Former Anglo Irish Bank chairman on trial over huge personal loans
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Former Chairman of Anglo Irish bank, Sean Fitzpatrick, arrives at the Criminal Courts of Justice in Dublin, Ireland September 26, 2016. REUTERS/Clodagh Kilcoyne
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By Conor Humphries
DUBLIN (Reuters) - The former chairman of the failed Anglo Irish Bank went on trial on Thursday on charges of misleading auditors about personal loans worth tens of millions of euros, in one of the most high profile prosecutions related to Ireland's 2008 banking crisis.
Sean FitzPatrick was accused of "artificially reducing" loans worth tens of millions of euros for a few weeks around the end of the company's financial year to avoid their full value being shown on the bank's annual accounts.
Prosecutor Dominic McGinn told the court that the loans ballooned to about 100 million euros ($111 million) in 2007 from about 10 million in 2002 and were used for commercial property development, which was highly profitable at the time.
FitzPatrick pleaded not guilty to all 27 charges, including providing misleading, false or deceptive statement to auditors Ernst & Young (EY) and for furnishing false information.
Two Anglo Irish executives were among three Irish bankers jailed in July for between 24 and 42 months conspiring to defraud investors. They were the first senior bank executives to be jailed in relation to the crisis.
FitzPatrick was found not guilty in 2014 on charges of illegal lending and providing unlawful assistance to investors.
Anglo Irish, which was nationalized in 2009 and wound down in 2011 was synonymous with the casino-style lending practices that drove the "Celtic Tiger" boom and subsequent bust, pushing the state to the brink of meltdown in 2010.
Ireland's taxpayers stumped up 64 billion euros - almost 40 percent of annual economic output - to bail out the banks, and the country was forced into a three-year bailout in 2010.
On Thursday, McGinn told the jury that FitzPatrick signed off on accounts that were "inaccurate as to the true position" of loans extended to himself and his family.
"The prosecution contention is that Mr FitzPatrick authorized all that and did it for the reason of making sure ... the official loans that were on the books at year end at Anglo were artificially reduced," he told the court.
He said the bank used "temporary refinancing" at the Irish Nationwide Building Society to mask the true size of the loans.
The trial was due to continue on Friday and is expected to last for three months.
(Editing by Louise Ireland)
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