Belfast Telegraph

Former Anglo Irish Bank boss denies fraudulent bank transfers

David Drumm was Anglo chief executive from January 2005 until December 2008.

Former Anglo Irish Bank boss David Drumm has denied arranging dishonest or fraudulent multibillion-euro transfers to boost the lender’s books in the months before it went bust, a court has been told.

The ex-banker is charged with conspiracy to defraud and false accounting relating to 7.2 billion euro being moved between Anglo and the Irish Life and Permanent (IL&P) and Irish Life Assurance (ILA) companies between March and September 2008.

Drumm has pleaded not guilty.

In the first day of evidence in a trial which is expected to run for several months, his lawyers told the court that he does not deny the money was moved.

Defence barrister Tessa White said: “David Drumm accepts all of the factual matters relating to the mechanics of how the September transactions happened and the only issue that he disputes is whether they were fraudulent or dishonest or that there was any dishonesty in their reporting.”

In a series of admissions on Drumm’s behalf, Ms White detailed a series of transfers between Anglo and IL&P and ILA as the global financial crisis hit hard in 2008.

In March Anglo placed one billion euro with IL&P and ILA deposited 750 million euro in return.

In June that year IL&P moved bonds worth more than three billion euro to Anglo.

In return Anglo deposited three billion euro.

In September Anglo moved 7.2 billion euro to IL&P.

In return IL&P moved the same amount back to Anglo on behalf of ILA.

All the monies were repaid within weeks of each transaction.

The aims were to increase Anglo’s non-bank deposits and to reduce IL&P’s reliance on European Central Bank funding.

More transactions had been planned for December but they were never completed.

Ms White told the court: “David Drumm as chief executive officer authorised the March, June, September and December transactions and assumes responsibility for their execution by Anglo.”

Judge Karen O’Connor told the jury of 10 men and five women that the admissions would considerably reduce the length of the trial.

Earlier, Paul O’Higgins, Senior Counsel for the state, told Dublin Circuit Criminal Court that Drumm had arranged the 7.2 billion euro September transfer.

He said: “This was a completely artificial process leading to a dressing up, a more than dressing up, a falsification of Anglo Irish Bank’s balance sheet so that its non-bank deposits were 7.2 billion euro bigger than they really were.”

The jury was told that it will hear tape-recorded phone calls from Anglo’s treasury department, including calls about the multibillion-euro transfers.

Mr O’Higgins said the money was moved at “lightning speed” and the prime objective was to “dishonestly create the false impression” at Anglo’s year end in 2008 that its non-bank deposits were in the 50 billions.

“That ultimately happened,” the barrister said.

Drumm, who is living in Skerries, Co Dublin, is on bail.

The 51-year-old wore a dark suit and an open-necked blue shirt as he sat in court listening to the prosecution’s opening statement.

Drumm was Anglo chief executive from January 2005 until December 2008. He left Ireland for Boston in 2009 after the lender collapsed.

Mr O’Higgins told the court: “Mr Drumm was the chief executive officer of Anglo Irish Bank.

“He was, the prosecution says, the man who called the shots. As CEO he was effectively in charge of the operation.

“You are not to draw conclusions from his hat as CEO. You are to draw conclusions with the evidence here about his involvement.”

Anglo was nationalised by the then government, a move which cost Irish citizens 29 billion euro.

Drumm was brought back to Ireland in March 2016 under an extradition warrant.

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