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Drumm 'has been advising' US developer who owes Anglo €90m

EX-ANGLO Irish chief executive David Drumm has acted as a financial adviser to a developer whose firms owe the bank more than €90m, a US court has been told.

Mr Drumm (44), who gardai wish to question over major irregularities at Anglo, has been advising Boston-based builder John McGrail, according to another financial consultant.

Mr McGrail, who was born in Mayo, is himself facing separate tax, insurance and illegal dumping charges, the Irish Independent has learned.

The 47-year-old was a regular borrower from Anglo over the past decade. His cluster of companies, which are known as the Mayo Group, drew down multimillion dollar loans to fund property acquisitions around Massachusetts.

Publicly available land registry documents show the Mayo Group entered into an updated loan agreement with Anglo in May 2010 for a sum of $123.5m (€92.5m).

Mr Drumm spent five years in Boston between 1998 and 2003 building up the bank's American loan book.

However, it is unclear whether he personally approved any of the Mayo Group's loans. His name does not appear on any of the mortgage documents associated with those loans.

Following his resignation from Anglo in December 2008, he set himself up as a financial adviser in the Boston area and was rumoured to be targeting Anglo clients for business.

Links between Mr Drumm and Mr McGrail first emerged when the former banker registered the address of his financial advisory business, Delta Corporate Finance, as being in the same building as the Mayo Group headquarters.

Staff at Mr McGrail's firm denied any link to Mr Drumm when the Irish Independent visited its premises in Boston late last year. However, a sworn affidavit by Boston-based financial consultant Michael Epstein states that Mr Drumm acted as an adviser to the Mayo Group.

The affidavit was filed as part of Mr Drumm's bankruptcy case. Mr Drumm has debts of €10.26m, including €8.5m owed to Anglo.

Mr Epstein was hired by bankruptcy trustee Kathleen Dwyer to work on the case. He said he had previously attended a number of meetings with Mayo Group management at which Mr Drumm was present.

The meetings were about the restructuring of the Mayo Group. Mr Epstein said that "on information and belief" Mr Drumm "had an advisory relationship with Mayo".

Mr McGrail did not return calls to his office seeking comment, while Mr Drumm did not respond when contacted through his lawyers.

Mr McGrail immigrated to the US in 1987 and found work as a building contractor. Over the next two decades he built up a group of property development companies employing more than 100 people.

Much of his business has involved buying up rundown buildings and improving them.

However, he recently fell foul of authorities over the alleged illegal disposal of asbestos. A court hearing is due to take place in the next week at the Suffolk County Superior Court in Boston.

A statement from the office of the Attorney General for Massachusetts said charges filed related to the alleged activities of one of his companies, JM Realty, between 2005 and 2007.

Prosecutors claim material containing asbestos was dumped in regular rubbish collection points.

The statement added Mr McGrail was also arraigned on charges of evasion of unemployment insurance and failure to provide authorities with pay records.

Mr McGrail is contesting the charges.

Irish Independent