Defendants in Nama fraud trial ‘motivated by greed’ to act dishonestly
By Jonathan McCambridge, PA
Two men facing fraud charges linked to a £1.1 billion (€1.6 billion) property deal in Northern Ireland were “motivated by greed” to act dishonestly, a jury has heard.
Belfast Crown Court was told that prominent Belfast businessman Frank Cushnahan and former law firm managing partner Ian Coulter expected to be paid millions of pounds each as a “success fee” for the sale of the Northern Ireland property loan book held by the National Assets Management Agency (Nama).
Barrister Jonathan Kinnear KC opened the prosecution’s case in the long-awaited trial on Monday afternoon.
Nama was set up by the Government in 2009 during the financial crisis to offload non-performing loans acquired from troubled banks.
Cushnahan, 83, of Alexandra Gate, Holywood, Co Down, was a former adviser to Nama, while Coulter, 54, of Templepatrick Road in Ballyclare, Co Antrim, was a senior figure in the law firm Tughans.
The loan book was sold to a US investment fund in 2014 in a deal named Project Eagle.
Cushnahan is charged with fraud involving a failure to disclose information between April 1st and November 7th, 2013.
Cushnahan and Coulter are both charged with fraud by false representation on or around April 3rd, 2014.
Coulter is also facing four further charges of fraud, fraud by false representation, removing criminal property and transferring criminal property from Northern Ireland.
Both men deny all the charges.
Mr Kinnear told the jury: “The purpose of Nama was to take over billions of property development debts held by a number of the major Irish banks.
Motivated by greed they both acted dishonestly, withholding information and providing false information to ensure that they shared in the massive profits which were available
“This case relating to these two defendants relates to the sale of approximately £4 billion worth of those debts which were secured largely against property in Northern Ireland.
“That £4 billion package of debts was sold for £1.1 billion.
“The defendants Mr Cushnahan and Mr Coulter were heavily involved in the brokering and arrangement of that deal.
“In return for their work they were to be paid millions of pounds each, we say, from a success fee of about £15 million.”
The barrister added: “Motivated by greed they both acted dishonestly, withholding information and providing false information to ensure that they shared in the massive profits which were available.”
Mr Kinnear said Coulter had bought a company in the Isle of Man and used a fraudulent invoice to extract £7.2 million from Tughans.
He said: “He did so in order to launder his ill-gotten gains by removing them from Northern Ireland into a bank account that only he had control over with the intention thereafter of paying both Mr Cushnahan and himself.”
The jury was told Cushnahan is a “well-known business figure in Northern Ireland”.
Mr Kinnear said: “He was known and indeed trusted by many prominent politicians.
“As a result of his profile in 2010 he was appointed as an external member of the Nama Northern Ireland Advisory Committee (Niac).”
He said Niac was set up by Nama to advise how it might deal with the property debts it owned in Northern Ireland.
The barrister said: “As a member of that committee Mr Cushnahan was under a legal duty to disclose any conflict of interest that he had.
“We say in breach of this legal duty Mr Cushnahan secretly worked on a deal for the whole of the Northern Ireland loan book to be sold by Nama to an American fund called Pimco.
“The prosecution case is that without telling Nama he was involved with Pimco he provided assistance to Pimco in the expectation that he would receive a success fee of several million pounds.”
The jury heard that shortly before the deal was due to complete, Nama found out that Cushnahan had been assisting Pimco, and the deal fell through.
Mr Kinnear continued: “That wasn’t the end of it.
The story, as we will see, is long. There are quite a lot of documents, but it is not particularly complicated
“Instead a new buyer, another American fund called Cerberus, was found, and the deal for the sale of the Northern Ireland loan book was eventually completed for that price, about £1.1 billion.
“The prosecution’s case is that Mr Cushnahan continued to help from the shadows and expected to receive his cut of the £15 million success fee.”
The barrister said that Coulter had been introduced to the sale of the Northern Ireland loan book by Cushnahan.
He said that the two defendants had “worked to persuade the politicians in both Dublin and Belfast that the sale of the Northern Ireland loan book would be a positive benefit to all”.
He added: “They also sought out, met and encouraged and assisted potential buyers.
“They did this because they expected to receive and share a very substantial success fee.”
Mr Kinnear said there was “nothing intrinsically wrong” with the principle of a success fee being paid on the back of a transaction.
But he added: “It was the way in which these two defendants went about it and the way in which Mr Cushnahan did not reveal that he was involved in the deal to the entity which was selling the deal.”
Addressing the jury Mr Kinnear said: “The story, as we will see, is long. There are quite a lot of documents, but it is not particularly complicated.
“Ultimately, you will need to decide if the defendants acted dishonestly.”
The trial continues.
