Investors in scam may get fifth of their money back
Chris Donegan • Published 19 Jan 2012 13:00
Fermanagh investors who poured tens of thousands of pounds into a suspected Ponzi scam will be lucky to get back 20 per cent of their money, according to a financial expert.
The FSA (Financial Services Association) is investigating the alleged fraud and has seized assets worth over £20 million and the authorities in the Republic of Ireland seized a further 20 million euro. The money will eventually be redistributed among investors but they will only get back a fraction of what they put in.
That means the Irvinestown businessman who invested £116,000 into Francois de Deitrich's scheme would only get around £23,000.
Last week a financial adviser escaped injury in a gun attack near Belleek. He was driving his black Volvo close to the Lough Shore Road at Roscor when it was attacked.
The man has been associated with de Deitrich and another alleged fraudster accused of swindling individual investors of up to £200,000.
There has been speculation that the gun attack was carried out by a disgruntled investor looking for their money back.
There are believed to be dozens of people in Fermanagh who have been duped into putting money into the Ponzi, a fraudulent investment scheme that pays returns to investors from their own money, or money paid by subsequent investors, rather than from any actual profit earned.
One high street bank has revealed that eight of its customers in Fermanagh invested money with de Deitrich, who operated a company called ETIC Solutions and had offices in Ballybofey in Donegal. Multiply those eight by the number of banks and building societies in town and add in all those people who invested cash stashed "under the bed", away from the tax man, and you get an idea of how many potential victims there are. They are thought to include members of the travelling community and officers in the PSNI.
A financial expert said investors would be lucky if they got back 20 per cent of what they had put into the fraudulent scheme.
He said up to 60 per cent of the people who were duped by de Deitrich had come forward to the Financial Services Authority in Northern Ireland. Others may be reluctant to do so because they had not declared their investment money to the tax man.
De Dietrich is a former President of the Letterkenny Lions Club and a former Entrepreneur of the Year. Nicknamed Swanky Franky by former employees, he was tracked down in his native France by a BBC Spotlight investigation team. A warrant has been issued for his arrest for failing to divulge the extent of his worldwide assets.
Although millions have been recovered, the financial expert believes investors will suffer huge loses.
"After court, professional fees and the liquidators costs are extracted from the proceeds there will be attempts to re-connect the money with the rightful owners," he explained.
"They will now be paid back some of their investment on a pro-rata basis when PricewaterhouseCoopers, which was appointed liquidator on both sides of the Border to Etic Solutions Ltd., owned by Mr. de Dietrich, has completed its inquiries. For instance, if someone put in £20,000 and it was established they had already paid tax on this money, they have no tax liability, but they will get a pro rata payment - not all of what they put in. This process could well take at least a year to sort out," he said.
"However, if hot money was invested - money that had not been declared to the tax man - that is a different matter altogether and there are serious implications and it is highly unlikely they might come forward at all. The liquidator is now in control of the cash and it is up to the individuals to make their cases and they will be dealt with according to their bona fides," the expert added.
De Dietrich, who served three prison terms in France for fraud in the 1990s, including one in which his own brother was a victim, has been on the run since last February.
A European arrest warrant is being prepared in an effort to extradite him back to Ireland to face charges here.
This article appeared in Impartial Reporter 19 Jan 12
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