- July 15, 2015
- Posted by: Josiah Hincks Solicitors
- Category: Business Law Updates
Anyone can fall prey to a silver-tongued conman but independent advice can be the best protection. In one case, a fraudster ‘completely dazzled’ an apparently worldly-wise businessman and persuaded him to part with €100 million.
The conman and others promised that the businessman would double his money in a month. They told him that it was ‘an honour’ to invest in the bogus scheme and that secrecy was essential. After he succumbed to their blandishments and agreed to loan the money, it was diverted and he lost a very substantial sum.
Following High Court proceedings, the fraudster was ordered to pay more than €9 million in damages to the businessman’s company, through which he had made the loan. The Court, however, noted the gullibility of the businessman and two of his colleagues who had failed to make inquiries as to the conman’s bona fides. Even the slightest inquisitiveness would have exposed the fraud.
In challenging the damages award before the Court of Appeal, the fraudster argued that the three had exhibited ‘the grossest and most extreme possible negligence’ and that the compensation payable should at least have been reduced on that basis. A reasonable person would not have been taken in by the fraud.
Dismissing the conman’s appeal, however, the Court noted that he and others had gone to great lengths to acquire the trust of the three and to exploit their naivety. Having deliberately preyed on their gullibility, it was ‘really quite unattractive’ to argue that they should have exercised more scepticism and caution and that the company’s damages should be reduced for that reason.