Drumm faces loss of homes in US

US AUTHORITIES are looking to seize the American properties owned by the wife of ex-Anglo Irish Bank chief executive, David Drumm, claiming they were acquired fraudulently.

Among them is the Drumms’ home in Wellesley, Massachusetts.

The trustee of Mr Drumm’s estate, Kathleen P Dwyer, has agreed a price of just over $4 million (€3m) for the house, which is in one of the most exclusive parts of Cape Cod.

She has applied to reverse what she called “fraudulent transfers” between Mr Drumm and his wife Lorraine. She is also seeking permission to sell the properties, with the proceeds going to Anglo, which is now state owned.

The US bankruptcy court will convene later this month to decide whether Mr Drumm will get any of the proceeds of the sale.

Mr Drumm is claiming that the house is his principal private residence and as such, under US bankruptcy law, he should be entitled to keep $500,000 from the sale.

But Anglo and Ms Dwyer argue that he should not be allowed keep any of the proceeds, because of his behaviour.

Mr Drumm transferred cash and gave stakes in US properties to his wife Lorraine during the financial crisis, the authorities claim.

According to Mr Drumm, the property at Wellesley was bought by money belonging to his wife, but the trustee said the suggestion this money was not Mr Drumm’s was “patently false”.

Mr Drumm is accused of orchestrating a series of transfers to dilute and hide his interests in the real estate.

“All of the funds used to acquire the Wellesley property were derived solely from the debtor (Mr Drumm),” states the complaint.

“Mrs Drumm acquired her interest in the property with funds transferred to her by the debtor.”

The trustee is now seeking to dismantle a trust used by the Drumms in the US, calling it a sham.

Mr Drumm is also accused of not telling the truth about his main private residence in the US. The trustee claims Drumm said his principal private residence was at Stage Neck Road, in Massachusetts, but instead he lived at a nearby address.

The complaint, filed on Monday night, says Mr Drumm for years controlled the finances of the couple and Lorraine had not been employed since at least 1997.

Dwyer also claims that by mid-2007 Mr Drumm and other Anglo executives “were aware” of the decline in the Irish property market and knew the impact it would have on Anglo.

Mr Drumm filed for bankruptcy last year and the court has been examining his case that he should be allowed to walk away from more than €10m in debts he owes to his former employer. His filing for bankruptcy in October of last year has stalled legal action against him in Ireland.