Drumm denies multi-billion euro fraud transfers
FORMER Anglo boss David Drumm has denied arranging fraudulent multi-billion euro transfers to boost the lender’s books before it went bust, a court heard yesterday.
He is charged with conspiracy to defraud and false accounting relating to €7.2billion being moved between Anglo and the Irish Life and Permanent and Irish Life Assurance in 2008. Mr Drumm has pleaded not guilty. On day one of the trial the ex-banker’s lawyers told the court he does not deny the money was moved.
Defence barrister Tessa White said: “David Drumm accepts all of the factual matters relating to the mechanics of how the September transactions happened,
“The only issue he disputes is whether they were fraudulent or dishonest or that there was any dishonesty in their reporting.”
In a series of admissions on Mr Drumm’s behalf, Ms White detailed a series of transfers between Anglo and IL&P and ILA as the global financial crisis struck in 2008.
In March Anglo placed €1billion with IL&P and ILA deposited €750million in return.
In June that year IL&P moved bonds worth more than €3billion to Anglo. In return the bank deposited €3billion.
In September Anglo moved €7.2billion to IL&P. In return IL&P moved the same amount back to Anglo on behalf of ILA.
All the monies were repaid within weeks of each transaction.
The aims were to increase Anglo’s non-bank deposits and to reduce IL&P’S reliance on European Central Bank funding.
More transactions had been planned for December but they were never completed.
Ms White told the court: “David Drumm as chief executive officer authorised the March, June, September and December transactions and assumes responsibility for their execution by Anglo.”
Judge Karen O’connor told the jury of 10 men and five women the admissions would considerably reduce the length of the trial which could run for months. Earlier Senior Counsel for the State Paul O’higgins told Dublin Circuit Criminal Court Mr Drumm had arranged the €7.2billion September transfer.
He said: “This was a completely artificial process leading to a dressing up, a more than dressing up, a falsification of Anglo Irish Bank’s balance sheet so that its non-bank deposits were €7.2billion bigger than they really were.”
The jury was told it will hear tape-recorded phone calls from Anglo’s treasury department, including calls about the multibillion-euro transfers.
Mr O’higgins said the money was moved at “lightning speed” and the prime objective was to “dishonestly create the false impression” at Anglo’s year end in 2008 that its non-bank deposits were in the 50 billions. That ultimately happened.”
He added: “Mr Drumm was, the prosecution says, the man who called the shots. As CEO he was effectively in charge of the operation.”
Drumm, who is living in Skerries, Co Dublin, is on bail. He was Anglo chief executive from January 2005 until December 2008. He left Ireland for Boston in 2009 after the lender collapsed.