Luxury hotels ripped off by a disgraced City insurance broker nicknamed “The Pirate of the Caribbean” are trying to sue his ex-employers for $10 million.
Charles O’Sullivan, a former managing director at two Lloyd’s of London brokerages, masterminded a “grossing up” scam, which saw clients charged twice for six-figure fees and premiums.
O’Sullivan, 60, of Chingford, swindled one hotel out of of $150,000 (£118,000) by wrongly charging a concealed fixed fee on top of $406,000 (£321,000) in brokerage.
The SuperClubs consortium of 14 top hoteliers in Jamaica, the Cayman Islands, Bahamas and Florida, who say they were defrauded out of millions, will join forces in a legal battle against O’Sullivan’s ex-employers Besso Limited, at the High Court in February. They claim they are entitled to $10 million (£8 million).
Lennox Lewis, Rod Stewart, Harrison Ford and Janet Jackson are among celebrities who have stayed at the all-inclusive hotels owned by SuperClubs.
Besso has launched its own action to have the matter thrown out, saying it has no merit and is out of time.
In March 2017, O’Sullivan was found guilty by a Lloyd’s tribunal on three counts of discreditable conduct. The married father of one was declared “unfit and unsuitable”, banned and ordered to pay £138,698 in costs, cut by £10,000 on appeal. But he was spared a fine because of the impact of being suspended from his £350,000-a-year job.
Lloyd’s said in a market bulletin: “Mr O’Sullivan knew the deception would enable his company to retain far more by way of remuneration than the assured were prepared to allow… dishonestly obtaining remuneration by deception.”
O’Sullivan ran the scam at Lloyd’s brokerages Besso, where he worked from 2004 to 2011, and at Bennett Gould & Partners until he was fired for gross misconduct in 2012.
In July 2018, a High Court judgment laid bare his dishonesty. He declared himself bankrupt and flew to Spain before a judge awarded BG&P £1.2 million in damages against him for misrepresentation.
Judge David Waksman ruled O’Sullivan had acted dishonestly and his conduct amounted to fraud leaving BG&P in a “financial crisis”.
He said: “It is plain… there was serial and knowing misrepresentations by Mr O’Sullivan concerning the income and client representations. He obviously knew what he had done previously amounted to being dishonest, although he purports to deny that now.”
The judge also criticised O’Sullivan for missing parts of the court case after claiming he was too ill, adding: “The reality was there was no good medical reason why he could not attend… taking such medication for depression as he had been prescribed would not have stopped him from attending court, and from being cross-examined, and from making final submissions.”
Clients in Jamaica described O’Sullivan as “The Pirate of the Caribbean”, while Lloyd’s colleagues widely called him “Charlie O’Dangerous”. He racked up £40,000 in expenses on Chelsea tickets and entertaining at Stamford Bridge.
Paul Vincent, director of SuperClubs’ Bloody Bay Hotel in Jamaica, said in a High Court submission last month: “Charles O’Sullivan operated a fraudulent system… without knowledge or consent of SuperClubs. Brokerage was wrongfully and fraudulently received and retained… Broadly speaking, this was achieved by ‘grossing up’ or by taking undisclosed commission from underwriters (‘concealed brokerage’), or by similar means.” He alleged that Besso had received the “secret profit”.
Besso, taken over by Wall Street giant BGC Partners just before O’Sullivan was expelled, disputes the $10 million figure. Chairman Colin Bird declined to comment further. Lloyd’s and O’Sullivan also declined to comment. The case will be heard on February 22.
