Monday 22 April 2019

Four to face charges arising out of Anglo Irish probe

Investigation is 'moving ahead nicely' but complex case means no arrests are likely until next year, says Jim Cusack

Four people are expected to face charges arising from the garda investigation into Anglo Irish Bank. Senior garda sources say the investigation is "moving ahead nicely" but gardai will not be in a position to make arrests and seek charges until next year at the earliest, because of the complexities of the case.

Thirty people, including detectives from the Garda Bureau of Fraud Investigation, assisted by officials from the Office of the Director of Corporate Enforcement, are engaged in the case on a full-time basis sifting through what sources say is a "massive" amount of paper and electronic documents relating to the activities inside Anglo Irish Bank and its dealings with other financial institutions and individuals.

"They are sorting through a massive amount of material. They have to go through all the transactions. The Commissioner has stressed its importance. At the same time, because of the nature of the investigation, it will not be this side of Christmas but it is moving ahead nicely," said a source.

Gardai reject comparisons with the handling of the Bernie Madoff case in New York where the crooked financier was arrested in December last year and sentenced to 150 years' imprisonment in June this year. They pointed out that Madoff had been intermittently under investigation since the mid-1990s and it was only after his enormous pyramid scheme collapsed and he pleaded guilty to the charges that he was jailed for.

The Garda Commissioner Fachtna Murphy, who is a former head of the old Fraud Squad, put the Garda's Director of Services, Assistant Commissioner Derek Byrne, directly in charge of the Anglo investigation.

Byrne provided the Fraud Bureau's head, Chief Superintendent Michael McLaughlin, with additional detectives from the National Bureau of Crime Investigation.

The thrust of the garda investigation is to gather sufficient proof to convince the Director of Public Prosecutions that there was "intent" on the part of Anglo Irish staff to commit offences and not, as they would argue, that there was simple incompetence.

Three main issues arise from the Anglo Irish Bank dealings: the loans totalling €451m to 10 customers to buy shares and shore up the bank's share price; the loans of €120m to Sean FitzPatrick which were not shown in company accounts; and the "bed and breakfast" loan of €7.45bn from Irish Life and Permanent, again to bolster Anglo's share price.

Garda sources said they are preparing cases based on breaches of the Companies Act and the Criminal Justice (Theft and Fraud Offences) Act of 2001. A person found guilty under the Theft and Fraud Act faces a sentence of up to 10 years in prison or a fine of up to €10m.

However, with a total of only 65 investigators in the Fraud Bureau and the emphasis on the Anglo Irish investigation, sources say the bureau is under pressure to complete other high-profile fraud investigations. They are also "completely snowed under" with credit card and other equally complex computer and internet frauds. The amount of fraud under investigation is so great that cases involving less than €200,000 have been temporarily sidelined, according to one source.

A legal source told the Sunday Independent that the public's expectation that those identified as being involved in alleged illegality in Anglo Irish should be arrested quickly was "unrealistic". He pointed out that fraud cases were notoriously complicated and the gardai would only move to arrests when they had completed their case, proved intent and already had guidance from the Director of Public Prosecutions.

He also said that even apparently straightforward cases, like the money-laundering case involving the proceeds from the IRA's robbery of the Northern Bank found in the back garden of Cork money lender Ted Cunningham, take years to complete. Cunningham was arrested and the money seized in February 2005 yet his case did not come to court until mid-2009 when he was convicted and sentenced to 10 years' imprisonment.

There is also relatively little experience here in investigating large-scale share manipulation. The largest case involving alleged share fixing to come before the courts was that of the DCC disposal of shares in Fyffes in 2000.

In May 2008 when the civil case came to the Supreme Court, Judge Niall Fennelly described the unloading of €106m worth of Fyffes shares prior to a profits warning, saying: "To trade on the use of inside information is recognised for what it is. It is a fraud on the market."

However, the Office of the Director of Corporate Enforcement never prosecuted, sources say, because the case would have had no certainty of success and would have "swallowed up all their resources" and would have faced a well-financed legal defence.

Just prior to DCC director Jim Flavin's resignation, DCC issued a statement commenting on Judge Fennelly's comments saying their actions "did not involve any intentional wrongdoing on the part of Jim Flavin and, in essence, were an unwitting breach of civil law".

Gardai say they expect that well-resourced legal defences will be mounted in any cases arising from Anglo Irish.

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