The former chief executive of Custom House Capital (CHC), jailed for his role in a €61m conspiracy to defraud investors in the firm over a decade ago, has appealed his prison term, arguing it was wrong for a judge to “pluck” a headline sentence of 14 years “out of the air”.
Harry Cassidy (68), of Clon Brugh, Aitkens Village, Stepaside, Dublin pleaded guilty to conspiring with others to defraud investors in, and clients and customers of, CHC.
All of the offences occurred between October 1st, 2008 and July 15th, 2011.
A total of 197 victim impact statements were submitted at the sentence hearing, where CHC clients spoke of the financial losses they had suffered and of the emotional and psychological effects they and their loved ones had faced over the last 10 years.
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Judge Orla Crowe began with a headline term of 14 years when Cassidy was sentenced at Dublin Circuit Court last May but reduced this to seven years, after taking mitigation into consideration. Cassidy was also given credit for the two months he spent in custody in Germany, giving him an effective sentence of six years and 10 months.
Judge Crowe said victims were “systematically deceived in a sophisticated operation” which was carried out for over two years by people who owed them fiduciary duties. She said the offending was “most egregious” and involved a “gross abuse” of trust and duty.
She said the fact that the fraud involved pension money was a “particularly aggravating factor”.
At the Court of Appeal on Tuesday, Hugh Hartnett SC, for Cassidy, said a decision had been made at the time to borrow “from Peter to pay Paul” in the hope that “things would come right eventually”. He said this should be distinguished from other cases where money was “embezzled” solely for personal gain or to fund a certain lifestyle.
“There is a moral difference,” he said. “The court failed to take that into consideration significantly when passing sentence.”
He suggested the headline sentence was “wrong” and should not have been set at 14 years, arguing that anything more than 10 years was incorrect.
Counsel for the State asserted there was no error in sentencing and said the discount of almost 50 per cent to the original headline sentence given by the judge was “extraordinarily generous” in the circumstances.
“The damage that was wrought by the scheme put in place by Harry Cassidy is something that has not been seen by this country before,” said counsel for the DPP Lorcan Staines SC, noting that a total 202 victims came forward to give statements in the case, a number of whom were present in court for the appeal hearing today.
Mr Hartnett told the three-judge appeal panel it was wrong for a court to “merely pluck” a figure of 14 years as a headline sentence “out of the air”.
“One cannot have an arbitrary decision without any principle behind it,” he said. “There must be a reference to clear principles, for instance a reference to comparator cases or to legislation. There must be some form of grounding, some sort of plinth for this and there wasn’t.”
He suggested the judge erred in imposing a sentence which was disproportionate having regard to similar sentences including those imposed on the appellant’s co-accused. Mr Hartnett submitted that the sentence was “excessive, disproportionate, overly punitive and oppressive in all the circumstances”.
Mr Staines said the maximum sentence for these offences was one of life in prison. He said the trial judge had to select a point on the scale from “zero to life in prison” and from that point she then took mitigating factors into consideration when deciding what discount to give. He said the judge couldn’t have placed this case in any category other than the highest end of the ranges available.
Mr Hartnett also argued that the sentencing judge failed to take account of a number of mitigating factors in the case, including the appellant’s advancing age and health issues. He said Mr Cassidy was undergoing tests for cancer at the time of sentencing and has subsequently been diagnosed with prostate cancer, for which he is receiving treatment in prison.
Cassidy had also lost his family home, had been obliged to enter into bankruptcy and had lost his career in financial management. “When he walks out of prison he can never work in his chosen field of financial management again and surely that is a significant factor,” said Mr Hartnett.
He said before his incarceration, the appellant had been working as a foreign language teacher online earning about €24,000 a year.
Counsel further submitted that the judge erred in failing to afford adequate weight to the evidence that Cassidy was motivated by an intention to preserve and protect money invested in Custom House Capital.
“One has to give the benefit of the doubt when someone is trying to save a company,” said Mr Hartnett.
Mr Hartnett highlighted the Anglo Irish Bank case which, he said, involved deception that had helped to bring the country to “its financial knees”.
He referenced a number of Anglo related cases for comparison, including that of former Anglo Irish Bank CEO David Drumm who was jailed for his role in a €7.2 billion banking fraud. The lawyer said in that instance a headline sentence of eight years had been set and this had been reduced to six years after mitigation. He said all of the mitigating factors in that case were also present in this case along with others, including Cassidy’s advanced age, ill health and his plea of guilty.
“Is there value in this comparison? I submit there is,” said Mr Hartnett.
Mr Staines said there were differences in the Anglo cases cited by Mr Hartnett and Cassidy’s case. He said in the Anglo case, balance sheets had been inflated artificially, the consequence of which was that an investor would be misled as to the health of the bank.
“The Anglo case wasn’t actual money,” he said. “In this case you’re dealing with real money from real people both big and small.” Mr Staines said this has resulted in “really significant hardship” for people.
Mr Justice John Edwards, sitting with Ms Justice Tara Burns and Mr Justice Michael MacGrath, said the court would reserve judgment.
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