Business Irish

Saturday 25 February 2017

Anglo's Austrian banking arm in mob-cash probe

Alleged €2bn of laundering through tech leases

Nick Webb and  Shane Ross

Anglo Irish Bank Photo: Bloomberg News
Anglo Irish Bank Photo: Bloomberg News

ANGLO Irish Bank was allegedly used in a €2bn cross-border Mafia money-laundering racket. The State-owned bank's Austrian private banking operation -- which it sold in 2008 -- is one of three banks central to the probe in Italy and Austria, where accounts have been frozen.

Documents from the Italian public prosecutor's office indicate that more than €2bn was moved from a telecoms firm in Italy to 12 bank accounts in Vienna in Anglo Irish Bank (Austria), Raiffesien and Bank Austria Credinstalt between 2005 to 2007.

Anglo Irish Bank sold its Austrian operations to Valartis in 2008.

The prosecutors have highlighted suspicious transactions between at least two offshore companies -- Broker Management SA and Karelia Business Group SA. Both of these companies had bank accounts at Anglo Irish Bank (Austria). "The alleged money laundering was conducted by a company purporting to lease bundled broadband services that they said they had bought from a number of suppliers," according to sources.

The bank became concerned about the company's bona fides for a number of reasons -- including significant turnover, large transaction sizes and behaviour untypical of the normal private-banking customer serviced in Austria, according to sources. The clients were told to close the accounts, which were subsequently transferred to Bank Austria.

Anglo commissioned an investigation by a London-based forensic investigation company and reported its suspicions to the Austrian financial watchdog, BKA.

Last year, the Sunday Independent revealed how jailed financier Bernie Madoff had funnelled investor funds through Anglo Irish Bank to fund his extravagant lifestyle.

Meanwhile, the government has decided that the harm done to Anglo by the continuous drip of bad news will necessitate a new branding for the bank. Thursday's appointment of former minister Alan Dukes to the chair, and the parallel announcement of the departure of current chairman Donal O'Connor -- the last remaining director from the old regime -- begins that process.

The clean-out of the former directors and all associates of Sean FitzPatrick means there are at least three vacancies, all to be filled shortly by Finance Minister Brian Lenihan. He is expected to appoint people independent of links to Ireland's disgraced bankers. But department sources are insisting that the next step will be the renaming of the bank.

Anglo insiders are saying the bank will not be wound down but that it will diversify, once the strategic plan has been approved by Europe.

Currently, they are looking at the possibilities of branching out into the green-energy area and expanding in the small business space.

Sunday Independent

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