Business

Court asked to impose disqualification order on director of ‘Ponzi scheme’ company

Gold and silver bullion company allegedly defrauded its customers

The High Court has been asked to impose disqualification orders on the shareholder and director of a gold and silver bullion company that allegedly defrauded its customers and operated as a 'Ponzi scheme'. Photograph: Bryan O'Brien

Aodhan O'Faolain
Tue May 2 2023 - 18:33

The High Court has been asked to impose disqualification orders on the shareholder and director of a gold and silver bullion company that allegedly defrauded its customers and operated as a “Ponzi scheme”.

The application has been made in respect of Nicholas Wickham over the running of his company, Irish Gold and Silver Bullion Ltd (IGSB), with a registered address at The Crescent, Monkstown, South Co Dublin.

The firm was wound up in 2021, and chartered accountant Myles Kirby was appointed as liquidator.

Following his inquiry into the company’s affairs, Mr Kirby obtained court orders, including orders freezing assets, against Mr Wickham and a company he allegedly owns and controls called Hamden Development Homes UK Ltd.

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When the matter returned before the High Court on Tuesday, Arthur Cunningham BL, for Mr Kirby, told Mr Justice Brian O’Moore his client has settled proceedings against Mr Wickham, who the court heard is now co-operating with the liquidator.

While the settlement terms are confidential, counsel said Mr Wickham has committed assets towards the company’s deficit, which at the time of Mr Kirby’s appointment was estimated at €1 million.

Counsel said it had been further agreed that as part of the settlement, all previous orders granted against Mr Wickham, including the freezing orders, are to be vacated.

Counsel told the judge it remains a matter for the court to consider how long a period of suspension should be imposed on Mr Wickham from acting as a company director.

Counsel said there could be no question that the company was operated in a fraudulent manner, and a lengthy disqualification of over 10 years could be considered.

However, counsel said that, from the liquidator’s perspective, there were mitigating factors the court should take into account, including the fact that Mr Wickham is now co-operating with Mr Kirby. Mr Wickham should be given a discount of between 40 per cent to 50 cent.

Mr Cunningham, instructed by Michael Quinlan of RDJ solicitors, added that ultimately the length of any disqualification was a matter for the court, counsel said.

The liquidation of the company remains ongoing.

Mr Wickham was not in court or represented by lawyers when the application was heard.

In a sworn statement, he asked the court not to impose any period of disqualification, submitting the court should take into account his age – that he is in his early 60s. A lengthy period of disqualification would impact on his ability to earn a living.

Mr Wickham added that the case had attracted significant media coverage, which he said has affected his reputation.

After hearing counsel’s submissions, Mr Justice Brian O’Moore reserved his decision and said he would give his ruling at a later date.

In his proceedings against Mr Wickham, Mr Kirby claimed the UK-based businessman recklessly got customers to put money into IGSB which the defendant knew could never be repaid.

Mr Kirby also claimed Mr Wickham misapplied customers’ money to various entities for improper purposes, including making unlawful payments for his own personal benefit.

Mr Wickham concealed the extent of the company’s financial situation, failed to maintain proper records, and gave false representations that funds invested in IGSB would be repaid when it was “hopelessly insolvent”, Mr Kirby claimed.

It was claimed a Ponzi scheme was operated by IGSB for several years, and when Mr Kirby was appointed as liquidator there was no stock of valuable metal in the company.

Mr Kirby alleged IGSB’s business was operated on the basis that customers would transfer their money to the company to buy gold and silver on their behalf, believing it would be sold off at a higher price to generate a profit.

Mr Kirby said that in reality, payments made by customers were often used to make payments to other customers who had invested in the IGSB at an earlier time.

Other funds were diverted to third parties or entities related to Mr Wickham, which Mr Kirby claimed were used for the defendant’s own benefit.

When the matter was previously before the court, lawyers acting on behalf of Mr Wickham and the defendant company denied any wrongdoing and opposed Mr Kirby’s actions.

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