Anglo accuses Drumm of fraud

THE exiled former chief executive of Anglo Irish Bank has been accused of outright fraud by his former employers.

The bank said David Drumm manipulated his position to ensure that loans taken out by him and other directors could not be fully chased by the bank.

He did this, the bank has said, by delaying the recording of these loans for nine months to see how Anglo’s stock price would fair and altering key pieces of documentation.

Anglo’s claim against Mr Drumm said he tricked the bank he ran into extending loans to its directors and 10 investors who borrowed large sums of money to buy shares in the institution.

Then, when Anglo got into trouble, the bank said Mr Drumm interfered with its right to enforce the loans which directors took out by fraudulently documenting them as “non-recourse” agreements.

In a devastating brief filed in a complaint against his bankruptcy proceedings in the US state of Massachusetts, Anglo said he used his wife as a buffer to stop the institution coming after him.

“Drumm’s well-established pattern of concealment, deception, falsehood, manipulation and intentionally fraudulent behaviour both during his tenure as [Anglo] CEO and his [bankruptcy] case contravenes the intent and spirit of bankruptcy,” it said.

The brief alleged he:

*Aided the concealment of Sean FitzPatrick’s loans.

*Defrauded the bank by preventing it chasing directors loans, including his own borrowings, that had been used to buy shares in Anglo.

*Transferred assets to his wife to avoid them being taken.

*Lied in his evidence to the American courts.

Anglo also accused Mr Drumm of knowingly supplying false evidence to the bankruptcy court in order to undervalue and conceal the true value of his assets in the US.

The judge will now have to decide whether the bank’s claim merits a high-profile bankruptcy trial, at which Mr Drumm would have to account for many of these alleged actions.