Ex-Anglo bank chief faces 33 charges if extradited to Dublin

AP News
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Posted: Oct 13, 2015 7:21 PM

BOSTON (AP) — Ireland hopes to prosecute a disgraced former chief executive of Anglo Irish Bank for 33 counts of fraud, forgery and other crimes if he's extradited from Boston to Dublin, court documents unsealed Tuesday show.

The disclosure, reflecting six years of Irish police and corporate fraud investigations into David Drumm, came days after his arrest in his luxury Massachusetts home and hours ahead of his appearance in a Boston court to face an extradition warrant. If returned to Ireland and convicted of the most serious charges, Drumm, 48, could face "an unlimited term of imprisonment," the warrant said.

Anglo was the failed institution at the heart of Ireland's 2008-13 financial crisis. It was the most aggressive lender during Ireland's decade-long construction boom, gambling borrowed money on continued runaway growth in property values at home and abroad. When the 2008 global credit crunch exposed Anglo's fragile finances, the Irish government introduced a state-backed guarantee on Anglo debts in a failed bid to reassure investors.

By early 2009, the government nationalized Anglo and its toxic property portfolio at an ultimate estimated cost to Irish taxpayers of 29.3 billion euros, or $34 billion, a bill so large it overwhelmed Ireland's ability to finance itself and led to a humiliating 2010 bailout. Ireland dissolved Anglo in 2011 and still is trying to sell many of the half-built property assets funded by it.

Drumm and his wife fled to the United States in 2009, bought a 4,000-square-foot, $2 million home in the upscale suburb of Wellesley and then filed for U.S. bankruptcy protection in a bid to avoid repaying 8.5 million euros, or $9.7 million, in Anglo personal loans. Drumm argued the home was his wife's, not his.

In federal court in Boston on Tuesday, Drumm's lawyer, Tracy Miner, told a magistrate judge the case was "a little bit more complicated" than typical extradition cases and suggested Ireland was seeking Drumm's extradition "for a political purpose."

Drumm entered the courtroom wearing handcuffs and leg shackles. His hands were uncuffed for the brief hearing. His wife was in court to watch the proceeding.

Miner said she planned to seek Drumm's release on bail. A hearing on bail arguments is scheduled for Friday.

A separate hearing was scheduled for Nov. 10 to establish a schedule for the extradition case.

In January, a Boston judge rejected Drumm's bankruptcy case in scathing terms, citing the banker's efforts to conceal millions of dollars in assets and testimony riddled with "outright lies." Drumm's appeal of that ruling accuses the judge of bias and his legal team of incompetence.

In the Irish warrant published Tuesday, Drumm faces a string of charges:

— Making false or misleading disclosures to Anglo shareholders that concealed the existence of the bank's biggest investor and the extent of that holding.

— Organizing illegal loans to help other elite bank clients secretly buy Anglo shares in a failed 2008 bid to bolster the bank's collapsing stock value.

— Forgery and falsification of loan agreement letters designed to provide a bogus front for those share purchases totaling 451 million euros, or $513.6 million.

— Conspiracy to defraud shareholders by negotiating a series of deceptive deposits involving rapid back-and-forth transfers with colluding Irish banks. Anglo used these 2008 maneuvers to add nearly 8 billion euros, or $10 billion, in make-believe corporate deposits to its earnings statements.

Most of the charges carry maximum penalties of five to 10 years imprisonment each upon conviction, but the warrant says a conviction for conspiring to defraud shareholders "carries a maximum sentence of an unlimited term of imprisonment."

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Online:

Drumm extradition warrant detailing charges: http://bit.ly/1VQPyEY