It was inconceivable that two senior banking executives were innocent dupes of a plan by Anglo Irish Bank to mislead the public, a prosecutor has told the jury in a conspiracy to defraud trial.
Four former executives from Anglo Irish Bank and Irish Life & Permanent (ILP) are on trial for allegedly conspiring to mislead investors about the true health of Anglo Irish Bank.
John Bowe (52) from Glasnevin, Dublin, Willie McAteer (65) of Greenrath, Tipperary Town, Co Tipperary, Denis Casey (56), from Raheny, Dublin, Peter Fitzpatrick (63) of Convent Lane, Portmarnock, Dublin have all pleaded not guilty at Dublin Circuit Criminal Court to conspiring together and with others to mislead investors by setting up a €7.2 billion circular transaction scheme between March 1st and September 30th, 2008 to bolster Anglo’s balance sheet.
On day 71 of the trial Úna Ní Raifeartaigh SC, for the Director of Public Prosecutions, continued to outline the State’s case to the 13-strong jury.
She told the jurors that in deciding on the case against Mr Casey, ILP’s chief executive in 2008, and Mr Fitzpatrick, ILP’s then finance director, they needed to consider what was in their minds when the accused authorised a €7.2 billion deal to boost Anglo’s customer deposits to mislead the public.
Frolic
“Were the ILP accused innocent dupes of Anglo’s plan? Did Anglo go off on a frolic of its own when they engaged in an accounting treatment that didn’t show a true and fair view?” she said.
She said it was the State’s case that they knew what Anglo would do and said it was entirely obvious the public were not going to be told the reality of these “back-to-back transactions”.
“This is the key issue you are going to have to decide,” she said.
She said it was inconceivable that high-level banking professionals, who were trained accountants and in the business of supervising the financial industry and doing deals, wouldn’t have known “full well what Anglo were doing”.
She said the prosecution wasn’t contending that the ILP accused had any control over how Anglo accounted for the deal. But she said they knew full well what Anglo would do, given Anglo’s reason for setting up the deal to “bolster” their balance sheet.
Ms Ní Raifeartaigh said that if Anglo had not presented the deal in the way it did, and so misleading the public, there would have been no point in doing the deal at all.
She told the jury: “These are not stupid or inexperienced people. These are experienced bankers. There’s a suggestion there of a gullibility. Do you find it reasonably credible, that they did this deal, thinking Anglo was doing it as an exercise in futility?”
Both men told gardaí that they did not know what Anglo would do. Counsel told the jurors that if they thought this could be true, “you have to acquit, because it will have raised a reasonable doubt about their intent”.
Harsh things
In his closing speech Diarmaid McGuinness SC, defending Mr Bowe, told the jury that he would have harsh things to say about the prosecution and their conduct in the case.
He said that Mr Bowe was different to his co-accused as he was not a chartered accountant, had never occupied a director’s position and had never signed or directed the €7.2 billion transaction in “any way, sense or shape”.
“He acted with the clear, honest and reasonable belief that Anglo were entitled to take customer deposits and that they were accounted for appropriately. He did nothing that would entitle you to convict him of a criminal conspiracy,” counsel told the jury.
He said he hoped to persuade the jury that the deposits from ILP were customer deposits, both in law and in fact and that the way they were accounted for in Anglo’s balance sheet was correct.
“Anyone who honestly held the view that [the transactions] were entitled to be on the balance sheet, is entitled to be acquitted,” counsel said. He said the State must prove that Mr Bowe had an intention to mislead the public.
Earlier in the State’s closing Ms Ní Raifeartaigh outlined the evidence against the ILP accused. She pointed to an email sent on September 15th, 2008 in which David Gantly, who was ILP’s group treasurer, told Mr Casey about the request from Anglo for a €5 billion placement to “bolster their customer deposits”.
She said this was clear evidence that Mr Casey knew Anglo wanted ILP to do a “cash back-to-back transaction” to bolster their deposits.
“They knew Anglo was planning to use these transactions to not present a true and fair view [of their accounts],” counsel said.
She said that Mr Fitzpatrick told investigating gardaí in 2010 that he authorised the deals because he thought Anglo needed funding to survive.
“The problem is that this wasn’t real funding. It didn’t bring real liquidity,” she said, adding that the money just went around in a circle and asking how that helps with the bank’s “real funding”.
The trial continues before Judge Martin Nolan and a jury.
