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Thursday 8 December 2016

Judge criticises State agencies as he jails 3 bankers in Anglo trial

Former Head of Finance at Anglo Irish Bank, Willie McAteer. Photo: Collins Courts
Former Head of Finance at Anglo Irish Bank, Willie McAteer. Photo: Collins Courts

The judge who jailed three former banking executives for a €7bn conspiracy criticised State authorities for "turning a blind eye".

Handing down sentences to the three men, Judge Martin Nolan said former Anglo Irish Bank executives John Bowe (52) and Willie McAteer (65) and the former group chief executive of Irish Life and Permanent plc (ILP) Denis Casey (56) took part in a scheme that was "deceitful, dishonest and corrupt".

He said the conspiracy potentially affected thousands of people and that the starting point for his sentence was eight years.

The judge said certain State authorities turned a blind eye to "optically driven balance sheet management" which he said was a euphemism for banks entering into transactions which have little or no effect.

Attitude

The evidence during the trial was that Bowe believed the attitude of the Financial Regulator was one of "I'm not looking" and that Casey became involved with the transactions after being told by the Regulator that Irish banks needed to "don the green jersey" and help each other out during the unprecedented global credit crunch.

Judge Nolan also criticised the auditors who signed off on the bank's books.

He said it beggared belief that Anglo's auditors, Ernst & Young (now EY), had signed off on Anglo's end-of-year accounts.

"They should have known what was occurring if they were doing their job properly," he said, and commented as to whether it was a case of "blindness or wilful blindness".

During proceedings, he said the three men had failed to act with honesty and integrity by manufacturing €7.2bn in deposits in what were obviously "sham transactions".

The deals were done in September 2008 in order to make Anglo's books look healthier than they were.

Judge Nolan said it was a serious matter that two blue-chip companies conspired together to manipulate public accounts.

He said individual depositors and investors relied on and made decisions based on the public accounts of companies.

He said that if the public cannot rely on probity of blue-chip companies and banks, we lose all trust in them.

He added that money was important to people, especially to older people who have nest eggs invested in banks.

"They are entitled to rely on honesty and integrity. In this case honesty and integrity were sorely lacking," Judge Nolan said.

He added that Anglo's former CEO, David Drumm, was the driving force behind the scheme.

Bowe, of Glasnevin, Dublin; McAteer, of Greenrath, Tipperary town; and Casey, from Raheny, Dublin, had all pleaded not guilty to conspiring together and with others to defraud by setting up a €7.2 billion circular transaction scheme between March 1 and September 30, 2008 to bolster Anglo's balance sheet.

Jailing McAteer for three-and-a-half years, Judge Nolan said he had authorised the transactions when he knew what he was doing was underhand, deceitful and corrupt.

He told Bowe that he was the chief man in Anglo's treasury room and he had failed to act with honesty. He told him that, in law, following orders was no defence.

Grave

He imposed a two-year sentence on Bowe, telling him the lower sentence was because he was "a lesser functionary" and not a board member.

He told Casey that he had made a grave error of judgment in authorising the transaction with Anglo.

He said he was a man who should have known better. He jailed him for two years and nine months after telling him that Anglo was the author of the scheme but that he had behaved disgracefully and reprehensibly in cooperating with it.

Casey told gardai that he only agreed to the short-term loans with Anglo on condition that there was no risk to his company and that he did not know or intend that Anglo would misrepresent the loans as customer deposits.

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