This article was first published in the Irish Mail on Sunday newspaaper on 12/08/2012

By John Breslin

Developer Seán Dunne has been publicly  accused of hiding millions of euros of assets from NAMA.

The claim has been made in US court  documents, which claim he siphoned off the money through a series of countries  and companies to dodge paying his debts.

The one-time ‘Baron of Ballsbridge’, who  admits he owes almost €200m to Irish taxpayers, now faces a court hearing in  October in Connecticut over his alleged role in property deals that netted  millions of dollars.

Dunne is being sued in the American court by  a subsidiary of the National Asset Management Agency, which accuses him of  fraudulent activity for trying to hide the proceeds of the sale of an apartment  in Geneva, Switzerland and of two houses in the US.

The properties were first revealed in the  Irish Mail on Sunday, and the MoS articles are included in the 288-page  submission as exhibits of evidence, the only newspaper cited.

The court papers claim Dunne and Killilea are  living ‘lavish’ and ‘opulent’ lifestyles.

Essentially, Dunne is accused of banking  close to $9m, despite his agreeing earlier this year that he was personally  responsible for €185m in loans taken over by NAMA.

The lawsuit is aimed at stopping Dunne  getting any benefit from the proceeds of the sales of two homes in Connecticut  and one in Geneva. A third house in the US remains unsold.

It was filed just days after the completion  of the sale of 38 Bush Avenue in the exclusive Belle Haven enclave of Greenwich,  bought for $2m, controversially torn down and rebuilt at a cost of more than  $1m, then sold last month for $5.5m.

Five days later NAMA lodged their case asking  the court to prevent Dunne, his wife or agents from transferring any more money  or assets.

In total, Dunne is accused of making profits  or holding assets of some $9m that he has failed to reveal to  NAMA.

The documents reveal that he swore, on oath,  a statement of his assets – but NAMA claims he left out properties worth  millions.

The NAMA affidavit also reveals that the  agency only became aware of this alleged discrepancy when they read it in the  MoS.

Among the most significant claims made in the  court filings, the agency said: ‘Dunne and his wife, defendant Gayle Killilea  Dunne, have utilized a number of lawyers, purportedly acting as trustees, and  shell companies to hide assets from creditors, including the  Plaintiff’.

It goes on to claim: ‘Dunne’s conduct has  made it difficult if not impossible to trace the flow of Dunne’s assets and  reach those assets in satisfaction of the Judgment… given Dunne’s financial  sophistication and the Dunnes’ established record of using lawyers and LLCs to  hold their assets, ex parte relief is necessary to preserve the status quo and  prevent irreparable damage or loss to [Nama]’.

Referring to co-defendants in the suit – who  include several lawyers who have acted for the Dunnes – the documents state that ‘there is a reasonable likelihood that Dunne and/or Killilea, with the  assistance Heagney, Slane and/or Slane Lennon, are about to, and have already,  fraudulently disposed of property with intent to hinder, delay or defraud  Dunne’s creditors and/or that Defendants have fraudulently hidden or withheld  money, property or effects which should be liable to the satisfaction of his  debts.’

High circles: Seán Dunne and Gayle with then taoiseach  Bertie Ahern at Punchestown Races in 2008

The action taken in the Connecticut Superior  Court is ‘based on his failure to repay amounts demanded’.

The complaint reads: ‘NALM [National Asset  Loan Management] alleges that Dunne and wife, defendant Gayle Killilea Dunne,  have utilized a number of lawyers, purportedly acting as trustees, and shell  companies to hide assets from creditors.’

NAMA, through its subsidiary NALM, claims  Dunne set up four different companies in the US, but tried to hide his links to  them.

‘Plaintiff also brings suit against Killilea,  Mountbrook USA, Molly Blossom, Barclay and Wahl as suspected transferees of  Dunne’s assets.’ 

Dunne insists that he never had any interest  in the Geneva property, in Mountbrook USA or in any of the US properties he and  his wife have been connected to.

It is expected he or she will argue that they  are wholly unrelated to any debts that he owes and NAMA has no call on them, and  that therefore there was nothing wrong with any of the purchases or sales of the  properties.

NALM is based in Dublin and is part of NAMA,  and is being used by the state property behemoth to enforce court judgments made  against developers.

In court papers Seán Dunne is described as a  businessman, company director and an Irish citizen, ‘believed to be residing at  421 Field Point Road in Greenwich’.

Co-defendant Gayle Killilea Dunne is married  to Seán Dunne and is an Irish citizen.

‘Killilea previously worked as a columnist  for an Irish newspaper,’ the documents state.

This last part of the biography is important  as NAMA argues that it means she would not have the money or assets to pay for  the hugely expensive properties linked to her name, claiming that in fact they  were bought with her husband’s earnings.

The filings state: ‘Killilea has no  identifiable sources of income and never earned enough income to  purchase and  renovate or construct the Greenwich Connecticut properties, let alone purchase  the Geneva apartment for millions of Swiss Francs  … Nonetheless, they live an  opulent lifestyle in Greenwich.’

But the Dunnes are not the only  defendants;  also named in the court filings are several companies NAMA  claims Dunne and his  wife control: Mountbrook USA, Molly Blossom, Wahl  and Barclay, Beattie and  Brown.

The registered address for the companies,  except the last, is a solicitor’s firm in Greenwich called Heagney, Lennon &  Slane.

Two of the lawyers, Thomas Heagney and John  Slane, are also named as defendants, with claims they helped Dunne and his wife  in their various property transactions.

Apart from the properties, Nama also claims  the couple’s two cars, a $36,000 Lexus SUV and a $7,000 Jeep Cherokee are owned  by a company.

Nama had asked for a quick interim judgment  blocking the couple from making any financial moves because ‘the Dunnes possess  the motive, means and history of transferring assets beyond the reach of  plaintiff’s attempts to enforce the judgement’, NAMA asset recovery manager John  Coleman wrote in an affidavit.

However, it was not granted, and a full  hearing will take place in October, when the defendants will have an opportunity  to respond.

The court filings also claim that immediately  after Dunne filed his statement of financial affairs in late 2010 as requested  by Nama, documents filed with the Connecticut Secretary of State were changed.  These documents related to Mountbrook USA and Molly Blossom, two companies Nama  says are controlled by Dunne.  

‘The interim notices purported to modify the  LLCs original organisation documents by replacing Dunne with Killilea as member  of the LLCs and stated that Dunne was ‘listed in error’.”

Neither Dunne, his wife, nor any of the other  defendants, have filed replies to the complaint. Indeed, while Killilea has  hired a lawyer, her husband has not yet.

But in a letter contained in the court  documents, Dunne expresses his frustration with NAMA, complaining that the  agency’s review of his business plan, ultimately rejected, was being influenced  by press speculation.

In the February 2011 letter replying to  questions about, among other matters, the purchase and sale of the Geneva  apartment, Dunne wrote: ‘I am totally committed to working with NAMA and working  out my assets that are now under the control of NAMA but it is very debilitating  for me and my team to be left wondering from day to day what is happening.’

He argued that the purchase and sale of the  Geneva apartment does not come under Nama’s jurisdiction.

But Dunne added that his wife was the sole  owner of the property, bought for €3.8m and sold for €4.4m. His name was  initially included in documentation purely for residency requirements, he  claimed.

‘I did not contribute any equity or pay the  mortgage and Mrs Killilea insisted and I agreed that I be removed from the  property documentation.

‘As I never held any interest in the property  we considered the matter when formulating my statement of affairs and concluded  it was never an asset and no beneficial transfer occurred.’

Dunne also denied being involved with  Mountbrook USA, the company whose sole member is Gayle Killilea. He blamed New  York lawyer Philip Teplen for putting his name on documentation filed with the  Connecticut Secretary of State.

NAMA launched the action in the US to enforce  the €185m judgment made by the High Court in Dublin in March.

It has also asked for a temporary restraining  order freezing all the cash generated by the sale of the properties.

The State agency says it has not been able to  locate any of Dunne’s assets.

‘Although NALM has been unable to locate  assets owned by Dunne that are available to satisfy the judgment, Dunne and his  wife have continued to life a lavish lifestyle in Greenwich since relocating  from Dublin, Ireland,’ NAMA states in a filing asking for an immediate block on  any movement of cash by the couple.

‘They live in a Greenwich mansion that rents  for approximately $17,500 a month and drive several luxury  vehicles.’

Luxury: Gayle Killilea and Seán Dunne are alleged to be  living opulently in the US

One of those vehicles is a $36,000 Lexus SUV,  the other a Jeep Cherokee.

‘Dunne apparently has no assets or income  available to satisfy the judgment.

‘Moreover Killilea has no identifiable  sources of income and never earned enough income to renovate or construct the  Greenwich, Connecticut, properties let alone purchase the Geneva apartment for  millions of Swiss francs,’ wrote NAMA asset recovery manager John Coleman in an  affidavit.

‘Nonetheless they live an opulent life style  in Greenwich and have purchased, constructed and/or sold properties worth  millions of dollars.’

It is further claimed that a company linked  to Dunne, Mountbrook USA, paid real estate taxes on two of the properties, this  despite the property developer claiming it has no assets.

The action taken in the Connecticut Superior  Court is ‘based on his failure to repay amounts demanded’.

The complaint reads: ‘NALM alleges that Dunne  and wife, defendant Gayle Killilea Dunne, have utilized a number of lawyers,  purportedly acting as trustees, and shell companies to hide assets from  creditors.’

NAMA, through its subsidiary, claims Dunne  set up four different companies in the US, but tried to hide his links to  them.

‘Plaintiff also brings suit against Killilea,  Mountbrook USA, Molly Blossom, Barclay and Wahl as suspected transferees of  Dunne’s assets.’ 

NAMA secured a judgment in March against  Dunne for €185m, stemming from ‘defaults on numerous development loans that were  advanced during the last decade by various Irish banks to Dunne personally and  to Dunne’s companies’.

On the application of James Doherty, for the  agency, and on foot of a written consent  Mr Dunne provided through his lawyers, Mr Justice Peter Kelly entered summary  judgment in the amount of €185,299,627.

The judge also granted the agency liberty to  apply to enforce the judgment if necessary. Mr  Dunne was not in court for the brief hearing.

The nine separate loan facilities at issue  were made by Bank of Ireland, Irish Nationwide Building Society and Allied Irish  Banks on dates from 2005 onwards to Mr Dunne personally and to various  companies.

Residence: The mansion at Field Point Road,  Greenwich

Grand: The house at 38 Bush Avenue

Mr Dunne had provided guarantees related to  loans to various Mountbrook Companies, the Riverside 4 Development and DCD  Builders.

NAMA acquired the loans in July 2010 and  initiated the court proceedings after demands for repayment by July 2011 were  not met. Mr Doherty said the matter involved complex layers of security and  required careful analysis by the agency to ensure the figures were right before  it brought the proceedings.

Mr Doherty also said NAMA had made a number  of efforts to serve Mr Dunne personally with the proceedings before he was  ultimately served on December 22 last.

That service did not go as planned as Mr  Dunne was served with original documents and not copies – but Mr Dunne had later  returned the originals, he said.

Mr Justice Kelly said he was satisfied to  transfer the proceedings to the Commercial Court and to enter summary judgment  as sought. The court judgement, to which Dunne agreed, concluded discussions  that went back to November 2010, when NAMA first asked Dunne to submit a  business plan and give details of his financial assets.

NAMA also wanted details of his wife and  children’s financial affairs.

In December 2010, Dunne submitted a statement  of financial affairs in which he claimed to have made no transfer of assets  other than five minor ones.

He did not mention any property transactions  in the US or Switzerland, it is claimed.

‘Despite the declaration under oath attesting  to their completeness, these representations omitted details of the Switzerland  transfer and property purchases’, the documents in the US proceedings  allege.

Details of four property transactions, in  Switzerland and the US, are contained in the US papers.

The apartment in Geneva was bought for 4.6m  Swiss Francs (€3.8m) in July 2008.

In February 2010, Dunne transferred his half  interest in the apartment to his wife. A month later, Gayle Killilea signed a  contract to sell the apartment for 5.3m Swiss Francs (€4.4m). This was publicly  revealed by the MoS and the article is attached to the complaint.

The article led directly to NAMA asking Dunne  about the property.

‘Dunne failed to disclose the transfer of his  interest in the Geneva apartment on the financial statement, documents claim. ‘When confronted by Nama with this omission Dunne claimed that his name “appeared on the contract to guarantee residency in Switzerland”.’

In a letter to NAMA on Mountbrook Ltd headed  notepaper – included as evidence in the Connecticut filings – Dunne denied any ‘beneficial transfer occurred’.

‘In relation to a property in Geneva for  historic purposes I wish to advise you… the purchase was completed in August  2008 for a sum of circa CHF4.6m and a mortgage facility of CHF3.5m was raised to  finance the purchase. My name appeared on the contract in order to guarantee  residency in Switzerland.

‘I did not contribute any equity or pay the  mortgage on the property and Mrs Killilea Dunne insisted and I agreed that I be  removed from the property documentation effective 23/2/2009 as by then I had  obtained residency.

‘I never held an equitable interest in the  property as my interest was for the sole purpose of obtaining residency.

‘As I never held an interest in the property  we considered the matter when formulating my statement of affairs and concluded  it was never an asset and that no beneficial transfer occurred… I do not believe  any profit was made on the disposal of the property when property taxes,  mortgage repayments and all other related expenses including fitting out costs  were taken into consideration. Please note I had no involvement in the sale of  the property.’

Sold: The house at 42 Bote Road in Greenwich,  Connecticut

Swiss roll: The property in Geneva

In April 2010, the court documents claim  Dunne and Killilea bought 38 Bush Avenue for $2m. They have always denied  ownership.

It was bought under the name of Phillip  Teplen, a New York immigration lawyer who would later be sued by Killilea over  claims he took $500,000 she gave him to hold in escrow to use for property  development in the US.

Details of that action, which she won – although it is still unclear how much money she managed to get back – are also  included in the complaint. Again, Nama believes that money ultimately came from  Dunne.

To add to its argument Nama is making  extensive use of articles published in the MoS, in particular one from December  2010.

That article, written by Michael O’Farrell  and Valerie Hanley and based on reporting by New York correspondent Annette  Witheridge, linked Dunne to 38 Bush Avenue.

The owners poured more than $1m into tearing  down the house and rebuilding it, much to the annoyance of some of the monied  neighbours in the gated community of Belle Haven.

That house was sold last month for $5.5m,  grossing a handsome profit for its owners.

The seller is one Thomas Heagney, but NAMA  believes Dunne ultimately will profit from the sale.

Agents Sothebys International were told by  the sellers not to disclose even the address in sales pitches for the property  in an apparent bid to keep details of the sale under wraps.

The MoS article also revealed Dunne and  Killilea were renting a house in Greenwhich for $17,000 a month. Court documents  confirm they are still living at that house on Field Point Road.

The court documents also refer to a second  MoS piece, from early 2001, detailing the purchase and sale of the apartment in  Geneva, Switzerland.

In addition to the property transfers, the  filings also allege that  Dunne had an interest in Mountbrook USA and Molly  Blossom, stating: ‘Dunne transferred his membership interest in Mountbrook  USA  and Molly Blossom to Killilea for no consideration through the ruse of  an attempted retroactive modification to the Articles of Incorporation of the  entities.’

Dunne had informed NAMA in a letter: ‘In  relation to Mountbrook USA.  I am not a shareholder of Mountbrook USA and  the sole member of same is Mrs Gayle Killilea Dunne.

‘The lawyer who set up the entity Mr Philip  Teplen of Teplen & Associates…incorrectly registered the company naming me  as principal, however he did so without any instructions written or oral from me  and contrary to the instructions I understand he received from Mrs Gayle  Killilea Dunne.

‘I do not believe that Mountbrook USA has any  property assets.’

However NAMA cite US tax records to show that  Mountbrook USA apparently paid real estate property taxes in 2010 of over  $20,000.