Tag Archives: Anglo Irish Bank

A real-time analysis.

Ireland-born, Chicago-based medical doctor Joseph Sheehan conducts a ‘biopsy’ of a loan from Anglo Irish Bank taken out in 2006 and “still in existence”.

‘Mark Felt’ writes:

Interesting analysis of the Irish Banking crisis & powerful argument on the separation of loans from assets by the Central Bank. Will cause some chaos if correct! Comments?

Anyone?

Meanwhile

Former chairman of Anglo Irish Bank Sean Fitzpatrick

Go about your business.

Simon Carswell, in The Irish Times, reports:

The full reasons why the trial of former Anglo Irish Bank chairman Seán FitzPatrick collapsed may never be made public after a State watchdog decided to withhold a lengthy report on the case.

Director of Corporate Enforcement Ian Drennan has withdrawn his offer to provide a 415-page report on the case to an Oireachtas committee because it could not give him guarantees he wanted to legally protect him and his office from “litigation risk and associated financial exposure”

Good times.

Full report on Anglo trial collapse may never be made public (Simon Carswell, The Irish Times)

Pic: Rollingnews

This morning.

Central Criminal Courts, Dublin.

Former Anglo Irish Bank Chief Executive David Drumm on his way into the Criminal Courts of justice for his sentencing today after he was found guilty on two counts of fraud.

Previously: He Fiddled The Moolah

Sam Boal/RollingNews

Update:

Drumm Sentenced To Six Years For Fraud (RTÉ)

This morning.

Central Criminal Court, Dublin.

David Drumm and his legal phalanx team arrive ahead of jury selection for his trial on various charges relating to his time as Anglo Irish Bank chief executive.

These include giving the markets the impression that Anglo’s deposits were €7.2bn greater than they actually were.

Mr Drumm, 51, from Skerries in Co Dublin, has pleaded not guilty.

The trial is “expected to hear from almost 100 witnesses and could last up to five months”.

Gulp.

Former Anglo CEO David Drumm in not guilty plea (RTÉ)

Rollingnews

This afternoon.

In the Dáil.

TDs made statements on the Office of the Director of Corporate Enforcement, received by Fine Gael’s Minister for Jobs, Enterprise and Innovation Mary Mitchell O’Connor.

It followed the acquittal of former chairman of Anglo Irish Bank Sean Fitzpatrick earlier this week, after lead investigator from the ODCE shredded documents which were relevant to the investigation.

Sinn Féin TD Pearse Doherty said:

“The first thing I think we need to say, in relation to this debate, is that Ireland doesn’t do prosecution of white collar crime and it’s not just this collapse of this trial or the acquittal of Seanie Fitzpatrick, but it’s, for decades now, we’ve seen that thread.

“We’ve seen the underfunding of resources, of agencies that are supposed to be tackling white collar crime, we see staff resources being cut and we see our legislative framework, that should underpin a strong, robust anti-corruption and white collar crime agenda, simply not there.

“My colleague spoke about the request, when the ODCE was established in 2001, and it was established as a result of the tribunals of investigation, the massive corruption that we’ve seen in those tribunals, tribunals that span three decades, yet only one conviction because of corruption.

“Despite the fact that we know that politicians were up to their neck in it, in relation to brown envelopes. Despite the fact that we know that people had benefitted, in terms of their own lifestyle as a result of backhanders given to people in influential places but CAB didn’t go in and seize the assets at that time, because there’s one rule for certain individuals and another rule for others.

“But when it was established in 2001, within a number of years, the director was requesting resources. The director wrote to Micheál Martin, who was the line minister at that time in 2005, and continued to write to him over a period of time, telling him that the Office of the Director of Corporate Enforcement was wholly inadequately resourced.

“Minister Martin at the time refused the request and at a time when tens of thousands of additional public sector workers were bing recruited, not an additional staff member was given to the Office of Director of Corporate Enforcement.

“Bertie Ahern, sitting for years where you’re sitting today, and said that they needed to wait their turn. And, at the same time, at the same time, Seanie Fitzpatrick and his ilk were setting in train the economic disaster that people the length and breath of this country had to endure over the last ten years. And that is a symbol of how this country deals with white collar crime. Continue reading

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From top: Former Anglo Irish Bank executive Willie McAteer; former chief executive of Irish Life and Permanent, Denis Casey; and former Anglo Irish Bank executive John Bowe on their way into the Circuit Criminal Court in Dublin this morning

Judge Martin Nolan sentenced three former bank executives at Dublin Circuit Criminal Court this morning for their part in a €7.2bn conspiracy.

Former Anglo Irish Bank executive John Bowe was sentenced to two years; former Anglo Irish Bank executive Willie McAteer was sentenced to three and a half years; and the former chief executive of Irish Life and Permanent, Denis Casey, was sentenced to two years and nine months.

The three men were found guilty last month of conspiring together and with others to make Anglo Irish Bank’s balance look like it had €7.2 billion more than it had – in order to mislead investors.

Orla O’Donnell, on RTÉ’s Today with Seán O’Rourke, reported on this morning’s sentencing.

She said:

He [Judge Martin Nolan] said this was a very serious conspiracy, a conspiracy on the public, on anyone who was looking at these accounts. He said people were entitled to rely on these accounts. He said he believed the starting point for prison sentences was eight years in this case.”

“Now he did say there was a lot of very good mitigation put forward, on behalf of the men. He spoke about the fact that this took place in the context of a dysfunctional financial market, the men didn’t gain any direct profit from their crime, they were acting in the best interest of their companies… they had very good mitigation in terms of people giving character references for them.”

“They were family men. They had all endured a lot of stress, a lot of criticism from the public since these events had happened. But, at the same time he said, that this was a very serious offence and he had to impose a prison sentence.”

Meanwhile…

Three former bank executives sentenced over €7.2bn conspiracy (RTE)

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From top: Anglo Irish Bank HQ, The proposed Chicago spire, Blackrock Clinic and Peter Mathews TD

Anglo/IBRC.

It was not a good bank

It was a very, very bad bank.

Peter Mathews’ complex contribution yesterday to the Commission of Investigation into certain IBRC transactions included a number of fresh allegations about overcharging at Anglo Irish Bank/IBRC and revelations about the purchase of Blackrock Clinic loans.

Economist Constantin Gurdiev translates below.

I want to talk about how the so-called profits of IBRC were inflated for a period starting in 1993 and travelling forward to the present date.

There were two ways this was done.

First was the direct manipulation of interest charges and the concealment of loaded interest, which happened in the majority of cases. An extensive exercise carried out by Bank Check revealed this.

It was an excellent exercise and gives the key facts as follows: there were 113 variable DIBOR and EURIBOR loans and 17 LIBOR-based transactions. Some 494 separate DIBOR-EURIBOR rates were reconciled and found to be loaded to a degree ranging from 0.5% in the early 1990s to between 0.03% and 0.05% in 2002 and 2003.

Some 80% of all the loans examined, relating to many clients, were found to have this loading. The statements which clients received never showed the breakdown of the base rate and the DIBOR 3-month rate plus a margin, which had been agreed by loan agreements, plus the reserve asset cost, RAC, if and when it applied.

The quantum of the loaded overcharging was in the order of 0.3%. A margin of 1.5% would comprise two elements, namely, the amount that goes to cover overheads, which is usually about 0.9% of the 1.5%, and the remainder, 0.6%, which is the profit of the bank.

A loaded secret dark pool profit of 0.3% would represent one third of the overall profits, including that dark pool profit.

That means the market valuation of Anglo Irish Bank in the 14 years up to 2002 when this was going on was overstated by one third. If it had been discovered by proper auditing the market would react with a collapse, like the St. Valentine’s Day massacre, of at least one third of the value of the bank and this would affect the shareholders, creditors and depositors.

That would happen irrespective of whether there was an international credit bust and a freeze of credit. This has been brought to the attention of the NTMA, NAMA and others but it has been ignored to date. I have the evidence here and it is shocking.

There is a superbly authoritative letter about the second element of the overcharge by Anglo Irish Bank, now IBRC. Interest was charged for 365 days across the board, when it should have been 360 days.

In the case of IBRC v. John Morrissey, this was the decision of Ms Justice Mary Finlay Geoghegan. It has been brought to the attention of the bank, which has been asked to explain what has been done about this in relation to other clients, but it has been ignored.

The terms of reference which the Government has outlined for the investigation cover the period from 2009 to 2013, which is absurd. I am ashamed that this is the case as it excludes the professional conduct of the special liquidators.

I have other examples of where clients of what was Anglo Irish Bank and is now IBRC are being mauled while special preferential treatment has been given to certain bidders on loans.

I cite the Blackrock Clinic in this respect, which is now the subject of open court proceedings. I have the court depositions and it appears from the evidence that the senior accounting advisers of Larry Goodman are former KPMG partners and very close to the special liquidators at KPMG, Mr. Richardson and Mr. Wallace.

It appears there was preferential treatment in the bidding for some of the loans of the investors in the Blackrock Clinic. This should also be investigated as there is too much darkness and too much selective, narrow stuff.

On the day after the six-month stay on involvement in any property transactions relating to NAMA loan assets, the chief loans manager of NAMA, Mr. John Mulcahy, joined the advisory team of Denis O’Brien.

KPMG were the auditors of Irish Nationwide Building Society, which had a balance sheet of €14 billion. They made losses of €6 billion which were put on the backs of the Irish people. That is wrong.

In conclusion] This is from Black solicitors, following the John Morrissey case:

‘It appears numerous illegalities have been carried out by Anglo Irish Bank and its successors over these 25 years. You, Mr. [Kieran] Wallace, have acknowledged under oath in US Court proceedings the overcharging of interest by the bank. As the overcharging has continued under your watch, you are jointly and severally liable for same, together with the Minister and Department of Finance, the Central Bank of Ireland and the Financial Regulator.’

This is really serious stuff. No response has been received to letters that issued to NAMA on 7 January 2015, to the Central Bank on 22 January 2015, to the Minister for Finance on 3 March 2015, and to the Central Bank on 9 March 2015.

We are now in June. This is serious stuff. There are loans that are being operationally processed by the originators of those loans. Now those loans are owned by third parties, including hedge funds, and they are calculating interest on an unlawful basis, even though it has been brought to their attention. This is shocking.

There is other evidence that NAMA knowingly… allowed the information memorandum for the Chicago Spire to be negligently misleading, which has resulted in unnecessary huge losses for both the Irish people and the developer. I have the evidence for that….”

Thud.

Transcript via Oireachtas.ie

Economist Constantin Gurdgiev explains:

These are mind-blowing revelations that expose more than just a systemic fraud [potentially] being perpetrated by a rogue bank. These are the revelations that show the current system wanting in respect of acting on the established legal case judgement in addressing the systemic [potential] fraud.

And the worst bit is that even that is a tip of an iceberg, for Deputy Mathews statement about potential misrepresentation of the Chicago Spire case by Nama opens up the EUR77 billion can of worms over the Grand Canal. In this context, the current planned inquiry into 2009-2013 IBRC dealings is nothing more than a fig leaf of fake decorum on a rotten corpse of the Irish Solution to an Irish Crisis.

A Bombshell Goes Off on Anglo, IBRC & Nama (TrueEconomics)

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More as they get it.

UPDATE: