William McAteer, former finance director of Anglo Irish Bank, has been given a three-and-a-half year jail sentence for his part in a €7.2bn (£6.07bn) accounting fraud following the conclusion of the longest criminal trial in Irish legal history into three men accused of artificially shoring up the bank’s value at the height of the financial crisis
Former Anglo executive John Bowe received a two year sentence and former group chief executive of Irish Life and Permanent (ILP) Denis Casey a term of two years and nine months. The judge at Dublin Circuit Criminal Court described their actions as ‘reprehensible’.
The three took part in a fraud which involved so-called circular transactions, designed to disguise the true state of the bank's financial health with the aim of misleading investors, depositors and lenders between March and September 2008.
Under the scheme, Anglo loaned ILP €7.2bn which then returned the money to the bank via its insurance arm, Irish Life Assurance.
Anglo then accounted for the transactions as customer deposits rather than an inter-bank loan. Customer deposits are considered a better way of assessing a bank’s financial health than interbank loans.
In passing sentence, Judge Martin Nolan described the sham transactions as ‘dishonest, deceitful and corrupt’.
‘The public is entitled to rely on the probity of blue chip firms. If we can't rely on the probity of these banks we lose all hope or trust in institutions,’ the judge said.
The judge also expressed incredulity and said it ‘beggared belief’ that auditors EY could have signed off on the bank’s accounts. He said that as a global accountancy firm it should have known the true situation at least by the end of October 2008 if it had been doing its job properly.
In a statement in response, EY pointed out that it was not a party to the proceedings.
‘EY fully cooperated with requests from the prosecution for witnesses and documentation in this matter. Neither the prosecution nor the defence chose to call any EY witness to give evidence at the trial in front of Judge Nolan.
‘We will not be commenting further on this matter due to ongoing proceedings.’ EY said.
The men have 28 days to lodge notice of an intention to appeal their convictions or sentences or both.
Anglo had to be rescued by the Irish government in 2009, as a result of heavy exposure to property lending in a bail-out estimated to have cost Irish taxpayers some €30bn (£23bn).
