Drumm ‘could spend rest of his life in prison’
But ex-Anglo chief’s lawyer claims extradition bid is ‘political’ move
DISGRACED banker David Drumm could face an ‘ unlimited term of imprisonment’ over allegations that he helped bring down Anglo Irish Bank, it emerged last night.
His lawyer claimed in court that his extradition from the US to Ireland could be being ‘done for a political purpose’.
Attorney Tracy Miner said that the former Anglo chief’s case was going to be ‘a little bit more complicated’ than normal because of what she called ‘other considerations’.
She suggested that Drumm had been arrested for political reasons as he appeared for the first time in a Boston court since his arrest on Saturday night.
Documents revealed as part of the extradition hearing showed that Drumm is accused of 33 counts ranging from forgery to falsification of a document and filing misleading documents. Separate warrants were issued for each charge.
The offences carry sentences ranging from a maximum of five years to an unlimited prison term, meaning Drumm could potentially spend the rest of his life behind bars for conspiracy to commit fraud.
Case ‘more complicated than normal’
This the first time that the allegations against him have been laid out in court and mark the start of the process to extradite him to Ireland, which he is resisting.
In 2009, after Anglo collapsed, Drumm, 48, moved to the US and refused to return home to explain himself.
He tried to declare bankruptcy there to avoid debt of €10.5million here, most of which was a loan from Anglo. But he failed and was accused in court by Anglo’s liquidators of secretly transferring money and assets to his wife Lorraine to avoid them being seized.
Ahead of last night’s hearing the US Attorney i n Massachusetts unsealed the 12- page criminal complaint against him. It details how Anglo, which Drumm ran between 2005 and 2008, became known as ‘the bank that broke Ireland’ after it collapsed and the State bailed it out at a cost of €30billion.
The bank’s failure was the catalyst for the collapse of the economy in 2008 and led to the €85billion bailout from the Troika.
The complaint details how Anglo got into difficulty when former billionaire Seán Quinn made a complex financial bet which amounted to 28 per cent of the Quinn Group’s worth.
Anglo realised this was too risky and so tried to wind it up.
In an effort to dilute the bank’s exposure due to the loans to Mr Quinn Anglo loaned a group of 10 wealthy investors – known as the ‘Maple 10’ – around €600m to buy Anglo shares. This was an alleged breach of financial rules.
Drumm is accused of failing to disclose the extent of Anglo’s exposure in the bank’s May 2008 financial report. He is also accused of lending money to the Quinn family despite knowing about their ‘weak financial position’.
Thirteen of the 33 charges relate to letters Drumm allegedly wrote to seven of the Maple 10 giving them much more favourable terms on their loan.
Prosecutors allege this amounted to ‘an interference with Anglo’s entitlement to recover the value of the loan’. They were written in October 2008 but backdated to July that year to give a ‘false impression of contemporaneity’, the complaint says.
The conspiracy to defraud and false accounting allegations relate to the transfer of deposits between Anglo and Irish Life & Permanent in 2008 that made the bank’s position appear healthier than it really was.
Last night’s hearing did not have the power to decide whether Drumm is guilty or innocent. Instead the extradition case will rule if there is ‘probable cause’ for charges to be brought against him.
It sits again on November 10 when the court will decide if there are corresponding charges in the US and if an extradition would be valid under a 1983 US-Ireland treaty.
Drumm’s lawyer Tracy Miner is renowned in the US for representing John Connolly Jr, the former FBI agent who was accused of helping Whitey Bulger cover up his crimes.
The Dublin banker has spent the past four years claiming that he should not be held liable for his €10.5million debt.
But in January Judge Frank Bailey ruled that he had told ‘outright lies’, made ‘ knowingly false statements’ and was ‘not remotely credible’.
Judge Bailey said: ‘Such conduct disqualifies a debtor from the privilege of discharge in our system of bankruptcy.’ The extradition application was made after this.
Drumm has lived comfortably in the US where he has a $2million home in a wealthy suburb of Boston. Despite his claims of being broke with $40,000 in credit card debt, his two daughters attend private schools and his wife has been seen driving a $47,000 Mercedes. He has been forced to sell some of the six homes he reportedly bought during his time in the US.
Claimed he should not be held liable