Seven Sentenced Over £1.5m Mortgage Fraud Scam

Seven people have been sentenced after admitting involvement in a £1.5m case of mortgage fraud in the north west of Northern Ireland.

Detectives from PSNI Organised Crime Branch welcomed the sentences, which were imposed last June but can only be reported upon now, following the completion of other proceedings.

52-year-old Businessman John Gaile set up a scheme with members of his family and Coleraine solicitor John Hickey, 56, that involved applying for mortgages using inflated purchase prices for business and residential properties, mostly in the Coleraine area. The majority of mortgages had been obtained using the services of Holywood independent financial advisor William Larmour, 63, police said.

The scheme meant that banks and building societies offered greater loans than would otherwise have been available.

In a period from September 1995 until April 2008, Mr Gaile sold the properties and either took the profits or used them to fund the purchase of other properties, whose mortgages were similarly obtained.

Financial investigators in Organised Crime Branch calculated the total value of the mortgages to be in excess of £1.5m. Police said the total profit to all seven defendants 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 18 June 2014 at Laganside Court for the scam, which involved a total of 26 property transactions.

They pleaded guilty, along with Paul Gaile (50), Lena Gaile (49) Lee Paul Gaile (29) and Kieran Gaile (30), to a total of 76 charges including mortgage fraud and acquiring criminal property.

John Gaile was given two years’ jail, suspended for three years, for 19 counts involving obtaining services by deception, acquiring and converting criminal property.

John Hickey received two years’ jail, suspended for three years, for 51 counts involving obtaining services by deception, fraud by false representation and money laundering.

William Larmour received only a conditional discharge for failing to disclose money laundering.

Paul Gaile, John Gaile's brother, was sentenced to one year in jail, suspended for three years, for two counts of money laundering, while Lena Gaile, John Gaile's wife, was handed six months in prison, suspended for two years, for two counts of money laundering.

Lee Paul Gaile, son of Paul and Lena Gaile, was given six months in prison, suspended for two years, for three counts of money laundering.

Kieran Gaile, John Gaile's son, received 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.

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. As a result, restrictions on reporting on the case were lifted.

(IT/MH)