A judge has said the former Anglo Irish Bank chief executive David Drumm appeared to be the driving force behind the €7.2bn conspiracy that led to three banking executives being jailed yesterday.
Judge Martin Nolan made the comments as he sent the men to jail for terms ranging between two and three-and-a-half years.
Former Anglo chief risk officer Willie McAteer (66), ex-Anglo treasury executive John Bowe (52) and former Irish Life & Permanent chief executive Denis Casey (56) showed little emotion as the sentences were handed down.
Their first night in jail was spent at Mountjoy, where they were processed and kept under close observation, as is the practice with new inmates.
A decision will be made in the coming days on where each man will serve out his sentence.
McAteer, of Greenrath, Tipperary town, was sentenced to three and-a-half years; Bowe, of Glasnevin, Dublin, was sentenced to two years and Casey, from Raheny, Dublin, was sentenced to two years and nine months.
All three were convicted in June of conspiring with others to mislead investors, depositors and lenders by setting up a €7.2bn circular transaction scheme in September 2008 to bolster Anglo's balance sheet. They had denied the charges.
The verdicts followed an 89-day trial, the longest criminal trial in the history of the State.
The jury spent a total of 65 hours deliberating.
The case came to trial following a lengthy investigation, which began in 2009.
The judge said that the scheme was "dishonest, deceitful and corrupt", as it gave a distorted impression of Anglo's accounts to shareholders and depositors.
"From the evidence, it appears to me the driving force was Mr Drumm," he said during the sentencing hearing at Dublin Circuit Criminal Court.
Nevertheless, the three defendants were involved in the scheme and knew that what they were doing was wrong.
Their behaviour was reprehensible, the judge said.
Drumm was not a defendant in this trial, but is due to face similar conspiracy charges next year.
Sentencing McAteer to three-and-half years, Judge Nolan said he had held a senior position in the bank.
Although it appeared that Drumm was driving the scheme, McAteer was seen as a leader within the bank and he could have objected.
"It is grossly reprehensible what he did and a great shame on him," said the judge.
McAteer authorised these transfers when he knew that what he was doing was "deceitful, underhand and corrupt".
Sentencing Bowe to two years, the judge said he was "a lesser functionary in the bank".
The judge described him as the "de facto treasurer". He was a man of considerable experience and should have known what he was doing was wrong.
"In law, following orders is not a defence," the judge said.
Bowe "failed to act with integrity and honesty in these matters" and had behaved reprehensibly by going along with it.
Sentencing Casey to two years and nine months, Judge Nolan acknowledged that he had become involved in the scheme as part of the so-called 'Green Jersey' agenda, where Irish banks were encouraged to assist others in a time of crisis.
Although Anglo was the author of the scheme, Casey authorised Irish Life & Permanent's involvement and had behaved "disgracefully".
"This was a grave error of judgment," the judge said. "He should have known and did know that this was a sham transaction."
Earlier, the judge said the crime had arisen during a period when people in the banking sector "were operating under great stress".
The judge had taken into account submissions on behalf of the defendants that they had made no direct profit or reward from their crimes. He said all had acted in what they believed was the best interest of the companies they worked for.
Judge Nolan had taken into account their background, what each man had achieved in life, their contribution to the community and that they had been good family men.
Each of them had been the subject of odium and ridicule, had endured a lot of stress and had lost their jobs. However, they were involved in a conspiracy where two blue-chip publicly quoted companies conspired to manipulate the balance sheet of Anglo Irish Bank.
It was decided in Anglo that it needed to hit a certain "corporate number" for banking deposits.
"It seemed Mr Drumm and the top management at Anglo decided this corporate number was important," said the judge.
When this could not be achieved legitimately, a "dishonest, deceitful and corrupt scheme" was entered into.
The public, he said, was entitled to probity from blue-chip companies. "If we cannot rely on probity, then we lose all trust in such institutions," he said.
"People are entitled to rely on the integrity and honesty of top firms. In this case, honesty and integrity were sorely lacking."
The scheme at the centre of the case was designed so that the books of Anglo Irish Bank could look much healthier than they actually were amid the global financial crisis in 2008.
The court heard that following the so-called 'St Patrick's Day Massacre', when Anglo's shares slumped by 20pc, the bank's executive directors decided Anglo should show "a good corporate number to the market", meaning that it needed to increase its corporate deposits.
Irish Life & Permanent (IL&P) was approached and a back-to-back transaction was arranged whereby Anglo placed €750m with IL&P and the IL&P group gave Anglo a corporate deposit from its Irish Life Assurance Corporation, a non-banking entity managed by IL&P.
In June, another deal took place, with Anglo transferring €3bn to IL&P and IL&P transferring a portfolio of home mortgages to Anglo.
Over that summer, Anglo drew up a list of 50 funding initiatives, but by September most of these had fallen away. The trial heard evidence that David Drumm asked a manager in Anglo's treasury department if IL&P would do another set of transactions worth up to €7bn that month. These were to be included in Anglo's year-end figures.
What resulted was a series of nine 'rotational transactions' between September 26 and 30, with €7.2bn moved from Anglo to IL&P, with IL&P sending the money back, via Irish Life Assurance, to Anglo. The trial heard that the transactions were arranged "with considerable difficulty".
Judge Martin Nolan described the dishonest scheme as a "conspiracy on the public". Shareholders and depositors were entitled to rely on public accounts, but were instead given a distorted view of the financial strength of Anglo, he said.
Anglo Irish Bank's former auditor Ernst & Young (EY) won't face any new legal consequences despite sharp criticism by Judge Martin Nolan yesterday for its failure to spot a €7.2bn fraud at Anglo Irish Bank, the Irish Independent understands.