A couple who had written off millions of euros in a personal bankruptcy failed to reveal they were the registered owners of a luxury foreign property when their debt deals were approved by the High Court.
Spanish land register entries name middle-aged and convicted thief Tom Colton, 46 – better known as “the psychic” – and his wife Linda, 45, as the owners of a plush villa in Lanzarote, a federal court investigation has found Irish Independent has found.
The five bed property with private pool and jacuzzi in Playa Blanca was purchased on September 1st last year, a fortnight before they both swore to mandatory financial statements detailing their assets and liabilities.
But those statements made no reference to the villa they just bought.
The husband and wife of Celbridge, Co. Kildare, who run a business offering “spiritual” wedding ceremonies, had debts of €2.7 million and €2 million respectively written off by the court last February.
Known as Villa Penguina, the property has been extensively renovated after purchase and is currently rented out to holidaymakers for up to €2,400 per week.
If it turns out details of ownership should have been declared, there could be serious consequences for the Coltons, including losing their personal bankruptcy arrangements.
According to the Private Insolvency Act, debtors are obliged to disclose to their private insolvency administrator all assets, income and liabilities as well as all other circumstances that are likely to affect their ability to pay to creditors.
Failure to make full and open disclosure is considered a serious matter. But Colton, a former accountant who served time in jail for stealing over £300,000 from an elderly couple, has insisted he and his wife did not mislead their practitioner or the court.
Contacted by the Irish Independenthe claimed they were not the beneficial owners of the property and were acting as trustees for a beneficiary.
However, the existence of a trust deed, as claimed by Colton, is not reflected in land registry records.
Colton refused to name the beneficiary, for which he claimed he and his wife would act as trustees. He also refused to provide a copy of the trust deed, but insisted he was telling the truth.
The holiday home was probably bought for around 290,000 euros but would now be worth between 400,000 and 420,000 euros after renovation work.
Land register documents identify Tom and Linda Colton as 50/50 co-owners and state that it was purchased on a €178,500 mortgage from a Spanish bank.
“We don’t own the asset, so they’re not included in our statements and shouldn’t be,” Colton said.
“We have provided our bank statements, our income information and tax returns and any other information that has been required and requested to complete the declaration with all our personal assets and liabilities as we should do.
“The beneficiary owns the asset and is entitled to all income, is responsible for all expenses and has full rights to the property and directs all matters relating to the property. We didn’t pay for the property, we didn’t pay for the equipment, the beneficiary did.”
After the issue was addressed by the Irish IndependentEugene McDarby, the Coltons’ personal liquidator, said it was the first time he had been made aware of the property and would investigate immediately.
“Depending on the outcome of this investigation, I will take such further or other steps as I deem appropriate, including notifying all creditors, the court and/or the Irish Insolvency Service, as recommended by my legal team,” Mr McDarby said.
“The bankruptcy process operates on the basis of full and open disclosure of borrowers and on the basis of mandatory financial statements, sworn by affidavit by each debtor and submitted to the court in each case.
“All financial information must be fully and truthfully disclosed in the required financial statements.”
Colton, a former accountant, claims to be a medium able to communicate with the dead. He was jailed in 2015 for admitting to stealing €322,070 from Co Monaghan couple Hugh and Mary McNally while he was acting as an accountant in 2005.
He was ordered to make a payment to the Revenue Commissioners on their behalf, but instead diverted funds to a company in the United States.
Colton was dubbed “the psychic imposter” in news reports after his incarceration.
Despite the conviction, he remains registered with the Department for Social Protection as a Spiritualist Union of Ireland spouse.
He was also able to maintain his position as a prominent referee at Leinster Rugby, refereing adult and minors games in Greater Dublin.
Colton previously ran a limousine business and was involved in a failed $600 million real estate development on the Caribbean island of St. Lucia in the mid-2000s.
The personal bankruptcy settlement he and his wife entered into in February allowed them to keep their family home. The arrangements reduced a €695,000 debt secured with her home to its market value of €640,000, with the mortgage restructured and extended to 22 years.
In its statutory financial statements, Colton stated an interest in properties in Dublin and Obidos in Portugal, both of which are to be sold for the benefit of creditors as part of its debt deal.
Before the agreements were approved, Colton was owed a total of €4.3 million and his wife owed creditors €3.1 million.
Several debts were common to both of them, including loans from relatives.
The High Court heard creditors would receive a reduced return if the couple went bankrupt.
https://www.independent.ie/irish-news/investigation-the-psychic-swindler-the-million-euro-debt-deal-and-a-secret-luxury-villa-41579314.html Investigations: The “psychic”, the million dollar debt deal and a secret luxury villa