Tuesday 26 March 2019

Anglo chief Drumm is found guilty of fraud

Former Anglo Irish Bank executive David Drumm outside Dublin's Central Criminal Court, after he was found guilty of two fraud charges. Photo: Brian Lawless/PA
Former Anglo Irish Bank executive David Drumm outside Dublin's Central Criminal Court, after he was found guilty of two fraud charges. Photo: Brian Lawless/PA

Anglo Irish Bank's disgraced former chief executive David Drumm faces a potentially long jail stretch after he was found guilty of taking part in a €7.2bn "con" during the 2008 financial crisis.

A jury convicted Drumm of conspiracy to defraud and false accounting by unanimous verdict after one of Ireland's longest-running criminal trials.

He stared impassively as the verdict was read out after the 87-day trial at Dublin Circuit Criminal Court.

Judge Karen O'Connor remanded him on bail for sentencing later this month after his defence made a bail application on "humanitarian" grounds.

Gardai had objected, saying they considered Drumm a "flight risk."

The jury reached its verdicts after deliberating for 10 hours and 32 minutes.

The disgraced banker, who left the Criminal Courts of Justice to a media scrum, did not respond to questions as he made his way to a people carrier with blacked-out windows.

Drumm (51) had denied conspiring to defraud by dishonestly creating the impression that Anglo's customer deposits were €7.2bn larger than they really were in September 2008.


He conspired with Anglo's former finance director, Willie McAteer, and head of capital markets, John Bowe. He also conspired with Denis Casey, the former CEO of Irish Life and Permanent (ILP), and others.

The case centred on a series of interbank deposits that circulated between Anglo and ILP.

Drumm succeeded Sean Fitzpatrick, right, as Chief Executive Officer of Anglo in 2005
Drumm succeeded Sean Fitzpatrick, right, as Chief Executive Officer of Anglo in 2005

Drumm also denied false accounting, by providing misleading information to the market.

At 3.12pm yesterday, the jurors filed back into the courtroom and the forewoman handed the court registrar the issue paper.

"You say the accused, David Drumm, is guilty on count number one," said the registrar.

The forewoman confirmed that this was unanimous.

The verdict on the second count was the same.

Drumm, dressed in a black suit with an open-necked blue shirt, remained seated and looked at the jury as the verdicts were read out. Mouth slightly open, he showed no emotion and looked down at one point, folding and unfolding his arms.

Judge O'Connor thanked the jurors and excused them from further jury service for life.

Prosecutor Paul O'Higgins said the State was ready to call evidence for sentencing.

Detective Sergeant Michael McKenna gave evidence of his objections to Drumm being allowed to remain on bail pending a sentencing hearing.

He said Drumm had enjoyed a presumption of innocence during the trial but had now been found guilty of two serious offences.

He had been under strict bail conditions since he was arrested in March 2016, having been extradited from the US.

Drumm was "acutely aware" that the individuals with whom he had been found guilty of conspiring "have received substantial terms of imprisonment" for their roles, said Det Sgt McKenna.

"I firmly believe he poses a serious flight risk," he told the court.

Drumm was in custody in the US for a number of months but "did ultimately agree to come back" to Ireland, he said.

It was a significant fact that Drumm had consented to return to this jurisdiction, said Brendan Grehan, defending.

He had now been here for more than two years and had abided by his bail conditions at all times.

His wife, who had returned from Boston, was now back in the US at the graduation of one of their children.

Mr Grehan's application for bail was "on humanitarian grounds" because his client's wife and children were not in the country.

He was seeking "the indulgence" of the court for two weeks, said Mr Grehan.

Because Drumm had previously adhered to his bail conditions, Judge O'Connor remanded him on bail to June 20 for sentencing.

Conditions are that he signs on daily at Balbriggan Garda Station, does not apply for a new passport and is contactable by phone at all times.

Outside court, Detective Superintendent Gerard Walsh of the Garda National Economic Crime Bureau (GNECB) said the verdict emphasised the need to conduct business "with honesty and integrity".


The deal at the centre of the trial involved Anglo placing cash with ILP, which then passed the money back to Anglo through its non-banking subsidiary, Irish Life Assurance (ILA).

Because ILA was an assurance company rather than a bank, Anglo was able to re-categorise the cash as having come from a corporate customer. This would be seen by the markets as a better source of funding than interbank lending.

Anglo placed an initial €1.2bn with ILP but after that, the prosecution said, the money merely "went around in a circle." When the year-end results had to be reported to the markets on December 3, Anglo included the €7.2bn in its total customer deposits figure, but did not disclose where it had come from.

Anglo's external auditors Ernst & Young signed off on the accounts but a prosecution expert witness in the trial said it had been "inaccurate and misleading" for Anglo to include the €7.2bn in the deposits figure.

The defence maintained Drumm had "togged out for Ireland" and was acting "in good faith" in trying to save the bank. However, the prosecution said what Drumm was "the man who called the shots" in Anglo and took part in a "massive con".

Promoted articles

Entertainment News