A group of UK and Irish investors who lost money in a Portuguese property scheme which never built anything, has accused the Irish government of conspiring with the fraudsters, a claim vigorously denied by Irish government agencies.
The Little River Victims (LRV) group, who lost $3m investing in a US-based property development through Portuguese property scheme Oceânico, alleges that the Irish government, through its National Asset Management Agency (NAMA), is now the owner of the failed scheme and is stopping it from paying back investors.
The investors have written to their MPs asking them to raise their grievances as a "significant diplomatic issue" in the House of Commons and intervene with Irish government ministers to convince them to force a pay out.
LRV lost their investments after it transpired that the properties at the Little River golf resort, which the group invested in between 2008 and 2011, were never built.
The scheme has not yet refunded any of the capital to the investors despite a Portuguese court ordering it to, LRV claimed.
It is understood that all sales to the LRV group were made through their financial advisers, with at least three advisers known to have been involved so far.
The group alleges that a "fraud" was being "actively perpetuated" by the Irish government and NAMA, which became the sole secured creditor of Oceânico in 2010 after the collapse of the Anglo-Irish Bank.
LRV spokesman Gerry Purdy said Oceânico claimed it had wanted to settle the claims but could not do so without the permission of the Irish government.
NAMA was set up by the Irish Government in 2009 to acquire loans linked to land and development from a number of ailing banks.
Purdy said: "Sources in Portugal and the US believe that the Irish government effectively own Oceânico and Michael Noonan, the Irish Finance Minister, failed to deny this when the LRV asked him for clarification.
"We have made Noonan and the Irish government aware of the Portuguese court ruling which clearly defines the self-evident criminal illegality regarding the withholding of our monies.
"It is clear that Noonan and the Irish government [...] cannot lawfully prevent the restitution of our monies that now lie within Oceânico. Incredibly they seek to do exactly this to the benefit of the Irish State.
"Oceânico and the Irish government, have, in our view, conspired together to manufacture a perverse and heinous 'Catch 22' scenario whereby they ascribe culpability to each other in this alleged fraud enabling them both to simultaneously abrogate their moral, humanitarian and legal obligations to us."
NAMA denied it had any say in whether Oceânico returned any of the capital to the investors.
The agency confirmed it was a "secured lender" of the group but said it did not own or control Oceânico.
A spokesperson for the agency said: "NAMA has no responsibility whatsoever in respect of this matter. NAMA is not a party to - nor has it had any involvement in - any arrangement that this group of investors may have entered into with the Oceânico group of companies.
"[NAMA] has absolutely no responsibility for discharging any liability of the group to any third party, including any liability that may be owed by the group to the group calling itself the 'Little River Victims'. Any claim to the contrary is without foundation.
"[Our] relationship with [Oceânico] is similar to any bank that has loaned money to a commercial organisation and holds security for those loans."
It added that it had repeatedly rejected the group's allegations and was taking the issue "very seriously".
"Any investments held by NAMA are the responsibility of NAMA. The Minister of Finance does not have a direct involvement in the daily operation of NAMA."
Meanwhile, LRV has also started proceedings against Oceânico for breach of contract, after it refused to make payouts or hand back the investments following their expiry.
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