Ireland jails 3 top bankers over 2008 banking meltdown

Ireland jails 3 top bankers over 2008 banking meltdown

July 30, 2016
Former director of finance at Anglo Irish Bank, Willie McAteer, arrives at the Criminal Courts of Justice in Dublin, Ireland, on Friday. — Reuters
Former director of finance at Anglo Irish Bank, Willie McAteer, arrives at the Criminal Courts of Justice in Dublin, Ireland, on Friday. — Reuters

DUBLIN — Three senior Irish bankers were sentenced on Friday to between two and three-and-a-half years in prison for conspiring to defraud investors, the most prominent prosecution case arising from the 2008 banking crisis.

The lack of convictions until now related to the crash has angered Irish taxpayers, who had to stump up 64 billion euros — almost 40 percent of annual economic output — after a property collapse forced the biggest state bank rescue in the euro zone.

The crash pushed Ireland into a three-year sovereign bailout in 2010 and the finance ministry said last month that it could take another 15 years to recover the funds pumped into the banks still operating.

Former Irish Life and Permanent Chief Executive Denis Casey was sentenced to two years and nine months. Willie McAteer, former finance director at the failed Anglo Irish Bank, and John Bowe, its ex-head of capital markets, were given sentences of 42 months and 24 months respectively.

All three were convicted of conspiring together and with others to mislead investors, depositors and lenders by setting up a 7.2 billion euro circular transaction scheme between March and September 2008 to bolster Anglo’s balance sheet.

Irish Life placed the deposits via a non-banking subsidiary in the run-up to Anglo’s financial year-end, to allow its rival to categorize them as customer deposits, which are viewed as more secure, rather than a deposit from another bank.

“By means that could be termed dishonest, deceitful and corrupt they manufactured 7.2 billion euros in deposits by obvious sham transactions,” Judge Martin Nolan told the court, describing the conspiracy as a “very serious crime.”

“The public is entitled to rely on the probity of blue chip firms. If we can’t rely on the probity of these banks we lose all hope or trust in institutions,” Nolan said.

None of the defendants reacted visibly to the sentencing before being led away by officers.

Lawyers for the accused had argued during the trial that their motivation in authorizing the deal was the “green jersey” agenda, the financial regulator’s request for Irish banks to support one another as the financial crisis worsened.

Two other Anglo bankers, chief operations officer Tiarnan O’Mahoney, 56, and former company secretary Bernard Daly, 67, earlier this year had their sentences quashed on appeal after spending several months in prison.


July 30, 2016
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