At Least Swindler Colton, must Face, some Justice? Pay his Creditors?

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‘Psychic swindler’ and wife have debts deals terminated over secret Spanish villa

Tom Colton (46) and his wife Linda secured debt write-offs of €2.7m and €2m respectively in February.

Tom Colton. Photo: Lorraine Teevan
Tom Colton. Photo: Lorraine Teeva

19th July 2022

The High Court has terminated personal insolvency arrangements (PIAs) writing off millions of euro in debt, following revelations a couple secretly owned a luxury Spanish property.

The decision came after an investigation by the Irish Independent revealed convicted thief Tom Colton (46) – better known as “the psychic swindler” – and his wife Linda (46) failed to disclose their ownership of a villa in Lanzarote when their arrangements were approved.

The husband and wife secured debt write-offs of €2.7m and €2m respectively in February.

However, following the High Court ruling, those write-offs no longer apply, and the couple have lost protection from creditors meaning they could potentially face bankruptcy.

Mr Justice Alexander Owens said there were “significant omissions” from their financial statements which misled their mortgage lender into agreeing to the PIAs.

He said the omissions “involved serious non-compliance by the debtors with duties of good faith and full and honest disclosure in the personal insolvency arrangement process”.

Explaining his decision to terminate the PIAs, the judge said: “The statutory system which gives debt relief is conditioned on honesty of debtors.

“Debtors must fully disclose their affairs and put their best foot forward to meet their commitments in accordance with their means.

“If courts do not uphold these standards, statutory provisions designed to safeguard creditors and public interest in a rigorous process which is subject to meaningful judicial oversight are set at nought.”

In April, the Irish Independent revealed the Coltons were the registered owners of a plush holiday home with a private swimming pool and hot tub in Playa Blanca.

The villa was bought in their names last September, just a fortnight before they both filed sworn prescribed financial statements of their assets and liabilities which made no mention of the property.

It was subsequently extensively renovated and is now said to be worth over €400,000.

  • Following the publication of the story, their personal insolvency practitioner (PIP), Eugene McDarby, filed papers seeking the termination of the PIAs on grounds of “material inaccuracy” in the financial statements provided by the couple and their failure to fully disclose all assets, income and liabilities to him.
  • It was the first time such an application has ever been made in the High Court and it was supported by their mortgage lender, Mars Capital Finance.
  • Mr and Mrs Colton, who run a business which provides celebrants for “spiritual” wedding ceremonies, denied they were the beneficial owners of the property, claiming they were acting as trustees for a company, Grá Agus Solas.

But the court heard this was the company through which they run their weddings business, that it was 100pc owned by Linda Colton, that her husband was a director between August 2016 and May 2018 and remained hands-on in the day-to-day running of the business.

Mr Colton, who claims to be a medium who can communicate with the dead, was previously jailed for stealing €320,000 from an elderly couple while working as their accountant.

The husband and wife, from Celbridge, Co Kildare, accepted they should have disclosed the property.

Through their lawyers, they pleaded with the court not to terminate the PIAs, urging the court to order their PIP to prepare a proposal to vary the arrangements.

In affidavits, the Coltons said they took “full responsibility” for the non-disclosure of the villa but claimed this was “caused solely by a misunderstanding” on their behalf.

However, Mr Justice Owens said he had concluded the applications for the termination of the PIAs were “appropriate and proportionate”.

The judge said that even if he made the benign assumption the trust was genuine, the couple were “seriously remiss in not advising their personal insolvency practitioner of these transactions”.

He said he would not order that proposals to vary the arrangements be drawn up because the non-disclosures were “so significant as to make it impossible to conclude that they deserve a second chance”.

Mr Justice Owens also said any variations would involve changes so significant that they would essentially be new arrangements. This would be contrary to policy set out in the Personal Insolvency Act, which says debtors can only enter a PIA once.

He also said that in affidavits filed with the court, the Coltons did “not show a clear path forward which could produce a result which is fair to creditors”.

  • During the hearing of the application last month, Keith Farry, counsel for Mr McDarby, said faith in the personal insolvency system was at stake.
  • Niall Ó hUiginn, counsel for Mars, said the fund had only voted in favour of the PIAs on the basis the information provided in them was true and accurate.
  • In an affidavit opened in court, Joe Carter, head of recoveries at Mars, said it beggared belief that the Coltons swore prescribed financial statements which left out a significant foreign property transaction which they had completed only two weeks earlier.

Mr Carter said the integrity of the personal insolvency system depended on the accuracy of information supplied by debtors.

  • Mars had agreed to restructure the couple’s €681,000 mortgage debt so they could save their family home.

Under the now terminated deals, around €40,000 of what they owed Mars was written off and the couple were given a new 22-year term to repay the remainder of what was owed, with an attractive tracker rate.

Tom Colton was jailed and restricted as a company director in 2015 after he admitted misappropriating funds an elderly couple had given to him to make a tax settlement with the Revenue Commissioners.

He continued to be listed as a director of Grá Agus Solas for a significant period after his conviction.

In correspondence exhibited in court, he claimed not to have known about his disqualification and said he resigned once he became aware.

The former accountant was dubbed “the psychic swindler” in news reports following his imprisonment.

Despite the conviction he remains registered with the Department of Social Protection as a solemniser of marriages.

Until recently he was a prominent administrator and referee with Leinster Rugby, taking charge of under-age and lower level adult games in Dublin.

However, Leinster Rugby Branch said in May he had stepped away from all refereeing duties until such time as his personal matters are concluded.

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