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Former Anglo Irish bankers found guilty of €7.2bn conspiracy

By Declan Brennan, Conor Gallagher and Dearbhail McDonald

Published 02/06/2016

Former Anglo banker Willie McAteer
Former Anglo banker Willie McAteer

Two former executives in Anglo Irish Bank have been found guilty of conspiracy to defraud following the longest-running criminal trial in the Republic of Ireland's history.

Anglo's former head of Capital Markets, John Bowe, and the bank's former finance director, Willie McAteer, had denied conspiring with former Irish Life and Permanent executives, Denis Casey and Peter Fitzpatrick, and others to mislead depositors, lenders and investors by making Anglo Irish Bank's corporate deposits look larger than they actually were.

Bowe, from Glasnevin, Dublin; McAteer, of Greenrath, Tipperary town, Co Tipperary; Casey, from Raheny, Dublin; and Fitzpatrick, of Convent Lane, Portmarnock, Dublin, all pleaded not guilty to conspiring together and with others to mislead investors by setting up a €7.2bn circular-transaction scheme.

The prosecution alleged that McAteer authorised a €7.2bn scheme between March 1, 2008 and September 30, 2008 to bolster Anglo's balance sheet and that Bowe was involved in executing it.

The unanimous guilty verdicts against Bowe and McAteer were returned yesterday afternoon after almost 38 hours of jury deliberations over the course of nine days at Dublin's Circuit Criminal Court.

The jury will resume deliberations in relation to Mr Casey and Mr Fitzpatrick this morning, the 85th day of the trial.

Conspiracy to defraud is one of a series of inchoate (early stage but not complete) offences. The offence of conspiracy to defraud is not on the statute books and trial judge Martin Nolan will have discretion on what sentence to impose.

Bowe (52) and McAteer (65) were on trial accused of conspiring to mislead investors, depositors and lenders about the true health of Anglo.

Judge Nolan remanded the two men on continuing bail until Friday after hearing that there was no objection to bail.

There was no reaction from the men when the verdicts were read out at Dublin's Circuit Criminal Court.

The verdicts came after the jury had queried whether the verdicts that they had reached on two counts would impinge on the other two counts.

The judge told the jury that to bring in guilty verdicts, the jurors must find at least two people conspired together.

The State's case was that the four men were involved in setting up a circular scheme of billion-euro transactions where Anglo lent money to ILP and ILP sent the money back, via their assurance firm Irish Life Assurance, to Anglo.

The scheme was designed so that the deposits came from the assurance company and would be treated as customer deposits, which are considered a better measure of a bank's strength than inter-bank loans.

The €7.2bn deposit was later accounted for in Anglo's preliminary results on December 3, 2008, as part of Anglo's customer deposits figure.

The prosecution alleged that the entire objective of the scheme was to mislead anybody reading Anglo's accounts by artificially inflating the customer deposits number from €44bn to €51bn, a difference of 16pc.

Lawyers for the Anglo accused had argued that their clients believed that the deposits were real deposits and were accounted for correctly on Anglo's balance sheet and so no fraud was carried out.

The prosecution argued that there was no commercial substance to the transactions and that their only purpose was to deceive.

Lawyers defending the former ILP executives argued that their clients had no control over how Anglo would account for the deposits and had no intention to mislead the public.

The guilty bankers

Willie McAteer

Donegal native Willie McAteer was one of the most senior executives at Anglo Irish Bank by the time of the crash, and was a director with a seat at the board.

Originally trained as a chartered accountant he eventually joined Anglo Irish Bank in 1992.

For much of his 15 years with the bank, he helped oversee the period of massive growth which lasted until the crash.

By 2008, Mr McAteer was second-in-command after David Drumm at Anglo Irish Bank, and as finance director he was responsible for managing risk as well as finance at the lender.

John Bowe

Career banker John Bowe joined Anglo Irish Bank in 2001 as head of its debt capital markets unit, part of the bank that borrowed on the markets and dealt with other lenders. He previously worked at a number of other banks.

By 2006 he had been appointed to Anglo’s senior executive board, putting him just below director level. His job at the bank, of keeping cash at adequate levels, became intense during the crisis, as international firms pulled billions in deposits out of Anglo.

Mr Bowe continued to work with Anglo after it was taken over by the State. He was part of a team that dealt with the restructuring of the Quinn Group loans.

The charge

Bowe and McAteer pleaded not guilty to conspiring together and with others to mislead investors by setting up a €7.2bn circular transaction scheme between March 1 and September 30, 2008 in order to bolster Anglo’s balance sheet.

The State’s case was that the four men were involved in setting up a circular scheme of billion-euro transactions where Anglo Irish Bank lent money to ILP and ILP sent the money back to Anglo via its assurance firm, Irish Life Assurance.

On Wednesday, the jury was told that although all four of the defendants were named on each charge sheet, the jury could find one of them guilty of conspiring with others and acquit three.

Trial judge Martin Nolan said that to bring in guilty verdicts on conspiracy charges, the jurors must find that at least two people conspired together.

The penalty

Conspiracy to defraud is one of a series of inchoate offences, commonly described as a crime of preparing for, or seeking to commit, another crime.

Conspiracy to defraud is a common-law offence, meaning that it is not on the statute books and a court is “at large” when it comes to sentencing.

Six years ago, the Law Reform Commission, the Government’s law reform watchdog, published a report on inchoate offences and recommended the retention of the offence of conspiracy to defraud, which the commission said was “sufficiently clear in scope to remain a valuable part of the criminal law”.

Irish Independent

Irish Independent

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