Ex-banker jailed for stealing €2.7m by issuing bogus loans
AIB customers were led to believe their funds were being invested
A FORMER bank manager has been jailed for two years for stealing €2.7million from his employer after creating fictitious loan accounts for customers when their own legitimate applications were delayed or refused.
Patrick Challoner, 54, funded these bogus loans by taking money from other customers who believed they were authorising Challoner to set up an investment fund for them.
These customers gave Challoner authorisation to take money from their accounts for the purpose of investment – but the cash was never invested.
Dublin Circuit Criminal Court heard it was effectively a scheme that lasted 16 years and involved Challoner transferring funds from one customer account to another in order to ‘fill the holes’ of the various accounts.
Sentencing yesterday, Judge Elma Sheahan noted that the investigating garda said this would have been a difficult case to prove were it not for the co-operation of the defendant. She said the defendant had expressed genuine remorse for his actions and noted that he has repaid €60,000.
She sentenced Challoner to three years in prison and suspended the final 12 months for two years.
Challoner of Chanel Road, Artane, Dublin 5, pleaded guilty to five sample charges of theft from Allied Irish Bank, Artane branch, on dates between August 2002 and February 2011 and one charge of deception, in that he fraudulently induced a named person to authorise a transfer of €300,000 from their bank account on December 2, 2016.
The charges were representative of over 100 charges and the court heard that there were thousands of transactions involved.
The bank was at a total loss of €3.2million, which included reimbursing the affected customers and the cost of an external audit.
Detective Garda Gareth Lynch told prosecuting counsel Brian Storan that Challoner told gardaí during interviews that the whole situation started when he found that, due to other work pressures, he had not progressed a mortgage application for a customer’s ‘dream house’ as efficiently as he should have.
The customer then became concerned that they would lose the property so Challoner took money from the account of another customer and effectively gave the prospective home buyer what they believed was a bridging loan. He then set up a bogus loan account without any supporting documentation.
Det Gda Lynch said the fact that the loan had no supporting documentation meant that the bank then had no way to enforce the payment of the money.
He explained that one way Challoner funded these accounts was by getting other customers to place funds into a non-existent investment account.
When these customers came back looking to withdraw cash from these investment funds, Challoner often used his own money to pay them back.
Det Gda Lynch said Challoner also used this scheme to provide loans to businesses that found themselves in financial difficulty.
If people later couldn’t repay the funds or refused to do so, there was no way they could be forced to repay the money as there was no supporting documentation. This then left holes in the accounts of the people who believed they had invested money.
The court was also told that married father of two Challoner did not benefit financially from the scheme himself.
He resigned from AIB following an internal investigation in 2018 and has been working as a pizza delivery man since then.
‘He did not benefit financially himself’