Detectives from PSNI Organised Crime Branch have welcomed the sentences imposed on seven people who admitted their involvement in a mortgage fraud amounting to more than £1.5 million in the north west of the province.
Although sentencing took place last June, matters can only now be reported following the completion of other proceedings.
Businessman John Gaile (52) set up a scam with members of his family and Coleraine solicitor John Hickey (56) which involved applying for mortgages using inflated purchase prices for business and residential properties mainly in the Coleraine area.
The majority of mortgages sought had been obtained using the services of Holywood independent financial advisor William Larmour (63).
This meant banks and building societies offered greater loans than would otherwise have been available to Gaile who benefited by having to contribute less from his own funds.
In a period from September 1995 until April 2008 Gaile sold the properties, sometimes to family members or to Hickey, either taking the profit gained or using it to fund the purchase of another property whose mortgage was similarly obtained by deception.
Financial investigators in Organised Crime Branch calculate the total value of the mortgages obtained and subject to pleas entered in court was in excess of £1.5 million.
Police calculate the total profit to all seven defendants through the acquisition and sale of the properties concerned amounted to more than £483,000 while the loss to lenders through repossessions amounted to more than £557,000.
John Gaile, Hickey and Larmour were sentenced on June 18 at Laganside Court for the scam which involved a total of 26 property transactions.
Along with co-accused Paul Gaile (50), Lena Gaile (49) Lee Paul Gaile (29) and Kieran Gaile (30), they pleaded guilty to a total of 76 charges including mortgage fraud & acquiring criminal property.
The following sentences were imposed:
* John Gaile – two years’ jail, suspended for three years, for 19 counts involving obtaining services by deception, acquiring and converting criminal property (money laundering).
* John Hickey – two years’ jail, suspended for three years, for 51 counts involving obtaining services by deception, fraud by false representation and money laundering.
* William Larmour – conditional discharge for failing to disclose money laundering.
* Paul Gaile (brother of John Gaile) – one year in jail, suspended for three years, for two counts of money laundering. * Lena Gaile (wife of Paul Gaile) – six months in prison, suspended for two years, for two counts of money laundering.
* Lee Paul Gaile (son of Paul and Lena Gaile) – six months in prison, suspended for two years, for three counts of money laundering.
* Kieran Gaile (son of John Gaile) – conditional discharge for two counts of obtaining services by deception and fraud by false representation.
Detective Constable Sam Kinkaid, from Organised Crime Branch, said: “An investigation into John Gaile’s frequent acquisition of property in the north west identified his use of fraudulently obtained mortgages.
“The scam involved the use of false purchase prices which were provided to various lenders through financial advisor William Larmour and solicitor John Hickey. A number of the properties were sold amongst Gaile family members with the aim of continuing the scam and generating more profits.
“Hickey became part of the scam to defraud lenders and then used the system to buy properties himself. He has been struck off by the Law Society.
“Larmour’s benefit was confined to the fees payable to him for processing the mortgage applications during a period in which he was part of the regulated financial sector. These fees were estimated to be approximately £5,000.
“This group was involved in a scam to make money from inflated mortgage applications. They thought they could beat the system by continuing with their criminal activity.
“But an extensive investigation by Organised Crime Branch detectives picked its way through the trail of purchases and applications to uncover a criminal enterprise which was centred on the Gaile family but enabled by Hickey and Larmour.
“This case is a reminder to anyone who thinks they can get away with large scale fraud that there is every likelihood they will be apprehended by police and have to suffer the consequences, financial and otherwise.”
Last week another defendant, Patrick Gaile (51), stood trial on one count of obtaining a service by deception and was found not guilty by a jury at Belfast Crown Court.
The conclusion of this trial enabled a previous reporting restriction on the case to be lifted.