Sunday, August 16, 2009

Hair Brain Idea... or "money scam".....

I still don't get it... how people could believe that this project was ever going to materialize in the first place.... in January of 2006 the Oran Group owned by Richard Fitzgerald of Cork, Ireland rolls into Summerside and announces the biggest "hair brain development scheme" the regional development industry has ever seen... and as time goes on these plans get even crazier with the addition of seven storey towers on to the roof of the Waterfront Mall to be sold as high end condos with private elevators.... CBC and the Journal Pioneer are lapping it up as if it’s a “done deal”... delegations of City officials on the City's tab are traveling to Ireland pleading with the developer to start construction... and all the locals are figuratively "buying in" to the scheme..... and let's hope none of the locals put their money into it like the investors in the following story who were promised 50% returns by Mr. Fitzgerald... remember the old adage "if it seems too good to be true, it probably is"..... I wonder who's money the Oran Group used to buy the mall in the first place.....
Businessman agrees to repay €1.2m to investors
By Vivion Kilfeather
the Irish Examiner
Wednesday, February 11, 2009
A BUSINESSMAN alleged to have apparently converted to his own use some investment funds intended for a property investment project in Budapest has agreed to repay €1.2 million to four investors in the project.
Richard Fitzgerald, of Rose Lodge, Blackrock, Cork, consented to the judgment while proceedings were adjourned to next week by Mr Justice Peter Kelly against estate agent William Mahony, of Cobh, Co Cork, concerning the same project. The investors are Peter Clarke, of Mulberry House, Newbridge, Co Kildare, Brian Fallon, of Ladytown, Newbridge, Con O’Leary, Warrensgrove, Lissarda, Co Cork and Sean Bosco MacGearailt, of Greenane, Kenmare, Co Kerry. They claim Mr Mahony was "deliberately opaque" in an affidavit concerning how the Budapest property was financed. Mr Clarke said: "The entire financing of this transaction is murky in the extreme." He said it was difficult to accept, in the absence of relevant figures, Mr Mahony’s claim the sale price of €12.8m represented an overall loss on the project. He was also concerned Mary and JJ Frahill, a sister and brother-in-law of Mr Mahony, are to, or have already received, €1.5m of their €2.5m investment when the four plaintiffs were told just €90,000 — one ninth of their investment — was placed in their solicitors account. The Budapest project involved the purchase of a large apartment building to be renovated within two years and sold on. The four investors said they paid more than €1m in early 2006 on being told they would get a 50% return (€1.5m). After becoming increasingly concerned, they initiated court proceedings against Mr Fitzgerald and Mr Mahony. Mr Mahony has since alleged the only funds which Mr Fitzgerald put into the project was an €800,000 loan from Anglo Irish Bank. In his affidavit, Mr Mahony said he was persuaded by Mr Fitzgerald to invest €400,000 in the Budapest building and he also secured €2.5m from his sister and brother-in-law. Mr Mahony said he did not dispute the plaintiffs had paid over money to Mr Fitzgerald, but said it would appear Mr Fitzgerald "used this money for his own benefit". He had believed the project was financed by Anglo Irish Bank. He said the sale price achieved was €12.8m, a loss of €1.7m – €1.8m which, he said, was due to "the credit crunch". In an affidavit, Mr Fitzgerald said Mr Mahony was project manager for the Budapest development. He fully accepted the plaintiffs were entitled to be paid €1.2m, but he had no control over the proceeds of sale of the project.

This story appeared in the printed version of the Irish Examiner Wednesday, February 11, 2009


Anonymous said...

Wow - thats a pretty big story for a non-accredited journalist. Just goes to show real news does come from bloggers... I'm sure it will be in the guardian tomorrow morning though as they don't publish until sometime tonight.

No mention of it on either the guardian or cbc site so I guess you really are breaking this story.

Good for you...

Anonymous said...

i have been watching this deal unfold too. Its too bad that our city got sucked in by these amateurs. Now we have to figure out a way to get our beautiful waterfront property back from an Irish bank who has more into it than any well intended developer would be willing to pay. I think that our Government should investigate fraud and get the property back. Then the bank can pursue the same against ORAN.