Fraudsters and Charlatans (18 page)

There was more serious opposition from unexpected quarters. Sadleir and those of his political associates who had also accepted appointments had completely underestimated the reaction of the Irish voters, the clergy and the Liberal press, who saw the taking of government office by prominent members of the Irish Brigade as selling out to the establishment.
The Nation
described Sadleir and his friend and supporter William Keogh, who had become Solicitor General, as having committed ‘one of the most flagrant derelictions of public honour ever beheld. . . . That Mr John Sadleir should go straight over to any party conducive to his own personal interests does not surprise us very much,' continued the article, referring to Sadleir's ‘intricate and plotting intellect', adding ‘Mr John Sadleir is a clever man. Inside that sallow and wrinkled face of his ever play schemes and intrigues by the score.'
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Either the 1850 portrait was unusually flattering or Sadleir's cares had weighed heavily upon him. Someone who knew him well commented that ‘his figure was youthful, but his face – that was indeed remarkable. Strongly marked, sallow, eyes and hair intensely black, and the lines of the mouth worn into deep channels.'
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The new officers were obliged to submit themselves for re-election, and in January 1853 the combined effect of what was seen as his defection from the Irish cause and the rumblings of doubt about Dowling's imprisonment eroded Sadleir's vote and he was defeated. The Dowling case must have been particularly damaging, for he was the only defector who was not returned.

While waiting for a new seat to be found he occupied himself with his business life. The
Telegraph
had not maintained its popularity, and would eventually become a weekly paper. It was and remained a huge financial drain. In July 1853 he was back in parliament, winning Sligo by just eight votes. It was not a happy victory, since it was immediately followed by two petitions against him on the grounds of bribery. Once again, he managed to cover his tracks. Sadleir denied the accusations as usual, and there was insufficient evidence to take matters further.

In November 1853 Dowling's second action came before the courts. Crotty had died some months before and an examination of his papers had uncovered a devious scheme in which a number of dupes had been used as intermediaries to conceal both the 1852 plot to entrap Dowling and Sadleir's part in it. Dowling took action against one of the dupes, the blacksmith Edward Lawler, in a case that caused a sensation in both London and Dublin. Acting for Dowling was John McNamara Cantwell, who at last, after his involvement in the Earl of Kingston's affairs, had the opportunity to expose Sadleir.

Sadleir, who had earlier denied he had taken possession of the bond, was now obliged to admit that he had done so, but claimed that the only reason was to help Crotty. He made every effort to distance himself from all the other proceedings against Dowling, but was forced to admit under questioning that he had wanted to prevent Dowling voting against him. The jury found for Dowling, which effectively meant they believed Sadleir to be guilty of corruption and perjury. Sadleir left the court in disgrace, his political career in ruins. Shortly afterwards he submitted his resignation as Irish Lord of the Treasury. He was still MP for Sligo, but thereafter he never again spoke in parliament or sought public office. ‘He seemed oppressed with care, and walked the lobbies like a fallen statesman, who had no longer patronage to dispense.'
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In the following year Dowling took an action against him for damages, and won £1,100.

The Dowling scandal had caused some uneasiness among the shareholders of the Tipperary Bank, who began to offload their shares. Sadleir's old ally James Kennedy sold his shares in November, which were eventually taken up by James Sadleir. Vincent Scully had been trying to disassociate himself from the bank for some time. Unwilling to make a public fuss, which might damage the family business, he voiced his concerns in private letters. In September 1853 he wrote to Sadleir asking him to make all necessary arrangements for ‘winding up all dealings between us. I am particular anxious to leave the Tipperary Bank, being entirely ignorant of its affairs, and having lost all confidence in its management.'
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In January 1854 he wrote to James, pointing out that he had repeatedly expressed his dissatisfaction at the absence of an audit, and this had now led to ‘the secession of some of its best shareholders, besides injuring the bank in other respects'.
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James responded that he personally had never objected to holding an audit but that at every meeting the accounts had been gone into most carefully and to the satisfaction of everyone. He believed that public confidence had increased in the last year ‘notwithstanding the conspiracy got up by a portion of the press to injure the credit of the Tipperary Bank, and the number of times that the Kingston Trustees account case has been before the public'.
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An agreement was finally drawn up in August 1854 for the sale of Vincent Scully's shares to Robert Keating, as trustee for John Sadleir, but when the company report was published in February 1855 Scully discovered that the transfer had not taken place and that he was still on the list of shareholders. Thoroughly irritated by the delay, he immediately wrote to Sadleir: ‘How on earth do you get on at all with others if this is your way of managing serious business?'
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Despite further letters and promises from Sadleir affairs had still not been settled by 24 March when Scully wrote: ‘It is monstrous to have to write so repeatedly about so simple a matter.'
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The transfer was ultimately made in April.

When the affairs of the Tipperary Bank finally came under public scrutiny it was thought that it had only recently come into difficulty and that it was probably the years 1854 and 1855 that were crucial. What private despair Sadleir suffered as a result of the virtual extinguishing of his political life will never be known, but his desperate and disastrous borrowings bolstered by major fraud and forgery seem to date from this time, when he callously began to use the Tipperary funds and the resources of his relatives as his own personal money boxes. Also at this time, his speculations on the Stock Exchange became wilder. He played the commodities market, with notable lack of success. It was later alleged that he lost £120,000 on sugar in the course of a single day in the autumn of 1855, and at other times he lost £35,000 on hemp and £50,000 on iron.

While Sadleir owned a substantial amount of property, most of it was encumbered by loans. As founder and chairman of the Carson's Creek Gold Mining Company, he had no difficulty in obtaining a large loan from its coffers, which was due for repayment in January 1855. When he was unable to repay, he offered as security the deeds of an estate in Limerick. The deed was lodged in the London and County Bank. He later removed it without anyone's knowledge or agreement, and used it as a security for another loan.

The Public Officer of the Tipperary Bank, Wilson Kennedy, who was also well aware of Vincent Scully's concerns, had watched in dismay as Sadleir became more and more indebted to the bank. James, who was initially confident that his brother's properties could cover the loans, also became deeply concerned, especially in view of mounting evidence of dishonest transactions. In March 1855 Sadleir had approached the London and County asking them for an advance of £20,000 on a Tipperary Bank bill of exchange, but had not consulted James about it first. James was furious with his brother and on 7 March 1855 he wrote: ‘I would not be burthened with your constant lies any longer. You may provide for the credit or let it alone. Until I see the money ordered lodged I will not accept the £20,000 or move in it. Your constant lying is worse than anything else . . . In fact your doings and impertinence beat anything.'
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Sadleir continued to ask for loans, protesting that without them he would be ruined, to which James responded: ‘I consider your ruin, as you call it, of very little consequence,' and demanded full legal authority to sell his brother's properties, ‘as I consider you quite incapable and quite unfit. . . . I am certain you bungled every property you had to do with.'
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On 15 March an agreement was drawn up, granting James and Robert Keating the power to dispose of Sadleir's lands, but, against the advice of the solicitor James Kennedy, it was never registered or acted upon. James Sadleir, well aware of the fact that the financial fortunes of his brother and the Tipperary Bank were now almost one and the same, was worried that registering the agreement would expose Sadleir's desperate position. Sadleir held onto his properties, obtained further advances, and plunged still deeper into debt, while Keating washed his hands of him in disgust.

That April Sadleir concocted his most audacious money-making scheme to date. The Tipperary Bank had authorised the issue of 10,000 shares, of which only 4,055 had been taken up, at £10 each. He now proposed to offer the remainder for purchase by English shareholders through the London and County Bank. The difficulty was that the thousands of new shares would dilute the value of established holdings and reduce the amount of dividends. As soon as shareholders realised this, they would sell their holdings, and confidence in the bank would plummet. For the scheme to work, it would have to look as if the shares on offer were not new ones, but transfers from an existing shareholder. Sadleir already had a dupe to hand, an old school friend called Austen Ferrall. In 1846 Sadleir had asked Ferrall to hold shares in trust for a lady cousin who did not want her name to appear as an investor. Ferrall, unaware that the lady did not exist, agreed. Quite what duplicitous scheme Sadleir had in mind on that occasion is unknown, but eleven years later he still had permission to use Ferrall's name. Large numbers of blank share certificates were prepared and assigned to Ferrall, who, still under the impression that he was helping Sadleir's lady relative, was happy to agree to their transfer.

English investors were now made an extraordinarily exciting offer. The shares were offered to them at 25 per cent above par, which was only tenable if the Bank was very prosperous indeed, and to show just how solid the investment really was a prospectus was produced, together with the accounts for 1854, which were said to have been approved by the directors at the annual general meeting of 1 February 1855. The figures were, of course, false and showed a profit of double the true value, while vastly overstating the company's assets. Most of the bank's assets were in fact the debt owed by Sadleir.

The false certificates were passed to a London and County director, Farmery John Law, who, unaware of the fraud, passed them on to his branch managers, inviting them to sell the shares to their customers. With a commission of ten shillings for each share they sold, they plunged into the task with enthusiasm.

In June 1855 Wilson Kennedy, after protesting against the loans being made to Sadleir, decided that he wanted to have no more to do with the Tipperary Bank and offered his shares to James Sadleir. James, realising that the bank could be damaged if his brother's overdraft was made public, agreed to purchase the shares. That month another spectre from the past reared its head as the Earl of Kingston obtained a court decree demanding that both Thomas Eyre, who was supposed to have lent him £40,000, and the Tipperary Bank account for the rents received from his estate.

Sadleir did not want to sell his lands, but the prospect that he might do so was a valuable commodity to him, and on the basis of this, in June he obtained £20,000 from the London and County Bank. A month later this had been sucked into the whirlpool of his financial affairs, and he asked for another £15,000. Fortunately for that bank, the directors were not so trusting as his friends and relatives in the Tipperary. Recognising that he was in financial difficulties, they refused the loan and froze his account.

In the meantime James was taking desperate measures to try to save the bank. He arranged a special meeting of the directors in July, and asked for an advance of £95,000 on the security of his brother's lands, informing them that Sadleir's overdraft amounted to £40,000 (the figure was far higher, but James knew that if he told the truth not only would he not receive the director's agreement, but his gross mismanagement would cost him his position). Sadleir's properties, valued by James at between £450,000 and £480,000, were, he said, to be held by trustees and used to discharge his debts. Trustingly, the directors agreed that the Tipperary Bank would act as guarantor for Sadleir's debts at the London and County Bank. James was paid the first instalment of the £95,000, which he banked immediately. This kept the Tipperary Bank afloat for a little longer, but when it came to registering the deeds to assign Sadleir's estates to the trustees, there was a snag: a number of estates had already been assigned to Thomas Eyre as security for earlier loans. The second instalment of the £95,000 was stopped.

In order to release the securities Sadleir embarked on a scheme to defraud the Royal Swedish Railway Company and the by now 75-year-old Eyre. The Royal Swedish required capital to expand, which was to be raised by selling debentures on the Stock Exchange. Sadleir carried out the sale and pocketed the money. He then wrote to Eyre on 13 August offering him shares in the Royal Swedish for the release of his properties, representing the exchange as a valuable opportunity that should be taken advantage of immediately. As an inducement, he stated that under the new arrangement Eyre would receive an annual income of £5,000. Eyre replied that he would agree to the exchange only if advised to do so by James Kennedy. Sadleir immediately telegraphed Kennedy to tell him that Eyre had made a favourable response, and informed Josiah Wilkinson his solicitor that Eyre had agreed to the arrangement. Wilkinson took Sadleir at his word and obligingly released the remainder of the advance. Sadleir now had to move fast, and wrote to Eyre to close the deal, advising him that ‘whatever serves me in this respect, cannot, I believe damage you'.
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He was still concealing from Eyre the fact that the £40,000 loan to the Earl of Kingston had never reached its intended recipient, and even as these letters went back and forth the Earl filed his decree and waited for judgment.