Saturday 22 October 2016

Misplaced loyalty of Anglo Three and elephant in room that is Seanie

Why would three people of ­impeccable character take part in a scheme to essentially spare Sean FitzPatrick's position?

Published 02/08/2015 | 02:30

REALITY HITS HOME: Former chief operating officer Tiarnan O’Mahoney (56)
REALITY HITS HOME: Former chief operating officer Tiarnan O’Mahoney (56)
Former company secretary Bernard Daly (67)
Former assistant manager Aoife Maguire (62)
Former Anglo Irish Bank chairman Sean FitzPatrick

The irony, a bitter one no doubt, can't have been lost on the three former Anglo Irish bankers jailed for conspiring to conceal or alter bank accounts (from the Revenue) connected to Anglo's former chairman Sean FitzPatrick.

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Last Friday in courtroom 19 at the Criminal Courts of Justice, Tiarnan O'Mahoney, Bernard Daly and Aoife Maguire - stunned after spending their first full night in custody - listened to their lawyers submit pleas in mitigation on their behalf.

The 'landmark' convictions turned on a scheme to protect Sean FitzPatrick, whom prosecutor Dominic McGinn Senior Counsel said was "the thread running through all the charges" but was nowhere to be seen - either as a witness or a defendant.

Senior Counsel Sean Guerin, representing Bernard Daly (a former company secretary at Anglo) implored trial judge Patrick McCartan to bear in mind that the case against Mr FitzPatrick - never charged in relation to the now proven fraudulent scheme - was stronger than the case against his client.

Mr Guerin, who became a household name after a searing report bearing his name helped to topple former Justice Minister Alan Shatter in the wake of a series of garda controversies - not to mention his role as lead prosecutor in the Graham Dwyer murder trial - honed in on the theme of impunity.

He asked Judge McCartan to "consider the impunity that Mr FitzPatrick has been fortunate enough to meet in these matters".

Unaccountably, said Mr Guerin, Sean FitzPatrick had not been prosecuted.

In his submissions on behalf of Tiarnan O'Mahoney, former chief operating officer at Anglo and - like Mr FitzPatrick - an ex-Titan of Irish banking, Senior Counsel Brendan Grehan said that the former Anglo chairman was the "prime mover".

Guerin and Grehan were elaborating on submissions the defence teams already colourfully tendered in their closing speeches.

In his closing speech to the jury, Mr Grehan said one of the most extraordinary features of the trial was that Mr FitzPatrick was not on the bench beside the three accused if, in fact, he was the chief orchestrator.

The prosecution said he was at the centre of the case and Mr Grehan said it was an irony everyone was talking about Sean FitzPatrick but he wasn't here. Mr FitzPatrick was like "the man in the grassy knoll," or "Macavity, the mystery cat" said Mr Grehan, adding, memorably, "his paws are all over it... but he's nowhere to be seen".

In his closing speech, Senior Counsel Patrick Gageby, representing Aoife Maguire - one of the most terrified accused people I've ever seen in a dock - likened Anglo to the sinking of the Titanic or the Costa Concordia, asking whether the captains or the subordinates were responsible for the sinking.

Mr Gageby said that "nobody upstairs left any fingerprints" suggesting Mr FitzPatrick was the captain of the stricken ship Anglo.

"I really don't suspect Mr FitzPatrick is going to burst through the doors of the court and say 'I'm really sorry, it was all done on my watch," mused Mr Gageby.

But Mr FitzPatrick did burst through court doors, in a manner of speaking, last week.

As the pleas in mitigation unfurled before Judge McCartan last Friday, lawyers for Mr FitzPatrick were on their feet nearby in another courtroom at the CCJ seeking to have forthcoming proceedings against him postponed from their start date next October.

Mr FitzPatrick's legal team sought the delay because the Anglo Three and the media coverage it has received - protected as it is by the privilege afforded to coverage of criminal trials - has caused a "cascade of sludge" to be visited on Mr FitzPatrick's head.

Back at courtroom 19, the Anglo Three were contemplating the volume and consistency of the sludge that has been visited on their own heads (albeit by their own hands) and the price they are now paying for what Judge McCartan described as 'misplaced loyalty' to Mr FitzPatrick.

When the sentence cascade came, it came heavy and hard.

Tiarnan O'Mahoney (56) was sentenced to three years for knowingly furnishing false information to Revenue, conspiring to have accounts deleted from the bank's core banking system and conspiring to defraud Revenue.

Bernard Daly (67) was sentenced to two years for furnishing false information and conspiring to delete accounts from the system and defraud.

Aoife Maguire (62) a former assistant manager at the bank, was sentenced to 18 months for conspiring to delete accounts and conspiring to defraud Revenue.

Not one portion of the sentences were suspended.

The price to be paid by the Anglo Three stretches beyond jail and reputation - it could also strain their finances.

Aoife Maguire qualified for legal aid, indicating the parlous state of her financial position.

O'Mahoney and Daly are covered by Anglo's Directors and Officer's Liability insurance policy. But the insurers may come after them for the legal costs of their eight-week trial now that they are convicted.

How did it come to this and what does it mean for Corporate Ireland and public confidence in the administration of justice?

The trial of the Anglo Three is laden with many ironies, including the fact that the first bankers to be jailed since the onset of the financial crisis were jailed for offences that took place long before it.

The scheme to hide accounts connected to Mr FitzPatrick have nothing directly to do with Anglo's obsession with its gambles on property and property developers.

But it has everything to do with Anglo's culture.

It was only when Anglo collapsed and a new team was investigating directors' loans that the scheme to protect accounts connected to Mr FitzPatrick were uncovered.

Unusual practices, such as evidence led in the Anglo Three trial that an account in the name of Sean FitzPatrick's brother-in-law John Peter O'Toole was used to trade stock during periods when bank directors were barred from trading, did not form part of any charges against any person in these proceedings.

But the unusual practices, Mr McGinn said there were large sums of money transferred in and out of the O'Toole account near the time of the bank's year end returns, affirm Judge McCartan's conclusion that what the new team uncovered reflected the workings of a very sick bank.

Judge McCartan observed that not one of the three had personally gained from what had been done in the wake of a 2003 audit of the bank by the Revenue Commissioners who were investigating accounts for any potential DIRT liability at that time.

If they made no personal gain, why did they do it? Misplaced ­loyalty only goes some way to explaining why three people of ­otherwise impeccable character would take part in a scheme to ­essentially spare their boss's position.

Did they do it to get ahead and advance their careers? Were any or all of them afraid of any career consequences if they didn't?

Some staff declined to take part in the scheme and were reassigned. I wonder, how do they feel about that now?

It is not too often the IT ­department steps out from the shadows. But in this case, the IT staff at Anglo deserve credit for refusing to delete accounts when requested, instead archiving them so that they remained on the system, even if they weren't immediately visible.

The prosecution may have placed Sean FitzPatrick at the centre of the scheme, even if they chose to leave him outside of the actual prosecution, but that does not excuse the actions of those who were convicted.

Jailing the three, Judge McCartan said these were deliberate offences at the higher end of the scale.

A significant, deliberate and well-designed fraud, Judge McCartan said the scheme was not rash and continued over time.

If the sentences appear harsh, it is because we have such low expectations of the capacity of our regulatory and criminal law structures to detect, investigate and prosecute white collar crime.

I've been staggered in my many years as a legal reporter at the range of civil sanctions, in every sense of that word, that directors and others have received for corporate malfeasance that resulted in actual losses to companies and the public.

Crime in the suites: every bit as damaging - sometimes more so - than crime in the streets.

It's only now that that reality is hitting home.

The Anglo Three convictions will no doubt be appealed and there may be very good grounds to do so.

The sentences perhaps less so as they are consistent with other sentences for frauds, including social welfare and revenue frauds, that have come before the courts in recent years.

The Anglo Three trial may, for a time, send out a strong deterrent message about white collar crime, but is only a landmark prosecution if it leads to actual change in our corporate culture.

Sunday Independent

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