Anglo Irish Bank fraud trial begins

Published Wednesday, 05 February 2014
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Three former bankers at the now defunct Anglo Irish Bank have gone on trial in one of the biggest ever trials in Irish legal history.

Anglo Irish Bank fraud trial begins
Sean FitzPatrick denies the charges put to him. (© PA)

Former chairman of the bank Sean FitzPatrick, finance director Willie McAteer and chief financial officer Pat Whelan face a total of 16 charges relating to allegations they tried to inflate the share price of the organisation.

They concern the alleged loans of €451m to the family of bankrupt former billionaire Sean Quinn, including his wife Patricia and son Sean junior, and a golden circle of 10 clients hand-picked to invest in stock to prop up the share price.

The three accused pleaded not guilty to providing unlawful financial assistance to individuals in 2008 for the purchase of shares in the bank, contrary to section 60 of the Companies Act.

Whelan also denied a further seven charges of being privy to the fraudulent alteration of loan facility letters to seven individuals.

The prosecution opened its case in front of Judge Martin Nolan at the Circuit Criminal Court in Dublin on Wednesday morning.

The court was told that Anglo created a plan to lend money to the Quinns and a so-called "Maple 10" of high net worth clients, mostly developers and including Belfast-born businessman Paddy McKillen, to buy up the secret Quinn shareholding.

Paul O'Higgins, senior counsel for the State, revealed the original plan to unwind the position was thought to cost €800m but as the share price fell it ultimately involved €450m (£370m) being loaned for the Maple 10 and €175m (£145m) for the Quinn family.

"This was lending in very extraordinary circumstances which had nothing whatsoever to do with the ordinary course of the bank's business," he said.

Lawyers for the three defendants made a number of admissions on their behalf to the court after the prosecution opened the case.

Brendan Grehan, senior counsel for Whelan, said his client had written a report on the Quinn and related transactions before the probe was launched.

He added that the defendant believed the loans were part of the bank's ordinary business and the then financial regulator Patrick Neary had agreed with the plan.

The lawyer added that the bank's own compliance department had received legal advice on the plan.

Vast amounts of technical and financial evidence will be put before the unprecedentedly large jury of 12 people with case management hearings having been told there are 24 million documents and 800 witness statements.

An IT system will be used to electronically display documents during the trial while jurors will also be given laptops to view material.

Due to the expected level of public interest, a special viewing room was opened in the Phoenix Park courts complex to allow people to watch the trial via video link.

FitzPatrick, 64, of Whitshed Road, Greystones, Co Wicklow; McAteer, 62, of Auburn Villas, Rathgar, south Dublin; and Whelan, 50, of Coast Road, Malahide, Co Dublin, are on bail.

The maximum sentence they face for each offence is five years in jail, with the lower end of the sentencing scale a fine of €3,100.

Anglo Irish Bank's share price collapsed in 2008 after it had reached an all-time high a year earlier.

The Irish government stepped in with a €29billion bailout of the bank and later the institution was nationalised in 2009.

Anglo was subsequently rebranded the Irish Bank Resolution Corporation and then liquidated in 2013.

© UTV News
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