Ex-Irish Bankers Start Trial on Conspiracy to Defraud in 2008

Four former bankers conspired to defraud Anglo Irish Bank Corp. customers and investors during the financial crisis in 2008 by boosting the bank’s reported reserves in a “manifestly dishonest” way, prosecutors said at a criminal trial in Dublin Wednesday.

Former executives at the now-defunct bank, Willie McAteer and John Bowe, and one-time directors of Irish Life & Permanent Plc, Denis Casey and Peter Fitzpatrick, have pleaded not guilty to charges they created the impression Anglo Irish’s customer deposits were 7.2 billion euros ($7.9 billion) higher than they actually were in September 2008. Prosecutors claim the bankers conspired through a series of transactions between both companies to deceive depositors and investors about Anglo Irish’s financial health.

Willie McAteer arrives at court in Dublin, on Wednesday, Jan. 20.

Photographer: Aidan Crawley/Bloomberg

Anglo Irish “had huge difficulties in getting money from anyone, bank or non-bank, to keep it going,” prosecutor Paul O’Higgins told the 15 jurors at the start of the trial. The circular deposits, routed by Anglo Irish through a life assurance unit of IL&P and back to the ailing bank, disguised the fact that the bank’s customer deposits were actually “falling at a rate that was likely to alarm those looking at Anglo,” he said.

Anglo Irish was renamed Irish Bank Resolution Corp. in 2011 and put into liquidation two years later, after costing taxpayers 29.3 billion euros to rescue as its bad loans soared. Irish Life & Permanent was seized by the state in 2011, its life assurance division was sold to Canada’s Great-West Lifeco Inc. in 2013 and the remaining group renamed Permanent TSB Group Holdings Plc.

The fact that IL&P’s deposits in Anglo Irish were backed by cash collateral meant that there was no commercial sense to the transactions, other than to present a falser picture of Anglo Irish’s finances, according to O’Higgins.

The trial is scheduled to last 20 weeks.

The case is the Director of Public Prosecutions vs Bowe, Fitzpatrick, McAteer and Casey, DUDP0529/2014, in the Dublin Circuit Criminal Court.

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