Case is nowl ongest running criminal trial in State history
WEDNESDAY
A FORMER auditor of Anglo Irish Bank said on Wednesday that he was not aware at the time of the audits of documents which suggested that multi-million euro loans linked to Sean FitzPatrick were temporarily refinanced.
The trial at Dublin Circuit Criminal Court previously heard that loans taken out by Mr FitzPatrick (68), his wife and family members increased from about €10 million in 2002 to about €100 million in 2007.
It is the State’s case that these loans were ‘artificially reduced’ for a period of two weeks around the bank’s financial end of year statement by short-term loans from other sources, including Irish Nationwide Building Society (INBS).
Dominic McGinn SC, prosecuting, previously told the jury that the prosecution was about the alleged failure by the bank’s former chairman to disclose the extent of these loans to the bank’s auditors in the years 2002 to 2007.
Mr FitzPatrick has denied all charges.
On day 85 of the trial Vincent Bergin, who is a partner with audit firm EY (previously Ernst & Young) and who led the audit of Anglo for the years 2005 to 2008, continued his evidence.
Mr McGinn showed the witness documentation of deposit accounts, loan facilities and loan accounts in the name of the accused and his wife Triona FitzPatrick for the years 2005, 2006 and 2007.
They included letters from INBS offering loans for cash amounts in Euro, Sterling and US Dollars.
These letters stated that the purpose of the loans was to refinance existing arrangements with Anglo.
The jury saw that by September 2007 INBS was confirming short term loans to Mr FitzPatrick and his wife involving tranches of more than €62m, $56m and UK£14m. In Anglo’s accounts in the same year the total amount of loans to all directors of the bank was noted as being almost €41m.
Mr Bergin said he was not aware of any of these documents or financial transactions while he was in charge of the audits.
Mr McGinn asked him to comment on how the documentation would have affected the audit process.
‘I think we would have asked follow up questions as to what exactly was happening,’ Mr Bergin said. He said from the documentation it appeared to him that the accused was seeking short-term loan facilities in order to refinance borrowings from Anglo.
He said he thought this would have been relevant to the audit.
‘I think if someone was utilising loan facilities like that to pay down something with the intention of drawing it down again, I think that’s relevant to the audit,’ Mr Bergin said.
Counsel told the witness that it was a matter for the jury to find if there was a system of refinancing the loans but asked him to consider what he would have done if he had been aware of the documents.
Mr Bergin agreed that he would have considered various options, such as consulting with colleagues, discussing it with the bank’s audit committee or the potential need to report to the Central Bank or the Office of the Director of Corporate Enforcement.
He agreed it was difficult in hindsight to say how it would have been resolved and that it would have depended on the facts and circumstances at the time.
Mr Bergin also agreed that if the Directors Certificates or Letters of Representations provided by the directors to the audit team had disclosed refinancing this ‘would not have passed without consideration’.
He said he would have had to consider many complex legal, accounting and governance issues and he would have raised it in his audit report. He agreed that ‘various steps would have been considered up to and including resigning as auditors’.
Mr FitzPatrick of Whitshed Road, Greystones, has pleaded not guilty to 27 offences under the 1990 Companies Act. These include 22 charges of making a misleading, false or deceptive statement to auditors and five charges of furnishing false information in the years 2002 to 2007.
THURSDAY
A former auditor of Anglo Irish Bank told the trial of Sean FitzPatrick that he was prepared to give the ‘unvarnished truth’ even if it was contrary to the interest of the audit firm he works for.
On day 86 of the trial at Dublin Circuit Criminal Court, Bernard Condon SC, defending, began his cross-examination of the prosecution witness Vincent Bergin.
At 12.30 p.m, after just under two hours of questioning, Judge John Aylmer interrupted Mr Condon to indicate that he could see that one juror was ‘struggling’. Judge Aylmer suggested an early lunch break.
The case was later adjourned to Friday to deal with a legal matter.
Before this, Mr Condon asked the witness if he be prepared to say something in evidence that might be contrary to the firm’s interests.
Mr Bergin replied: ‘If it’s the truth, yes’. He said he had sworn an oath and would abide by that.
Mr Condon told Mr Bergin that he was the walking embodiment of EY for the jury. Mr Bergin said he would ‘probably’ say that he didn’t see himself as giving evidence as a representative of the firm.
‘Personally I’m never sure. I’m the person who led the audit but the firm was the auditor. A person has to give evidence so I’m giving evidence,’ he said.
He told counsel that he would be prepared to say ‘we didn’t do that exactly right, we could have done better’ if that was the case.
He said he was aware that what he might say in evidence in this trial might have consequences for the firm, for Mr FitzPatrick and for him.
The jury heard that in 2012 Anglo Irish Bank, by then renamed IBRC, began litigation against EY and that EY was also the subject of proceedings with CARB, the Chartered Accountants Regulatory Board.
Mr Condon asked the witness about the ‘unorthodox and illegal’ process by which investigators from the Office of the Director of Corporate Enforcement (ODCE) took a statement from him in 2010.
Mr Bergin agreed that solicitors from A&L Goodbody, the law firm representing EY, were involved in producing the statement along with ODCE investigators.
‘ The problem here is we don’t have the unvarnished Vincent Bergin view because everybody else has been sticking their nose in,’ counsel said.
Mr Bergin said he was here in court ‘ to give the unvarnished truth’.
Counsel replied: ‘Well you’re not really because you’ve read your statement’.
Mr Bergin said he had looked very carefully at his witness statement and would not have signed it off as his statement if he didn’t agree with all of it.
The jury heard that during the first trial in May 2015 Mr Bergin testified that it was his position that he would have sat down with investigators from the ODCE without having his solicitors present if he had been asked.
Mr Bergin said on Thursday that this was still his position.
Earlier in this trial the lead investigator Kevin O’Connell said that such a meeting never happened. He said that the ODCE never asked Mr Bergin to meet them without his lawyers and said he didn’t think Mr Bergin would have done so.
Mr Bergin said he had read this testimony in the press and ‘was very surprised’.
‘I don’t think he has any basis for that statement. I stand by what I said,’ he said.
Mr Bergin said he was not aware that drafts of his statement had gone between the ODCE and A&L Goodbody or that meetings took place between the two.
TUESDAY
The trial of former Anglo Irish Bank chairman Sean FitzPatrick yesterday became the longest-running criminal trial in the history of the State.
Yesterday the trial at Dublin Circuit Criminal Court entered its 90th day, making it longer than any other criminal trial ever.
The trial began last September and was due to end by Christmas but was delayed by weeks of legal argument over certain issues.
Last week Judge John Aylmer told the jurors that they should not be embarrassed if they felt tired and needed a break. He told them that the evidence during the trial was at times ‘ tedious’.
Yesterday Bernard Condon SC, defending, finished his cross-examination of Vincent Bergin, a partner with audit firm EY (previously Ernst & Young) who led the audit of Anglo for the years 2005 to 2008.
Mr Condon told the jury that the statement of Mr Bergin was produced by a process of coaching and ‘cross-contamination’ using processes ruled by the court as ‘unlawful’.
Judge Aylmer told the jury that a legal issue had arisen and that it would take nearly two weeks to deal with. He asked the jury to return to court for March 13 to continue hearing evidence.
He also told them that it was no longer the case that the trial would finish by the end of March, as the jury had been previously told. He said it is now estimated the trial will run into April.
The jury forewoman told the judge that members of the jury had commitments and holidays booked from April 3 to April 24.
Mr FitzPatrick of Whitshed Road, Greystones, Co Wicklow has pleaded not guilty to 27 offences under the 1990 Companies Act. These include 22 charges of making a misleading, false or deceptive statement to auditors and five charges of furnishing false information in the years 2002 to 2007. The trial continues.