Former Anglo Irish Bank chief executive David Drumm engaged with others in a €7.2 billion "con" in which dishonest information was reported to the market, his trial has heard.
Mr Drumm is facing charges of conspiracy to defraud and false accounting in 2008 and his trial has entered its closing stages at Dublin Circuit Criminal Court after nearly five months.
Mary Rose Gearty SC, prosecuting, said the €7.2 billion transactions at the centre of the case were reported to the market in December 2008 as “a massive con” and that the accounting scheme used was fraudulent and dishonest.
Counsel told jurors that the money that circulated between Anglo, Irish Life & Permanent (ILP) and Irish Life Assurance in September 2008 was simply not real money.
Referencing the expression “putting on your best suit”, meaning to put out the best balance sheet possible at year end, Ms Gearty said: “In this case Anglo’s family snapshot contained a stranger, who was wearing a really nice suit.”
She said a thread running through defence cross-examinations was that the financial market was under extreme pressure and Anglo was going down the tubes anyway.
‘Limping on’
She said this did not exonerate those who acted to try to keep the bank “limping on for another few days.”
Mr Drumm (51) of Skerries, Co Dublin, has pleaded not guilty to conspiring with ILP's former chief executive Denis Casey, Anglo's former financial director Willie McAteer, Anglo's then head of treasury John Bowe and other to defraud depositors and investors at Anglo by "dishonestly" creating the impression that deposits in 2008 were €7.2 billion larger than they were.
Ms Gearty said that in order to convict Mr Drumm of a conspiracy the jury must find he had conspired with at least one other person.
Mr Drumm has also pleaded not guilty to false accounting on December 3rd, 2008, by furnishing information to the market that Anglo’s 2008 deposits were €7.2 billion larger than they were. He accepts that the multi-billion euro transactions took place between Anglo and ILP in 2008 but disputes that they were fraudulent or dishonest.
Counsel referred to a recorded phone call of September 29th, 2008 between Mr Drumm, Mr McAteer and Mr Bowe.
During the conversation, Mr Bowe said “the money goes around in a circle” and “we give the money to them and the dance here is we actually get it back in time and that’s becoming very very tough to do”.
Mr Drumm replied that “a f***ing journal entry would do it a lot quicker” and Mr McAteer later commented “very good journal entries”.
Result
Ms Gearty said this was clear, reliable and contemporaneous evidence that the three men were discussing a criminal conspiracy. She said the prosecution did not have to prove there was any actual loss or gain as a result of the conspiracy.
“The intent was to induce depositors, investors or shareholders to made decisions about economic affairs based on false information,” she said.
In his remarks, Brendan Grehan SC, for Mr Drumm, said the banker was the “captain of the ship heading into a storm” in September 2008, and did what was needed to get through it.
He said that the Central Bank came to Mr Drumm during the global financial crisis and asked him and others to “tog out for Ireland”.
“In hindsight Anglo may have had insurmountable problems, but when you are in the middle of a crisis, hope springs eternal,” Mr Grehan said.
He said Mr Drumm did his best in good faith in the circumstances which arose. He did not morph into a criminal mastermind who committed the biggest fraud in criminal history.
Mr Grehan told the jury the transactions between Anglo and Irish Life and Permanent (ILP) in September 2008 took place in a particular context, unrivalled in living memory.
He said Mr Drumm had never denied anything he did in relation to the transactions and “straight up” accepted responsibility for them.
“He did not try to blame anyone down in the engine room for bringing the ship onto the rocks”, counsel said. “He disputes that there was fraud or dishonesty. That’s the single issue in this trial.”
He said the jury were being asked to find a massive conspiracy to defraud yet the prosecution say they don’t need to prove anyone lost a penny.
Mr Grehan will conclude his remarks on Friday before Judge Karen O’Connor delivers her charge .