David Drumm jailed for six years for role in 'premeditated' €7.2bn bank fraud scheme
Former Anglo Irish Bank CEO David Drumm has been jailed for six years for his role in a “premeditated and planned” multi-billion euro bank fraud scheme in 2008.
Earlier this month, a jury at Dublin Circuit Criminal Court returned unanimous verdicts of guilty on charges of conspiracy to defraud and false accounting, after just over ten and a half hours of deliberations.
Today, Judge Karen O'Connor described Drumm as “the driving force” in Anglo and said he had engaged in “grossly reprehensible behaviour” while in a position of trust.
“This court is not sentencing Mr Drumm for causing the financial crisis. Nor is this court sentencing Mr Drumm for the recession which occurred,” she said.
She said the fact the €7.2billion fraudulent scheme between Anglo and Irish Life & Permanent (ILP) didn't ultimately succeed was irrelevant, as the conspiracy could have caused significant loss.
The judge noted it appeared no actual money had been lost.
Judge O'Connor said that clearly Mr Drumm and his colleagues were working in difficult circumstances to protect the interest of Anglo Irish Bank.
The bank was haemorrhaging money at the time and funding initiatives had disappeared.
“However, the motivation to keep the bank open is irrelevant. This was grossly reprehensible behaviour and it does not provide any excuse for fraud and dishonesty.”
It was the State's case that Drumm (51) conspired with Irish Life & Permanent's former CEO, Denis Casey, Anglo's former financial director Willie McAteer and former Head of Treasury at Anglo, John Bowe, among others, to carry out €7.2bn in fraudulent circular transactions in order to bolster the customer deposits figure on Anglo's balance sheet.
The State also alleged that this €7.2bn was falsely accounted for as part of the bank's customer deposits in preliminary accounts published on December 3rd 2008, therefore misleading the market as to Anglo's true strength.
Bowe (54) from Glasnevin, Dublin, McAteer (67) of Greenrath, Tipperary Town, Co. Tipperary and Casey (58) from Raheny, Dublin were convicted in June 2016 on the conspiracy to defraud charges.
In sentencing him to six years for conspiracy to defraud and false accounting, Judge O'Connor noted Drumm was a person of previous good character and had a supportive family.
Drumm, dressed in a navy suit and open-collared blue shirt leaned back slightly in the dock as sentence was passed, but showed no visible reaction.
The maximum prison sentence for conspiracy to defraud is unlimited, while the maximum jail term for false accounting is ten years.
Judge O'Connor said Drumm had lost his reputation and his conviction would encroach on future employment.
“This is difficult for him on a personal level in circumstances where he was respected within the banking industry,” she said.
The judge also noted that Drumm had been the subject of much “opprobrium” and said this had been difficult for him and his family on a human level.
She said the aggravating factors in the case were the nature of the offending, the abuse of position of trust within the bank and the fact that significant planning went into this €7.2billion fraud.
Judge O'Connor said Drumm will get credit for the five months he spent in a US federal penitentiary before he ultimately consented to his extradition in March 2016.
The former banking executive lived in Wellesley, Massachusetts, US for a number of years after the collapse of Anglo.
Earlier, Detective Sergeant Michael McKenna confirmed to the court that he had no previous convictions.
Drumm's lawyers told the court he had instructed them not to put forward any testimonials or character references.
Brendan Grehan SC said that since his client became the chief executive of the Anglo Irish Bank “his life had been an open book” and he did not wish to have others exposed to further adverse publicity or loss of privacy.
Mr Grehan said his client was married with two children, and had worked his way from humble beginnings to the dizzying heights of CEO in what was described as one of the world's best banks.
He said Drumm was the fourth of eight children, whose father was a truck driver and mother was a hairdresser.
Drumm, of Skerries, Co Dublin, was on bail throughout the 87-day trial, the third longest criminal trial in the history of the State, and his bail was continued after his conviction.
He had pleaded not guilty to conspiring with former bank officials Denis Casey, William McAteer, John Bowe and others to defraud depositors and investors at Anglo by “dishonestly” creating the impression that deposits in 2008 were €7.2 billion larger than they were.
He had also pleaded not guilty to false accounting on December 3, 2008, by furnishing information to the market that Anglo's 2008 deposits were €7.2 billion larger than they were.
Former Anglo Irish Bank CEO David Drumm has been jailed for six years for his role in a multi-billion euro bank fraud scheme in 2008.
Earlier this month, a jury at Dublin Circuit Criminal Court returned unanimous verdicts of guilty on a charge of conspiracy to defraud and one of false accounting, after just over ten and a half hours of deliberations.
Judge Karen O'Connor delivered the sentence shortly after 4pm this afternoon and said that any time already spent in custody should be taken into consideration.
The maximum prison sentence for conspiracy to defraud is unlimited, while the maximum jail term for false accounting is ten years.
Judge O’Connor sentenced Mr Drumm to six years and ordered that he would get credit for the five months he had spent in a prison in Boston before being extradited to Ireland in March 2016.
The judge said she felt "the appropriate headline figure is eight years imprisonment in relation to both counts", but imposed a six-year sentence after reflecting on mitigating factors.
The former banking executive lived in Wellesley, Massachusetts, US for a number of years including after the collapse of Anglo.
He was subject to lengthy extradition proceedings and was held in custody for five months in a US Federal Penitentiary before he ultimately consented to his extradition in March 2016.
Drumm (51) of Skerries, Co. Dublin was on bail throughout the 87-day trial, the third longest criminal trial in the history of the State.
His bail was continued after his conviction and he was present in court for the hearing this morning, dressed in a navy suit and an open-collared blue shirt.
During this hearing, his lawyers told the court he had instructed them not to put forward any testimonials or character references.
Brendan Grehan SC said that since his client became the chief executive of the Anglo Irish Bank “his life had been an open book” and he did not wish to have others exposed to further adverse publicity or loss of privacy.
It was the State's case that Drumm conspired with Irish Life & Permanent's former CEO, Denis Casey, Anglo's former financial director Willie McAteer and former Head of Treasury at Anglo, John Bowe, among others, to carry out €7.2bn in fraudulent circular transactions in order to bolster the customer deposits figure on Anglo's balance sheet.
The State also alleged that this €7.2bn was falsely accounted for as part of the bank's customer deposits in preliminary accounts published on December 3rd 2008, therefore misleading the market as to Anglo's true strength.
Bowe (54) from Glasnevin, Dublin, McAteer (67) of Greenrath, Tipperary Town, Co. Tipperary and Casey (58) from Raheny, Dublin were convicted in June 2016 on the conspiracy to defraud charges.
Drumm, of Skerries, Co Dublin, had pleaded not guilty to conspiring with former bank officials Denis Casey, William McAteer, John Bowe and others to defraud depositors and investors at Anglo by “dishonestly” creating the impression that deposits in 2008 were €7.2 billion larger than they were.
He had also pleaded not guilty to false accounting on December 3, 2008, by furnishing information to the market that Anglo's 2008 deposits were €7.2 billion larger than they were.
More to follow.
