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Former Bankers Jailed

AUTHOR(S): Carina Lawlor, Michael Byrne
PRACTICE AREA GROUP: Commercial Litigation and Dispute Resolution, Regulatory and Investigations
DATE: 24.10.2016

In this article, we examine the longest criminal trial in Irish legal history resulting in arguably the most significant white collar crime convictions ever in Ireland.

In June 2016, three former senior bank executives, Willie McAteer, John Bowe and Denis Casey, were found guilty of conspiring to mislead investors.The trial lasted 89 days and the jury deliberated for a total of 65 hours in reaching verdicts in respect of each of the men on trial. Each of the defendants pleaded not guilty to the charges. Sentences were recently handed down and Judge Nolan imposed sentences ranging from two to four years imprisonment on each of the three men subject to the proceedings. Judge Nolan imposed varying sentences to reflect the extent of the involvement of each of the men in the “dishonest, deceitful and corrupt” scheme allegedly designed to make Anglo Irish Bank’s finances look stronger than they were in reality.

The proceedings against the bank executives related to a circular transaction scheme worth €7.2 billion conducted between March and September 2008. This scheme was allegedly created to bolster Anglo’s balance sheet in 2008 as part of Anglo’s customer deposit figures, which were in decline due to the pending economic crash. The scheme was allegedly designed so that the deposits came from the assurance company and would be treated as customer deposits. This scheme allegedly enabled the bank to disguise heavy losses in customer deposit accounts. In a series of transactions, massive sums were placed with Irish Life and Permanent (“IL&P”) and returned to Anglo, by means of a non-banking subsidiary, as customer deposits. IL&P was, at the time, a large listed company and one of the biggest financial players in Ireland.

Willie McAteer and John Bowe were senior executives in the former Anglo (now IBRC). Willie McAteer was Finance Director and John Bowe was Head of Capital Markets. Denis Casey was the Group Chief Executive of IL&P. Judge Martin Nolan strongly criticised the men for their actions and in particular, their failure to fulfil their duty to uphold the integrity of the nation’s banks. He said that what had been allowed to take place was “grossly reprehensible” and a huge error of judgement. Their actions also demonstrated, he said, utmost disrespect for the letter of the law.

Mr McAteer was given a sentence of three and a half years for his involvement and a two year term of imprisonment was imposed on Mr Bowe. Mr Casey received a sentence of two years and nine months. The judge said that he imposed a lesser sentence on Mr Bowe as he was a “lesser functionary” and not a board member. Nonetheless, Judge Nolan indicated that he felt compelled to impose sentences on all three men in light of the seriousness of the crimes.

Mr McAteer was previously convicted for his involvement in the “Maple Ten” transaction. That transaction was held to contravene section 60 of the Companies Act 1963 and he was sentenced to community service. Mr Bowe and Mr Casey had no previous convictions. All three are to appeal both their sentences and convictions.

The trial is to be followed by a series of similarly complex trials involving other former senior executives of Anglo, most notably Sean Fitzpatrick (former Chairman) and David Drumm (former Chief Executive).

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