Wednesday 18 January 2012

Ciaran Maguire Group Disassociates Itself from PCI

Ciaran Maguire Group Disassociates Itself from PCI

Ciaran Maguire claims to have sent this email to us back in October when we first queried him about the company's connection with PCI (see previous stories), but we certainly didn't receive it then, nor did we receive it after a further email to the company in November. In fact we received no response of any description from him. We remain sceptical that it was sent, but will have to take his word for it. 

It is particularly strange that the email says that "Ciaran Maguire Group are very much looking forward to delivering the first sets of keys in the second quarter of 2012 to our Palm View clients." when at that time on his Blog the PV Construction Schedule (which was still there at time of writing this post) states that completion would be in mid-December 2011, there's never been an update to this on the site - at least not yet. In fact there haven't been any updates at all since last September. Also, a sales agent for the Boa Vista Palm View Resort development claimed to have sold €5m of Palm View apartments at the Property and Investor Show in the UK in early November, stating on November 10th in its blog that the development was set for 'completion in December of this year'. This seems totally at odds with what Ciaran claims he sent us in an email early in October. Surely he would have informed all agents selling Palm View of such a large change in completion date. He would certainly have been far more likely to tell them than he would be to tell us. 

The moving of this completion in Cape Verde to May 2012, while deposits are being collected for a new project in Fond Bay, St. Lucia, and while previous clients in Cape Verde who have asked for their deposits back remain unpaid, may draw criticism in some sectors. 

In order to offer balance here is the email from Ciaran Maguire (which he claims was sent last October) exactly as it was received by us today, January 18th 2012.

"In response to your email, I can confirm that Ciaran Maguire Group had terminated all agreements with Provident Capital Indemnity over 14 months ago. We originally entered into an agreement with Provident Capital Indemnity over 2 years ago however when we realized the seriousness of the allegations against Provident capital Indemnity we quickly moved to dissolve all agreements. It has to be noted that PCI was introduced to Ciaran Maguire Group by the most reputable broker in the market, the London based broker have also ceased relations with PCI.                       

At the start of 2011 the Company set up conferences in London and Manchester and met with all of the Palm View clients to give them an exact status report as it is Ciaran Maguire Groups main objective to protect the interest of our clients. At the meetings, Palm View clients were made aware of the new 100% finance option in place of the PCI bond and also the news that we had taken over of a previous scheme in Boa Vista, this scheme has been re designed and re branded to the Palm View Resort. The takeover has proven to be very successful. We are on target to complete phase 1, (block A and F and the Palm View Hotel) in the second quarter of 2012. All of our Palm View clients have signed up to the new scheme as well as a considerable amount of new sales with phase 1 being sold out and is currently 85% built. There is no doubting that the Palm View project endured frustrating delays as indeed all developments were affected during the difficult global recession but Ciaran Maguire Group are very much looking forward to delivering the first sets of keys in the second quarter of 2012 to our Palm View clients.

As previously mentioned, I would be happy to make myself available to meet with you and furnish you with all relevant documentation such as Palm View land title, Palm View building permits, details on the 100% finance and indeed funding in place for Palm View Cape Verde and further projects, it would certainly clear up any queries you may have on Palm View. I leave for the UAE on Thursday the 20th and then on to Cape Verde till the 7th of November but am available prior to my departure and indeed on my return."  


Ciarán Maguire
Chairman & President

CastleBaggot House,
Dublin 22.

Ph: +353 1 6251542
Ph: +353 1 6251544

Reply from Ciaran Maguire relating to PCI

Reply from Ciaran Maguire relating to PCI

When reading Ciaran's reply to our recent post you should bear in mind that he actually ignored our email on the subject some months ago completely, as well as a second one a month later, which was the reason we published the post in the first place. It now seems that he is, once again, anxious to engage in communication, but as usual, only on his own terms.

Ciaran claims that the Boa Vista development is due to complete in May 2012, to the best of our knowledge this is the fourth such completion date so far - all previous ones have obviously been missed. We would hope, in fact for all investors involved we would pray, that the same will not happen with this one. 

We have acceded to his request to remove the picture of the brochure for new development the company is launching in Fond Bay, St. Lucia. 


Email is reproduced exactly as received. 

"You sent me an email a couple of months ago asking about PCI. I told you the exact situation and that my Company had terminated all interests with PCI and took the time to go into the exact details and yet you did not mention any of that on your recent post, you use an old quote and have married it to our new Palm View development in St Lucia. You have always claimed that you give an honest assessment but to me that’s low and a complete misrepresentation of the facts, you know we have nothing to do with PCI and yet you convey a different picture.

A balanced version would show my recent reply to you regarding PCI. For some reason the expansion of my Company really bothers you. You questioned if my company would deliver Palm View, Cape Verde and we are set for completion in May with the project sold out. (all of this done in the worst economic climate on file) The loan syndicates we work with have deemed CMG to be one of the fastest growing real estate development companies in the sector today and subsequently we have the credit facility in place to commence construction on the new Palm View Golf Resort, St Lucia and the Palm View Spa Resort in the Grenadines.

I honestly don’t know what I ever did to cause the personal vendetta you have for me, but I take great pride in the fact that we now employ 22 people in Ireland and hundreds of people in construction overseas and will endeavour to create more opportunities for employment in times when this country needs them more than ever. I would ask that you give an honest reflection on the story; you have always posted my responses but not this one, strange.

On a final note I would like to bring to your attention an interpretation of Ireland in which it suggest of Ireland that "begrudgery is a national sport" and "The Irish are fatalist and pessimistic to the core"

It is sad to say that people are more interested in writing a negative story anyway who knows maybe one day I will be surprised by the media in this country, who have brain washed people into thinking that the glass is always half empty.

Will you please take down the picture of the launch of our new development while running a piece on PCI as they are not linked in any way and they never were and you are suggesting it is. It really is unfair and unethical, if you could do that I would very much appreciate it.

In the meantime, best of luck with everything.


Ciarán Maguire
Chairman & President
CastleBaggot House,
Dublin 22.

Ph: +353 1 6251542
Ph: +353 1 6251544

Sunday 15 January 2012

The Ciaran Maguire Group & PCI Underwriters

There are updates to this post in consequent postings, please read them all to get context for this posting. Basically Ciaran claims he has had nothing to do with this company for some time. We wrote to him some time ago about PCI and received no response, so created this post, and very quickly received a rebuttal from Ciaran claiming that he had immediately responded to our initial emails. 

From an email received from Ciaran Maguire back in April 2010:

"I think it is very important to note that I have signed a contract with a new bond company Provident Capital Indemnity (PCI) to underwrite the Palm View Resort and I am very proud to say that the Palm View Resort is the ONLY development in the world to have the Guaranteed Rental fully bonded with the financial market place in London hailing the brokering of the deal as a “pioneering product that will change the overseas property market for good”. I understand that the previous bond company we entered into a contract with has now gone into administration that is why I personally outlayed in excess of €100,000 on carrying out a full financial report on PCI via Dun and Bradstreet, a market leader in carrying out financial reports on Finance and Insurance houses and the report shows that PCI have assets in excess 250,000,000 USD and deem to be very secure as an underwriter for Palm View Resort."

It appears Ciaran should also look for his money back from Dun and Bradstreet (who typically charge about  $150 for a credit report - and if reports from the SEC are anything to go by they don't really put a lot of effort into compiling them). This new bond underwriter doesn't appear to have much in the way of real assets and isn't thought of too highly by the US Government's Securities and Exchange Commission (SEC) - See Here (you'll need Adobe Reader to read the PDF document).

The case against the Defendant Jorge Castillo (PCI Auditor) was successful, he is to be sentenced on May 22nd, 2012. The case against the Defendant Minor Vargas Calvo (President and owner of PCI) has yet to be executed, it is due to start on February 12th, 2012. See the report from the Wall Street Journal here - DOJ: Purported Auditor of Provident Capital Pleads Guilty in Scheme

This court case was brought by the SEC back in January 2011. You'll get the gist of the accusations and the very specific wrongdoing the SEC felt was undertaken by PCI from the PDF document above. 

We've included some highlights below in case you don't fancy trawling through all 34 pages of the document, and who could blame you?

4. ...Contrary to their representations, however, Castillo never conducted an audit of PCI and instead issued clean audit reports at Vargas’s bidding, thereby supporting the illusion that PCI had materially larger assets and greater financial wherewithal to support its obligations under the life settlement bonds.  PCI’s “audited” financial statements reflect what, upon information and belief, appears to be a fictitious “Long Term Asset” that has comprised some 70% to 80% of PCI’s total reported assets from at least 2003 to the present.  PCI’s “audited” financial statements were provided to Dun & Bradstreet (“D&B”), which issued PCI a favorable rating of “5-A/S,” based exclusively on PCI’s reported net worth.  PCI then misleadingly represented in its marketing materials that D&B’s rating is a reflection of “successful customer satisfaction” and “the ability to maintain one of the insurance industry’s lowest loss ratios.”  PCI and Vargas also have represented that PCI was backed by a “bouquet” of reputable reinsurers that would backstop PCI’s obligations under its life settlement bonds when, in fact, PCI had no reinsurance coverage."

6. In February 2010, fearful that regulators would learn of his misconduct, Castillo urged Vargas to destroy his emails and other documents, telling Vargas in an email that their “best option is to prepare for the worst.”  Castillo then attempted to create backdated audit work papers that would evidence his purported audits of PCI’s financial statements, in one instance asking Vargas, “DO YOU HAVE ANY REAL ACCOUNTING?”  After working with Vargas to review some of PCI’s business records – years after his purported audits – Castillo described the exercise as the “first time we’ve had the opportunity to analyze everything . . . better late than never.”    

7. ... PCI continues to make false and misleading statements and issue bonds on new life settlement offerings in Europe and, upon information and belief, Vargas is contemplating changing PCI’s name to better enable the fraud to continue undetected. 

9. Relief Defendant Desarrollos Comerciales Ronim S.A. received some or all of the proceeds of defendants’ unlawful scheme under circumstances in which it is not just, equitable or conscionable for Desarrollos Comerciales Ronim, S.A. to be so enriched.

10. The Commission, in the interest of protecting the public from any further unscrupulous and illegal activity, brings this action against the Defendants, seeking temporary, preliminary and permanent injunctive relief, disgorgement of all illicit profits and benefits Defendants have received plus accrued prejudgment interest and a civil monetary penalty.  The Commission also seeks an asset freeze, an accounting and other incidental relief, as well as the appointment of a receiver to take possession and control of Defendants’ assets for the protection of Defendants’ victims.

15. Minor Vargas Calvo (“Vargas”), 51, is a citizen and resident of Costa Rica.  He is the President of PCI and of Desarrollos Comerciales Ronim S.A.   Vargas has been active in PCI’s business since 2002.  By at least 2004, he became PCI’s President, and he has been its majority stockholder since no later than 2005.  Since 2005, PCI has been the subject of at least two state regulatory actions, including the following:  In 2006, the Texas Department of Insurance entered a cease-and-desist order against PCI for engaging in the unauthorized business of insurance in Texas in connection with its issuance of bonds on bonded life settlement contracts; in 2008, the Texas State Securities Board, entered a cease-and-desist order against PCI for, among other things, failure to register its bonds with the Securities Commissioner of the State of Texas and offering securities for sale in Texas without being registered as a securities dealer or agent and for engaging in fraud.  Vargas also is president of Grupo Icono, a Costa Rican company that markets a number of services and lines of business to soccer teams.

16. Jorge L. Castillo (“Castillo”) is an accountant who resides in New Jersey.  At all times relevant to this Complaint, Castillo held himself out to be a Certified Public Accountant licensed in Costa Rica and, through 2009, in New Jersey.  The State of New Jersey Board of Accountancy currently lists Castillo’s license as inactive.  Castillo publicly presented himself to be PCI’s independent, outside auditor commencing no later than PCI’s fiscal year ended September 30, 2003 (“Fiscal Year 2003”).  Since then, Castillo has sought and received cash loans from Vargas to help cover medical and other expenses of his family (including his in-laws) in the United States and Costa Rica and has received other compensation from Vargas outside of the auditing relationship.

34. Upon information and belief, PCI and Vargas currently are marketing and attempting to sell PCI’s bonds to issuers and others in the United States and abroad.  In December 2010, PCI announced that financial guarantee bonds are a current growth area for the Company.

35. The overall face value of the life insurance policies bonded by PCI – and sold through the above-identified issuers including A&O and ASA – exceeds $670 million.

36. PCI charged as a premium six to eleven percent of the total face value of each life insurance policy that it bonded.  These premium payments, including payments made by A&O, ASA and other life settlement issuers, typically were sent to a U.S. dollar-denominated bank account in Costa Rica in the name of Relief Defendant Desarrollos Comerciales Ronim S.A.

62. The first part of D&B’s rating is an estimate of the company’s financial strength and is based on the company’s self-reported net worth.  PCI was automatically assigned the “5A” rating because its materially false and misleading financial statements indicated that it had a net worth higher than $50 million.  D&B assigns the first part of its rating based on company provided data and does not independently verify the accuracy of the data provided, which, in the case of PCI, was purportedly audited by Castillo

63. The second part of D&B’s rating is a composite credit appraisal, but, because PCI is a service company and D&B does not perform credit appraisals of service companies, PCI was automatically assigned an “S,” which the report explains means “Service -- Not Applicable – No Condition Assigned.”  PCI’s overall “5A-S” rating did not reflect any qualitative assessment by D&B.

67. Additionally, from at least October 2004 to the present, PCI and Vargas not only touted PCI’s D&B rating, but also, they suggested to issuers and the public that the D&B rating was a reflection of substantive analysis and review by D&B.  PCI has stated on its website since October 2004, that:
"As a private fully recognized insurance company, PCI has chosen to use the rating services of [D&B] Internationally.  PCI’s strict underwriting guidelines [are] responsible for maintaining the highest rating attainable (5A) from D&B indicating successful customer satisfaction and the ability
to maintain one of the insurance industry lowest loss ratios." Contrary to PCI’s claim, the D&B rating was unrelated to “customer satisfaction” and did not reflect low loss ratios or any appraisal of PCI’s credit-worthiness.  It was based solely on PCI’s materially false and misleading financials.
70. ... PCI did not and does not have reinsurance coverage or any other contractual relationship with the reinsurers listed in its sample bond.  

75. ...  a North Carolina-based sales agent informed a customer that PCI had D&B’s “highest rating” and was reinsured “by some of the biggest companies around,” including AIG and Swiss Re.  As a result, the customer invested $254,000 in the A&O offering.

78. ... PCI and Vargas violated a cease-and-desist order issued by the Texas Department of Insurance in 2006 that prohibited PCI from engaging in unauthorized insurance business in Texas.  PCI and Vargas similarly ignored a Texas State Securities Board’s cease-and-desist order against PCI in 2008.  

81. "Recently, PCI has been forced to use incoming premiums on a new life settlement offering to make partial payments on claims lodged against PCI bonds on investments in which the policyholder outlived his or her life expectancy."

In other words, the SEC is accusing PCI of running a Ponzi Scheme. Sound familiar?  

If you look closely at the picture accompanying this piece, you'll have pre-empted the news that the Ciaran Maguire Group has now started marketing a development in St. Lucia - - which will come as a bit of a shock to those who have invested in, and to date not received, a property in Cape Verde. 

More on this anon.