A former banker who led a bust institution which contributed to the collapse of the Irish economy has been sentenced to six years in prison.
David Drumm, 51, was convicted earlier this month at Dublin Circuit Criminal Court of conspiracy to defraud and false accounting after arranging dishonest and fraudulent multibillion-euro transfers to boost the books of the failed bank Anglo-Irish in the months before it imploded in 2008.
Judge Karen O’Connor said Drumm will be given credit for the five and a half months he served in custody in the United States during his extradition to Ireland in 2015.
Anglo was taken into state control in January 2009 following a run on its deposits and plummeting share prices.
Bailing out Anglo was to cost taxpayers billions of euro.
The judge said Drumm was being sentenced for the two offences he had been convicted of, and not for Ireland’s financial collapse.
“This court is not sentencing Mr Drumm for causing the financial crisis. Nor is this court sentencing Mr Drumm for the recession which occurred,” she told the court.
“This offending did not cause Anglo-Irish Bank to collapse.
“This court will sentence Mr Drumm only for the two specific offences for which he has been convicted.”
She went on to tell the court she was of the view that eight years’ imprisonment was the “appropriate headline figure”.
But the judge said: “Taking into consideration the mitigating factors, this court is going to impose a sentence of six years’ imprisonment in relation to counts one and two.”
Drumm was convicted in connection with the 7.2 billion euro (£6.3 billion) fraud following a trial that lasted more than 80 days.
He had denied conspiring to “dishonestly” create the false and misleading impression that deposits in 2008 were 7.2 billion euro larger than they were as well as knowingly presenting the false figures to the market in December 2008.
But he was found guilty of two offences, conspiracy to defraud contrary to common law and false accounting contrary to section 10 of the Criminal Justice (Theft and Fraud Offences) Act 2001.
The judge said the second offence flowed from the first, and that the jury rejected submissions made on behalf of Drumm and convicted him unanimously.
“He was the chief executive officer at the time, a member of the board of and therefore in a position of trust in relation to the bank, its depositors, investors and lenders and also potential depositors, investors and lenders.
“In addition, the public are entitled to trust the information published by a public limited company and to make decisions based on that information.”
She added: “Mr Drumm along with others put together a dishonest scheme and engaged in transactions, designed to inflate deposits from a non-banking entity to Anglo-Irish Bank on September 30 2008 which was the reporting year end date for that bank.
“The intention was to create the false and misleading impression that Anglo Irish Bank was stronger or in a healthier position than it actually was as a result of 7.2 billion euro in corporate deposits i.e. deposits from a non-bank entity.”
And she told the court: “The fact that the scheme ultimately did not succeed is irrelevant. Mr Drumm was part of a conspiracy which potentially could have caused significant loss.
“It appears that no actual money was lost. From the evidence it is clear he was the driving force in Anglo-Irish Bank and the person behind the funding initiatives being considered by the bank.
“He authorised the transactions, was at the helm of the bank, and clearly extremely ‘hands-on’ in his position in the bank.”
Dressed in a dark suit and blue open-collar shirt, Drumm, of Shenick Avenue in Skerries, Co Dublin, listened intently as the judge delivered his sentence, but gave no reaction.
Three of his former colleagues – John Bowe from Anglo’s treasury department, Willie McAteer, the bank’s former director of finance and the former chief executive officer of Irish Life and Permanent, Denis Casey, were all convicted of the same conspiracy and jailed in 2016 for terms ranging from two to three and a half years.
The judge pointed out during sentencing that McAteer and Bowe “were subordinates to Mr Drumm within the company structure in Anglo Irish Bank”.
“Mr Drumm held a more senior position and was a more influential figure. He had a leadership role,” she said.