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Abu Dhabi, UAESunday 22 July 2018

Anglo Irish Bank's ex-chief Drumm jailed for six years on fraud charge

One of the few top bank executives to be found guilty of a crime stemming from the financial crisis, which sparked a worldwide recession

Former CEO of Anglo Irish Bank, David Drumm, arrives at Dublin Circuit Criminal Court in Dublin, Ireland. He was jailed for six years for conspiracy to defraud and false accounting. AFP 
Former CEO of Anglo Irish Bank, David Drumm, arrives at Dublin Circuit Criminal Court in Dublin, Ireland. He was jailed for six years for conspiracy to defraud and false accounting. AFP 

Anglo Irish Bank’s former chief executive was sentenced to six years for orchestrating a scheme to give a false picture of the lender’s strength during the financial crisis.

David Drumm was convicted on June 6 of conspiracy to defraud and false accounting. The charges stemmed from a 2008 plan that circulated money with another bank at lightning speed, to create an illusion that Anglo had about €7.2 billion (Dh30.46bn) more non-bank deposits than it actually did. The 51-year-old was the “driving force” behind the fraud, Judge Karen O’Connor said in a crowded courtroom in Dublin.

The public “has be able to trust its banks”, Judge O’Connor said. “In this case, two ‘blue chip’ publicly quoted companies conspired to manipulate the public accounts of Anglo Irish.”

Drumm, who wore an open-necked blue shirt and a blue suit in court, is one of the few top bank executives to be found guilty of a crime stemming from the financial crisis, which sparked a worldwide recession and widespread public anger. Drumm, who had pleaded not guilty, was extradited from the US to face charges in 2016.

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Seeking leniency, Drumm’s lawyer, Brendan Grehan, said his client accepted he had made a “huge error of judgment”. However, he asked the judge to consider the forces at play in the international banking world at the time.

The bank was facing “annihilation,” Mr Grehan said, adding that Drumm’s intent was to save the lender. “It’s easy to forget how chaotic it was.”

Judge O’Connor didn’t accept that argument. She said the headline prison term for the offences was eight years, but reduced the sentence to six years on mitigating factors, including Drumm’s loss of reputation and previous good record.

The “motivation to keep the bank open is irrelevant,” she said. “This was grossly reprehensible behaviour and it does not provide any excuse for fraud and dishonesty.”