He is accused of duping clients such as Foster and Allen out of millions. Now he’s offering advice to indebted businesspeople. Is Patrick Russell back to his old tricks
In 2013 Ian McLaughlin, a livestock dealer from Moate, Co Westmeath, was facing a six-figure debt to AIB when an English buyer failed to pay him for sheep stock. With the bank making demands and McLaughlin suffering cash-flow problems, he confided in long-time friend, Felix O’Mahoney, a farmer from Co Tipperary. O’Mahoney encouraged his friend to engage a specialist negotiator to act on his behalf with the bank. He introduced him to Pat Russell, a former barrister, who was offering expert services to the indebted.
“ [Russell] said he had a man inside the AIB,” recalls McLaughlin. “He’d have to give him a few pound. I’d pay Russell and this man would get it sorted. He’d give him two grand. So I gave Russell €10,000.”
After receiving payments totalling €10,000 for “bank settlement” fees, Russell then proposed that McLaughlin get fresh finance from a UK-based firm called P2P Finance Ltd.
“He knew I was tight on money at the time and he said he could get finance for me,” said McLaughlin. “He said it would be 5% on €400,000 over 10 years. I said I’d go for it and Russell said the fee would be €6,000. He said the fee would be refundable if the loan didn’t come. I paid the money but then the story from him was that it was coming every day but it never came.”
In total McLaughlin believes he paid Russell almost €20,000 for bank negotiation services and arrangement fees for a new loan. However, neither the bank settlement nor the new loan ever materialised.
McLaughlin said it was only after he paid money to Russell that he was warned about the former barrister’s colourful past.
Disbarred by the King’s Inn in 2012 for “fundamentally dishonest behaviour”, Russell relocated for a time to Manchester after a series of high-profile cases left his reputation in tatters. Three judgments registered against him between 2009 and 2012, including one from Revenue, shows he owed €504,000.
Russell has strong Republican links and was a prosecution witness in the Catherine Nevin murder case. In the 1990s he was a business associate of Albert Reynolds, the former taoiseach, and Tom McFeely, the former IRA hunger striker-turned-developer.
A decade ago Foster and Allen, the traditional musicians, were among a number of sports and entertainment stars to accuse Russell of fraud for allegedly concocting letters from Revenue to say their tax affairs were in order when in reality they faced multimillion euro bills. The duo were subsequently fined €6m by Revenue for unpaid taxes. Other clients who accused him of alleged wrongdoing were Declan Nerney, the country musician, and Damien McGrane, the golfer.
In 2007 Judge Peter Kelly, now the President of the High Court, said there was little doubt that Russell had perpetrated fraud in acting as a tax consultant for a refrigeration company. Despite referring the barrister to the garda fraud squad, Russell has continued to work as a financial adviser.
The Sunday Times can now reveal how Russell’s latest ventures have left eight businessmen who paid him €200,000 with nothing to show for their money.
In October 2011, Felix O’Mahoney was introduced to Russell after he got into difficulty on investment loans secured on his farm with a private finance firm. “I was told Russell could raise the finance. That was the magic bullet for me because I couldn’t raise finance,” said O’Mahoney.
Russell paid O’Mahoney to introduce him to other businessmen who needed debt negotiation services. The farmer said he was totally convinced by Russell, so he was happy to drive him to meet other potential clients.
“I made the introductions in good faith but it f***ing sickens me now,” said O’Mahoney.
O’Mahoney believed his debt problem would be resolved with a loan from P2P Finance Ltd. “I was told there was a hitch here and there, but that the money was coming in,” he said.
The farmer said he “blew a fuse” when he saw a notice in a newspaper earlier this year that a receiver was being appointed over part of his farm. “I knew then this was a sham and I haven’t spoken to Russell since,” said O’Mahoney. The farmer is now trying to put victims of Russell in touch with each other. Together they plan to make a complaint to the garda fraud squad.
THE common thread among Russell’s customers was their desperate financial straits.
Among those who engaged Russell is a 74-year-old farmer who paid over €30,000 on the understanding that the former barrister could negotiate his €1.2m bank debt down to €200,000. Last week the farmer said Russell recently approached him for another €3,000 saying this could help get the deal over the line.
“The deal never materialises despite him always saying it will be next week,” said the farmer.
In 2013 the man introduced Russell to another farmer who had debts of €2.4m.Russell told him he could get his debt cut to €450,000 but it would cost €30,000. “Banks were doing deals of 20% at the time, so I thought it was credible and I paid him,” said the farmer. He has yet to get a deal.
Another farmer said he paid Russell €24,000 on the understanding he would negotiate a settlement with his bank to write €4.6m off a €5.1m loan. The deal never materialised.
A rural builder said he and a relative paid Russell €12,000 to negotiate on their €540,000 bank debt. “We got excited that he could deliver for us,” he said. “But now we’re two years down the road and there’s no deal done. To be honest, we’re in such dire straits we still have a forlorn hope he might come through for us.”
Another farmer, who only wanted to be identified as G Kennedy from Tipperary, said he paid Russell €8,000 to negotiate a €200,000 tax bill from Revenue. “I was always sceptical of it and in the end he did nothing for me other than tell me the office where I could get my tax clearance certs,” said Kennedy.
Another businessman said he had paid €22,500 to Russell in eight payments between 2014 and 2015 after Russell told him he could reduce his Ulster Bank debt from €750,000 to just over €250,000.
All the men were offered new finance by Russell in the form of “peer-to-peer” lending, also known as “crowdlending”. The practice has developed in the UK in recent years. It matches lenders with borrowers through a specialist website.
The paperwork given by Russell to farmers and rural businessmen, however, contains numerous inconsistencies and apparent misrepresentations.
The lending company’s name is listed as “P2P Finance Ltd” with an address at 130 Congleton Road, Sandbach in Chesire, England. This is the same address used by Crest Legal Consultants, the company Russell used to bill for his consultancy services. There is a P2P Finance Ltd registered in England but it is based in London and offers business advice, not loans. Mike Sleeman, P2P Finance Ltd’s owner, believes Russell has wrongly used his company’s name.
A “P2P Finance Ltd” loan offer issued to a Tipperary businessman in 2013 claims the company is both “registered in Ireland” and “incorporated in England and Wales”. Buried in the paperwork is a paragraph that sets out P2P’s purported registered company number, address, Information Commissioner registration number, consumer credit licence number and website. However each of these details are actually those of another firm, Funding Circle, one of the UK’s largest peer-to-peer lending companies.
Funding Circle said it had never worked with Pat Russell or a company called P2P Finance Ltd and it would be referring this matter to its lawyers.
A business source said Russell had approached Christopher Seddon, MBE, head of the large Seddon construction firm based in the north west of England, about developing a peer-to-peer lending business in Ireland. Seddon was to be a backer of P2P Money Markets, a company incorporated in Dublin in 2012. Seddon, however, died last year and the Irish company was dissolved last April.
The Seddons declined to comment.
LAWRENCE CARBERRY, a director of P2P Money Markets, said the company had never traded. He said while he had met Russell previously the former barrister had no involvement with P2P Money Markets. He said he wanted nothing to do with Russell.
Not all the businessmen and farmers were taken in by Russell in the same way. In October 2012, a garage owner agreed to provide Russell with a bridging loan of some €50,000 by lodging the money to a Limerick firm of solicitors nominated by Russell.
The garage owner received a letter from Martin Guyll-Wiggins, of Great Western Solicitors in Swindon, saying Russell would give an undertaking to return the money plus a 60% return within 28 days. He duly transferred two lots of €25,000.
The man said he had always trusted lawyers and solicitors. “I took Pat Russell at face value,” said the garage owner. “He then tried to get me to take a loan from P2P but I refused because I’d already given him everything I had.”
In 2014 the man was sent three cheques worth €42,400, by Russell’s UK firm, Crest Legal Consulting, signed by Renata Bauman, the company’s only director. All three bounced.
The man, who does not want to be named because he has not told his family about giving the money to Russell, said the former barrister claimed the cheques bounced “because the signatures were wrong”.
The garage owner said: “I know I’m flogging a dead horse but I’m hoping against hope he’ll repay me. I’m embarrassed. We can pay our way but I have to work seven days a week. I have special needs children and that’s who that money was for.”
Great Western Solicitors was liquidated in September 2014. Guyll-Wiggins, its director, said Russell was his client but he was never paid by him. He said he never took any funds from Russell’s Irish clients. He said he and Russell had “butted heads” and he wished he had never worked with him. While he said he had authored the letter to the garage owner in 2012 he had never consented to act for “P2P Finance Ltd”. He was not aware his firm’s details were included in paperwork sent to prospective borrowers.
“I was employed by Russell’s Crest Legal Consultants to provide due diligence on funds supplied by a lender and ensure the funds went to borrowers,” said Guyll-Wiggins. “The funds never arrived. The only money that did arrive failed the diligence test and had to be returned.”
Crest Legal Consultants was dissolved last November.
Last week Russell said he had engaged Kieran Conway, a former IRA man, as his solicitor.
“I at all times used my best offices on behalf of clients save where I was hospitalised three times since Christmas,” he said. “When Crest was dissolved I continue[d] working in a personal capacity. The financial figures you quote are wildly exaggerated.”
He said he was continuing to work with most of the men who had spoken to the Sunday Times.
“I have an acrimonious dispute with Mr McLoughlin as you know,” he said. “I have had a personal disagreement with Mr O’Mahoney. I have not received any correspondence from any of the above, legal letter or proceedings setting out any of the allegations you make. I deny the allegations you make in total.”
The former barrister denied saying he had an “inside man” in AIB. He said he had contacts in several banks including AIB.
McLaughlin, the Westmeath livestock dealer, has little hope of recovering his money from Russell but has employed debt collectors to pursue the former barrister. They have visited him at his home in Rathcoole in south Dublin.
“I’d be owed money for stock and sometimes the money collectors can collect for you but they’re getting nowhere with Russell. I have them on him just to annoy him as much as anything,” said McLaughlin.