Fraud squad joins Anglo Irish Bank investigation

The fraud squad has been called in to investigate possible market abuse involving loans and share deals at scandal-hit Anglo Irish Bank, it was confirmed tonight.

Two probes begun by the Financial Regulator have been forwarded to the gardaí to launch criminal investigations.

They involve a €451m loans for shares scheme involving a golden circle of 10 mystery investors and €8bn in deposits moved between Anglo and Irish Life & Permanent to boost its books.

Anglo was nationalised last month amid fears it was on the verge of collapse, as one scandal after another emerged about financial irregularities within the lender.

The criminal investigation will focus on market abuse.

A spokesman for the Regulator said its investigations had gone as far as they could at its offices.

"We have been involved in a number of investigations in relation to Anglo and have reached a point where we have concluded that certain matters are of such a serious nature that it was appropriate that they be referred to the gardaí," he said.

"We will, of course, fully assist the gardaí with their investigations."

The maximum penalty under market abuse legislation is 10 years in prison and €10m in fines.

Meanwhile, the country's corporate watchdog, supported by garda fraud squad detectives, are continuing to trawl files, documents and computers at Anglo's central Dublin head office as they probe possible breaches of company law.

Three search warrants have been issued giving authorities access to the lenders Stephen's Green offices for the next month.

The extent of irregular goings-on at Anglo were detailed last Friday in its annual report and an independent auditor's review.

They confirmed a so-called golden circle of 10 investors was approached to take out €451m of loans to buy Anglo shares.

The scheme was devised to prop up the share price by preventing Ireland's richest man, Sean Quinn, from dumping 10% of his huge stake in the bank, through complex share contracts, on the international markets.

Rival lender IL&P became embroiled in banking scandals when it emerged its part in an €8bn loans deal to temporarily boost Anglo's books last year.

Separately, former Anglo chief Sean FitzPatrick is being investigated over €87m in personal loans he took from the bank over eight years but did not detail in annual reports.