Monday 19 August 2019

Drumm jailed for six years after €7.2bn plot to defraud

Judge brands actions ‘grossly reprehensible’

Former Anglo Irish CEO David Drumm leaves the Criminal Courts of Justice after a guilty verdict of Conspiracy to Defraud and False Accounting. Photo: Tony Gavin
Former Anglo Irish CEO David Drumm leaves the Criminal Courts of Justice after a guilty verdict of Conspiracy to Defraud and False Accounting. Photo: Tony Gavin
Andrew Phelan

Andrew Phelan

Anglo Irish Bank's disgraced former chief executive David Drumm has been jailed for six years for his part in a €7.2bn plot to defraud the markets during the 2008 financial crisis.

Drumm (51) sat in the dock and showed no emotion as the sentence was handed down by Judge Karen O'Connor at Dublin Circuit Criminal Court.

He was sentenced to six years in prison for both charges of conspiracy to defraud and false accounting, with credit given for five months spent in custody in the US prior to his extradition here.

Judge O'Connor said Drumm's behaviour had been "grossly reprehensible" and a motivation to keep Anglo open during the crisis did not provide "any excuse for fraud and dishonesty".

A jury found Drumm guilty of both charges by unanimous verdict two weeks ago, after a trial that lasted nearly five months.

He had pleaded not guilty to conspiring to defraud, by dishonestly creating the impression Anglo's customer deposits were €7.2bn larger than they really were in September 2008.

The case centred on a series of interbank deposits that circulated between Anglo and Irish Life and Permanent.

Drumm had also denied false accounting, by providing misleading information to the market in December 2008.

"This court is not sentencing Mr Drumm for causing the financial crisis," Judge O'Connor said, stressing that Drumm was being sentenced only for the specific charges.

He had held a position of trust and was part of a conspiracy that "potentially could have caused significant loss", she said, adding it was "premeditated and planned".

However, it was a mitigating factor that Drumm was of previous good character.

"Inaction, weakness and ineptitude on the part of the financial regulatory authorities provides no excuse for a scheme of this nature," the judge said.

While two of his co-conspirators, former Anglo executives Willie McAteer and John Bowe, were jailed for three and a half years and two years respectively, the judge said they were subordinates to Drumm, who "had a leadership role".

Earlier, Detective Sergeant Michael McKenna had said that Drumm was "the driving force" in Anglo.

Brendan Grehan SC, defending, said Drumm joined the bank in 1993 and was sent to the US where he and his family put down roots.

He returned to "somewhat unexpectedly" become chief executive in 2005.

He resigned on December 19, 2008. The family returned to Boston in 2009 and Drumm was extradited in 2016. He initially fought that and spent five months in a US federal penitentiary. Ultimately, he consented to returning.

Drumm had not put forward any testimonials or character references. "His life has effectively been an open book," Mr Grehan said. He did not want to have his family exposed to any further loss of privacy.

Drumm had accepted that he authorised the transactions.

"With the benefit of hindsight", he recognised it was a "huge error of judgment" on his part.

He believed he had the "tacit if not actual" approval of the regulatory authorities, and his motivation was to save the bank "during the worst financial crisis in living memory".

There was no evidence anyone actually suffered any loss, or made any gain, Mr Grehan added.

Irish Independent

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