Dolphin Trust Pyramid Scheme

Over 1,800 Irish investors, many of whom had very little financial expertise or experience, specifically requested to have their pensions & savings invested in low & medium-risk funds, and are believed to have contributed over 107 million to the unregulated fund. Despite considerable problems with the business model in recent years, Irish investors were assured by brokers that they would have the ‘first charge’ on a catalogue of German properties.

Unfortunately, this is not the case in low & medium-risk funds, which are believed to have contributed over 107 million to the unregulated fund. Despite considerable problems with the business model in recent years, Irish investors were assured by brokers that they would have the ‘first charge’ on a catalogue of German properties. Unfortunately, this is not the case.

Mr. Hozle’s opinion is that the entire company has been insolvent for several years and that monies committed by investors may not have reached their intended destination. A preliminary forensic expert report has outlined that funds in excess of €10 million were transferred to companies that have links to both the wife and son of Mr. Charles Smethurst.

There is further investigation into a group of 200 interlinked companies in Germany, the Cayman Island, Seychelles, Guernsey, the US, Singapore, Hong Kong, Turkey and Malta, many of which have further links to Smethurst’s family and associates.

Alarmingly, it is also reported that brokers who were responsible for recommending the funds to inexperienced Irish investors, were in receipt of a commission of up to 20% on investments made.

Dolphin Trust was recommended to Irish investors despite the fact that annual accounts had not been published since 2015. Mr. Hozle has stated that complex forensic work will be required to trace the funds committed due to the fact that there is no verifiable database of what funds may have been secured on what properties.

The above makes for difficult reading from Irish investors whose monies have effectively been committed to an unsecured ‘pyramid fund’ compounded by the fact that they had not received any relevant updates from their brokers in relation to the same.

Brokers have an obligation to ‘know their client’ and to familiarise their clients with the uncertainties of investing in ‘unregulated funds’. However, this does not seem to be the case as many of the investors that have been in touch with Coleman Legal to date, have confirmed that they were advised that the investment was 100% secured and were not aware that Dolphin Trust was unregulated.

The current uncertainty surrounding the invested funds is devastating for Irish investors who feel they were misled and certainly misdirected towards Dolphin Trust.