cassidy and John Mulholland embezzled in excess of €2.3m for their own benefit.
But what about the victims of Custom House Capital? I have written a few blogs over the years on Custom House Capital and people have been in touch, looking for more information. I recently asked them what was their story and how has this affected them.
Michael, 53 years of age and self employed in the construction industry.
How much did you invest with Custom House Capital?
€65,000
What was it for? eg. pension, investment
Pension fund
Where did you invest your money?
Scheme was sold to me by Canada Life who later disowned the whole thing and told me it was a self directed fund and nothing to do with them. My advisor told me he was forbidden to talk to me about Custom House Capital by senior management. While he was sympathetic on a personal basis this didn’t benefit me at all!
Do you know where your money ended up?
Nope – I was told that the building had dropped in value and was being sold and I had no say in it or any way to verify if what was said was even true. There has been no property crash in Germany that I have heard of. Canada Life didn’t make any representations on behalf of the investors as the sooner the Custom House Capital embarrassment went away the better, as far as they were concerned. If the property had been left for a few more years then perhaps we could have gotten our money back.
What have you heard back with regards to when you can access your money?
Been told it’s dead and gone.
How has this affected your life?
On the advice of Canada Life I split my pension into 3 funds, 3 apartments I bought in Salford, Custom House Capital property fund in Germany and shares, later cashed out as the stock market headed south. I used the cash fund to keep financing the 3 apartments in Salford during the construction crash here and was hoping that the German fund would mature in time to allow me to complete the purchase of at least 1 of the 3 apartments outright. By then my hope was that as the construction market here improved I could restart making payments for the remaining apartments as well as using the rental income for the one that should have been fully owned by me to keep this going. Cerberus foreclosed on the 3 apartment mortgages last year (non recourse thankfully) and now I’m left with nothing in my pension pot. All during the boom times I put as much money into my pension as I could but it’s all lost now. So to answer your question about the effect on my life – I will never retire – I can afford life insurance now so it would be best if I died before retiring age.
Padraig, 69 years of age
How much did you invest with Custom House Capital?
€1,220,000
What was it for? eg. pension, investment
Pension
Where did you invest your money?
In Custom House Capital Property Funds
Do you know where your money ended up?
Some (about €11,000 cash) was taken from my PRSA by Custom House Capital and I never got it back. Instead, I received €6500 from the ICCL as compensation. About €400,000 of my PRSA was invested by Custom House Capital in Property Investments in France; Germany & UK; I am expecting to get back about 30% of my investment when the liquidator sells off the French & German properties. There is no indication when I will get that money. A further €900,000 from my PRSA was invested in a property in Scotland which dropped in value when properties all over Europe fell in value in 2008. This is now worth about €300,000. The liquidator is not planning to sell this property. Instead it will be returned to my PRSA as an investment. I have no idea when.
What have you heard back with regards to when you can access your money?
See above.
How has this affected your life?
I wanted to retire when I reached 66 years, but could not afford to. I am still working, but I hope to retire next year if I get my money back from Wallace. If everything works out for the best, I will have a much smaller pension, and much later than planned. Wallace is now taking fees out of investors remaining money for “Fund Management Services” which he claims he is entitled to do, even though he provided no services to me or any of my colleagues over the past 4 or 5 years.
Alice, 55 years of age
How much did you invest with Custom House Capital?
€100,000
What was it for? eg. pension, investment
Investment
Where did you invest your money?
First Germany Fund
Do you know where your money ended up?
I have been told that it was all invested in the Germans fund but who knows
What have you heard back with regards to when you can access your money?
I have been told that when receiver gets to it I will then know and no sooner
How has this affected your life?
All of our money was invested so all our hard earned cash was sunk into this project in 2006. I spoke to Harry Cassidy prior to sending him my cheque. It seems like the courts and receiver are dragging their heels.
Sean, 38 years of age
How much did you invest with Custom House Capital?
€500,000
What was it for? eg. pension, investment
Property investment in Munich
Where did you invest your money?
As above
Do you know where your money ended up?
Yes, it did go into the correct property but so did a lot of money belong to other clients who thought their money was on deposit
What have you heard back with regards to when you can access your money?
I cant, waiting on the sale of the property to see what comes back. Expecting max 30% if that of a return ie €150,000
How has this affected your life?
The only investment that has gone bad for us but has prevented us from moving office and growing the business. Disaster.
Mary, age 75
How much did you invest with Custom House Capital?
Over several years from inception of Custom House Capital – €669,000
What was it for? eg. pension, investment
Pension
Where did you invest your money?
In 2007 the reported total valuation was €933,000, segregated equities 45%, equity funds (pooled) 15%, properties 30%, cash/cash funds/gilts 10%
Do you know where your money ended up?
Retrieved segregated equities €262,000 but had to pay liquidator. Apart from that I assume cash etc was plundered to prop up other property investments. Information from KPMG is minimal – emails often ignored, promises to call back not always kept.
What have you heard back with regards to when you can access your money?
Letter from Liquidator dated 1 December 2011 estimated timeline for completion of asset reconciliation as follows:-
Equities, bonds, cash – within 3 months. Property – 3-6 months. Since then, no updates and four years later, where are we?
Liquidator is probably too busy with other more lucrative jobs.
I received €15,200 compensation from ICCL in September 2013. Since then, nothing. I expected to receive the full €20,000 as I believe the cash misappropriated from me was probably €32,000. I have asked KPMG for an explanation but have not yet received a response.
How has this affected your life?
It has forced me to keep working long past my intended retirement age of 70. In the meantime I have contracted cancer of the nasopharynx, which I won’t blame on Custom House Capital. My ill health has however taken the emphasis off the financial worries. I’m conscious that other investors are in a much worse situation.
Diarmaid from Kildare, age 43
How much did you invest with Custom House Capital?
€38,000
What was it for? eg. pension, investment
Pension
Where did you invest your money?
Through a Canada Life tied agent
Do you know where your money ended up?
In 3 properties in Germany, The Tri Dominium Fund
What have you heard back with regards to when you can access your money?
No, we were told at a meeting in Bastow Charlton that they value of the properties was below the loans on it and the banks were foreclosing.
How has this effected your life?
Given me a bad feeling about the whole pension and fund market. Showed me that customers are not always right and have few rights at all. Its also proved to me that comeback is poor through tied agents and the big boys wash their hands of it. It also showed that with the best will, and there was a great will among our group, we, as modest people, have not got reasonable methods available to get redress.
I contacted The Central Bank to see if they wanted to comment on their role in helping the victims of Custom House Capital. They put an information embargo in place 4 years ago to “ensure misleading information is not issued to clients about individual investment holdings pending the completion of reconciliation work by the Official Liquidator” . When asked if they are trying to get these issues completed, they told me they “are for the Courts to determine”. Our brief email conversation can be read here.
The Court case over fees and what went on in Custom House Capital rumbles on. The next court case is due to be before the Examiner’s Court on 4 February 2016. In the meantime, according to the last Liquidator’s Statement of Proceedings and Position of Winding Up which was submitted to the CRO on 30 November 2015, the liquidator’s fees for 2014 are €846,716 and legal fees for that year are €539,788. In the meantime, the victims of Custom House Capital are told nothing.
Are you a victim of Custom House Capital? What is your story and how has it affected your life? You can contact me directly at steven@bluewaterfp.ie
Other blogs on Custom House Capital: Custom House Capital Meeting , What happened at Custom House Capital? Part 1 , What happened at Custom House Capital? Part 2 , Custom House Capital Update