Irish banker at center of scandal arrested in Massachusetts

AP News
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Posted: Oct 11, 2015 5:41 PM

BOSTON (AP) — A man at the center of Ireland's greatest banking scandal has been arrested in Massachusetts and faces potential extradition to his homeland.

The U.S. Marshals Service and the U.S. attorney's office said federal agents arrested former Anglo Irish Bank chief executive David Drumm on Saturday on an extradition warrant.

They didn't specify where Drumm was arrested or what charges he faces. He is scheduled to appear Tuesday in U.S. District Court in Boston.

Drumm, 48, is a focal point for Irish criminal and parliamentary investigations into the 2009 nationalization and 2011 dissolution of Anglo. The Dublin bank employed aggressive lending policies to fuel Ireland's runaway property market for a decade — then faced collapse amid the global credit crunch of 2008. Ireland itself was forced to negotiate an international bailout in 2010 when the nationalized losses at Anglo and other Irish banks proved too great to finance.

Drumm resigned as chief executive in late 2008 as state-empowered investigators started to unearth evidence of a series of accounting frauds at Anglo that were designed to hide the scale of its deposit losses and exposure to toxic debt. Drumm fled to the United States and filed for bankruptcy protection, but a New York judge rejected his case, ruling that he had intentionally sought to conceal the scale of his personal wealth.

Irish lawmakers overseeing a public fact-finding inquiry into Ireland's banking debacle have asked Drumm to return to Ireland to testify, but he refused in July and instead sent a letter of apology and explanation via his lawyers. State prosecutors asked lawmakers not to publish its contents, but it was widely leaked.

"Whilst I do firmly believe the bank has shouldered a disproportionate amount of blame for what happened, I do not seek to divert blame for my mistakes and failings as CEO," he wrote in the leaked statement.