Suspended Halifax franchise owner granted bail by High Court in N Ireland

The following article is reproduced, in its entirety, from the BBC website

An unnamed firm of Newry solicitors is under investigation in connection with an alleged £7m fraud operation, the High Court has heard.

It was revealed police have established 116 “high risk lending transactions” linked to a former bank manager accused of being at the centre of the scam.

False identities were allegedly set up to make loan and mortgage applications.

Details emerged as bail was granted to financial adviser Damien Mallon, 52, of Drumconwell Road, Armagh. Mr Mallon, who ran Halifax franchises in Dungannon, County Tyrone, and Keady, County Armagh, was said to have made admissions about his role.

He is accused of two counts of fraud by abuse of position, six charges of converting criminal property, two counts of entering into an arrangement to acquire criminal property, and conspiracy to defraud on dates between 2002 and 2009.

He was arrested along with Peter Creegan, a former branch manager of the First Trust in Newry, after police received complaints from the bank and a third party.

Suspended

Mr Creegan, 43, from Tullydonnell Road, Silverbridge, County Armagh, remains in custody charged with multiple fraud and money laundering offences.

During Mr Mallon’s application for bail, a Crown lawyer claimed the operation involved authorising financial loans to people and businesses, sometimes with false names.

“At this stage police inquiries reveal there are some 116 high risk lending transactions authorised or associated with Mr Creegan. Of these six of them expose the bank to an estimated amount of £3.4m sterling and 3.9m euros,” she said.

The court heard that Mr Mallon, who has been suspended by the Financial Services Authority, admitted participation by making false applications, with one sum of £300,000 involved.

Although much of the multi-million pound fraud has been traced back to property, a considerable amount remains unaccounted for, it was claimed.

Defence counsel said Mr Mallon made confessions during 18 police interviews over the last week, but stressed his involvement with Mr Creegan was limited.

He told the court his client received a 2.5% cut on the £300,000, obtained from the First Trust Bank.

The barrister’s submissions that Mallon was only a “small fish” in the alleged scam were accepted by the prosecution.

Only five or six of 4,500 Halifax accounts he has opened in the last number of years are under investigation, the court heard.

Defence counsel also disclosed: “A prominent firm of solicitors in the Newry area appears to be the subject of a number of lines of questioning in this matter and appears to be on the police radar in relation to this matter.”

No names were given, but he added: “Mr Mallon would instruct he has never had any involvement with this firm of solicitors. Police investigations are focusing very much on transactions that were passed through this firm of solicitors.”

Mr Mallon’s wife Jennifer and some of their five children were in court as Mr Daly spoke of the huge consequences of his arrest on them and his business.

“He has been suspended by the FSA, he has been suspended by the Halifax and he can have no dealing with customers,” the barrister said.

Granting bail, judge Mr Justice Weatherup said Mallon appeared to be on the periphery of the main players.

Mallon was ordered to put up £5,000, lodge a £15,000 cash surety and surrender his passport before he can be released.

He was also curfewed, directed to have no contact with Mr Creegan and banned from operating any bank accounts other than in the family name.