Courts

Monday 28 July 2014

Fraud squad awaiting bankruptcy verdict on David Drumm

Maeve Sheehan

Published 08/06/2014|02:30

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Former  Anglo Irish Bank CEO David Drumm and his wife Lorraine arrive at the US Bankruptcy Court in Boston.
Former Anglo Irish Bank CEO David Drumm and his wife Lorraine arrive at the US Bankruptcy Court in Boston.

THE Garda fraud squad will delay attempts to extradite former Anglo Irish boss David Drumm until an American court has ruled on his bankruptcy claim.

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Detectives plan to extradite Mr Drumm in connection with a €7.2bn transfer to allegedly bolster the toxic bank's falling share price.

Sources said the extradition plans are "advanced", but garda authorities want a "clear run" before making any move to bring him back to Ireland to face charges.

Mr Drumm has been embroiled in legal proceedings in the US after Anglo, now IBRC, challenged his attempt to go bankrupt.

His six-day bankruptcy hearing ended on Thursday but the court won't give its verdict until later this summer.

In closing statements last week, IBRC claimed that it would be "manifestly unjust" to allow him walk free from debts of €10.5m.

Mr Drumm was accused of repeated acts of concealment, of making false oaths and failing to disclose transfers of cash and property worth €2m to his wife, Lorraine.

The court heard how Mr Drumm blamed his advisors for "mistakes" in his bankruptcy application.

However, lawyers for IBRC pointed to Mr Drumm's "level of disdain, unquestionable recklessness and indifference to the rules".

Mr Drumm's lawyers, for their part, claimed that IBRC'S case against its former chief executive was "nothing but a witch hunt". Mr Drumm and his advisors had made "honest mistakes" in not disclosing the asset transfers. IBRC had "thrown the kitchen sink" at him in trying to "portray him as a serial liar".

Mr Drumm's wife Lorraine also testified at the hearing and accompanied him to court most days.

The judge, Frank Bailey, last week invited both sides to make submissions and said he will give his verdict later this summer.

If the verdict goes against him, Mr Drumm could find himself repaying debts of around €8.5m to IBRC and €2m to other creditors.

Mr Drumm has been working in the US as a consultant since he left Ireland in 2008. He was in contact with the Garda fraud squad via email and through his solicitor after detectives started their investigation into the bank in 2009. But he resisted requests to return for questioning as part of the investigation.

Mr Drumm must be charged with an offence here before the Irish authorities can apply to extradite him from the US.

Informed sources said that gardai have recommended a number of fraud charges to the Director of Public Prosecutions.

They include the €7.2bn back-to-back loan from Irish Life and Permanent to the former Anglo Irish Bank at a time when its share price was crashing. Three bankers have already been charged with conspiracy to defraud the public in connection with the €7.2bn transfer.

The charge of conspiracy to defraud is also an offence in the United States, which is one of the conditions that must be satisfied before the American courts will agree to extradite a suspect.

If the DPP directs that Mr Drumm be charged, gardai will apply for an extradition warrant that will be processed through the US courts.

Mr Drumm is expected to vigorously fight any attempt to return him to Ireland.

Sunday Independent

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