Anglo’s secret operation to hide Isle of Man audit

ANGLO Irish Bank ran a top-secret operation to hide Revenue’s audit of its Isle of Man accounts, the Irish Daily Mail can reveal.

The plan was so secret that only one Anglo official was allowed to deal with Revenue.

Revenue was even given its own office in Anglo’s headquarters for seven months, but never got to the bottom of who was holding Anglo’s Isle of Man accounts.

Revenue suspected some of the Isle of Man accounts were being used by the bank’s own executives but could not prove it.

Chief executive David Drumm and Anglo executives Wilie McAteer and John Bowe later used one of the Isle of Man accounts to orchestrate a €7.2billion fraud – the largest fraud ever detected in the State and one at the centre of the 2008 financial collapse.

The debacle began when the now-disgraced Drumm returned from Anglo’s US operations to its chief Dublin office in 2003 – just as Revenue was launching a major investigation into the bank’s Isle of Man operations.

Instead of blocking them out, Anglo charmed Revenue officials with their own office in the bank’s St Stephen’s Green headquarters. Revenue was encamped there for seven months – with most of Anglo’s staff having no idea who they were.

The hiding of their identity from staff was due to Drumm’s concerns about leaks to the media.

The plan was successful and Anglo avoided any immediate bad publicity about its offshore accounts. Revenue was so confused by the paperwork that Drumm’s people supplied during the seven months that it relied on Anglo to tell it whether non-resident accounts were bogus or not.

One executive told gardaí he was surprised Revenue relied on him so much as it wrapped up its investigation.

‘To my surprise, Revenue horsetraded on a number of accounts towards the end of the exercise. Revenue was saying, “Maybe that is a bogus account, what are we going to do?” They were asking my view,’ the bank’s former company secretary, Bernard Daly, told gardaí.

Mr Daly, who was the head of banking supervision at the Central Bank before joining Anglo, told gardaí he remembered very clearly how eager Revenue was to get a compensation cheque from the bank and wasn’t really inter- ested in finding out about individual account holders.

‘One phrase I remember from the meeting was [a Revenue official stating] “We want a cheque”. He subsequently did get a cheque for €3million and [Revenue] expressed themselves very satisfied with the audit,’ Mr Daly’s statements to gardaí reveal.

Mr Daly, who volunteered to be interviewed by fraud squad officers in October 2013. told gardaí: ‘Anglo took this quite seriously. Anglo, at that time, was riding the crest of a wave and this was a reputational issue.’

He recalled to gardaí: ‘The Revenue audit team weren’t all that interested in individuals, more interested in getting the cheque.’

Mr Daly was put on trial for his role in the collapse of Anglo but his conviction was later overturned and he had no part in David Drumm’s fraud.

Revenue was contacted about its Anglo probe but said it cannot comment on individual cases.

‘A reputational issue’