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Bankers conspired to pretend Anglo Irish Bank had €7.2bn more in non-bank deposits than it did, court hears

By Eimear Cotter

Published 20/01/2016

Former executives are accused of conspiring to mislead existing and potential investors, lenders and depositors
Former executives are accused of conspiring to mislead existing and potential investors, lenders and depositors

Four former bankers conspired together to allow the pretence that Anglo Irish Bank had €7.2 billion more in real non-bank deposits than it really had, it has been alleged.

This was allegedly done so that "people who lent to Anglo would continue to lend" to them, Paul O'Higgins SC said in his opening address to the jury.

The trial of two Anglo Irish bank and two Irish Life and Permanent (ILP) executives accused of conspiring to mislead investors has begun at Dublin Circuit Criminal Court.

The executives, including former ILP CEO Denis Casey and former Anglo head of finance William McAteer, are accused of conspiring to mislead existing and potential investors, lenders and depositors to make Anglo Irish Bank appear approximately €7.2 billion better off than it was.

An enlarged jury of eight men and seven women was sworn in two weeks ago at Dublin Circuit Criminal Court for the trial before Judge Martin Nolan which is expected to last five months.

Mr McAteer (65) of Greenrath, Tipperary town, Co Tipperary and Mr Casey (56), from Raheny, Dublin stand trial alongside Peter Fitzpatrick (63), from Malahide, Dublin, who had been ILP’s former director of finance and John Bowe (52), from Glasnevin in Dublin, who had been Anglo's head of capital markets.

They have pleaded not guilty to conspiring together and with others "to defraud by engaging in transactions between Anglo Irish Bank Corporation, Irish Life and Permanent and Irish Life Assurance to dishonestly create the false and misleading impression that deposits from a non-bank entity to Anglo during the year ending September 30, 2008 were approximately €7.2 billion larger in amount than they really were.

It is alleged that this conspiracy was done with the intention "to induce existing and potential depositors, lenders and depositors to Anglo to make decisions concerning their deposits, investments or loans on the assumption that deposits from non-bank entities were much larger than they really were".

In his opening address to the jury, prosecution counsel, Paul O'Higgins SC, said the case concerned events which allegedly occurred between March 1 and September 30, 2008, when Anglo provided its end of year accounts.

Mr O'Higgins claimed that in the days before September 30, 2008, the accused conspired to make financial transactions were made from Anglo to Irish Life & Permanent, involving Irish Life Assurance, and then bank to Anglo, so as to appear customer deposits were greater than they were.

He said these customer deposits were "actually funded indirectly by Anglo".

Mr O'Higgins said that at some time on September 29, 2008 Anglo discovered it had no more money to keep things moving so it stops for a period as it could not access money.

Between September 29 and September 30, "the money does the rounds six more times" so that by September 30 the "reporting snapshot" gave the totally false impression of customer deposits of €7.2 billion, he claimed.

Mr O'Higgins said it is alleged that Mr Fitzpatrick and Mr McAteer authorised these transactions, Mr Bowe "knowingly authorised and implemented" them and Mr Casey authorised them, with the purpose of "bolstering the Anglo customer deposit base" and leaving Anglo "looking a lot healthier" that it otherwise was.

He said that the whole purpose of the scheme, its raison d'etra, was to "produce the temporary illusion that non-bank deposits had been made to Anglo in a massive, massive sum". He claimed this was to disguise the reality that "non bank deposits were declining at a rate that Anglo feared would alarm those who viewed Anglo as a going concern".

Mr O'Higgins also told the jury there are undoubtedly other people who could have been charged as forming this conspiracy and who took part in events.

However, he said this was not relevant to the jury. "Your role is to decide on the guilt or innocence of the four people before the court", he said.

The trial continues.

Irish Independent

Irish Independent

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