A DUBLIN solicitor who admitted secretly gambling and losing €2.4 million of client funds on the stock exchange has been suspended from practising and his firm’s accounts have been frozen by the High Court.
Much of the lost funds – some of which were gambled on contracts for difference – were due to go to the Catholic Church in Dublin from a client’s estate.
Ruairi Ó Ceallaigh (39), who with his younger brother Cormac (37) ran the firm of Seán Ó Ceallaigh & Company since 2003, “breached the ethos bred into us by our father and has conducted a lie since he misappropriated bank funds and client funds”, said Cormac Ó Ceallaigh in an affidavit. He had trusted his brother implicitly, he added.
The total liabilities of the firm, which employs 14 people, may exceed €4 million, a Law Society investigator said.
Seán Ó Ceallaigh (79) founded the firm 52 years ago, and was in court yesterday with his wife and sons.
The court heard Cormac was shocked when Ruairi told him in late July of a big problem.
Ruairi had drawn down a loan of €1.5 million from Allied Irish Banks against four properties in 2007, but used the funds to buy shares instead of paying off the existing mortgages on the properties.
AIB was making inquiries about the matter, and Cormac, who had signed undertakings that AIB’s charge would be perfected, had not fulfilled those undertakings.
Worse was to come when Ruairi told Cormac in mid-August there was a €2.4 million deficit in the firm’s client account. Ruairi had used the money to gamble on shares.
Cormac then alerted lawyers and the Law Society.
Ruairi Ó Ceallaigh had a gambling problem, his solicitor Vincent Crowley said yesterday, and was having treatment. He apologised for all his actions and would take all steps he could to ensure restitution.
Mr Justice Charleton yesterday refused an application by the brothers to hear the matter in private. He said these events were a blow against an eminent firm but, while he had much sympathy for the family, he must make an order freezing the firm’s accounts given the importance of maintaining public trust in solicitors.
He suspended Ruairi Ó Ceallaigh’s practising certificate due to his admitted “fraudulent conduct”, but declined the society’s application to suspend Cormac after stating there was no evidence of dishonesty by him or that he was anything but a responsible solicitor who trusted his brother.
The judge directed the society should be given further information about AIB’s indications that it was prepared to allow time to repay the sums owed to it. Extra information was also directed to be furnished concerning the firm’s financial position.
Cormac Ó Ceallaigh said the firm had been profitable for some 20 years, and he and his brother had received some €180,000 gross annually.
He and his family were determined to do all they could to repay the deficit, but could not do so unless he were permitted to continue to practise and was given time. His parents were willing to put their home up for sale or as security to fill the deficit.
His brother had taken “full moral responsibility for all wrongdoing”, Cormac added.
He was “completely devastated” by what had happened and by the shame brought on the firm.
Cormac had a property portfolio once valued at €10 million but now worth about €5 million, the court heard.
Patrick Leonard, for the society, said its attitude towards Cormac’s continuing to practise may be reviewed depending on the outcome of a full examination of the firm’s situation.
The case was returned for mention before the court in two weeks’ time.
