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Ex-Anglo Irish Chairman Fitzpatrick Arrested in Fraud Probe

July 24, 2012

Ex-Anglo Irish Chairman Fitzpatrick Arrested in Fraud Probe

Anglo Irish, which financed some of the country’s largest property developers, was bailed out in 2009 after a collapse in real-estate prices led to soaring losses. Photographer: Aidan Crawley/Bloomberg

Former Anglo Irish Bank Corp. Chairman Sean Fitzpatrick was charged following a fraud investigation into the failed lender that has cost Irish taxpayers 29 billion euros ($35 billion) to bail out.

Fitzpatrick was arrested today and charged with breaches of company law, Detective Sergeant Brian Mahon said at a hearing at the Courts of Criminal Justice in Dublin. The 64-year-old declined to comment when charges were read to him, police said. Judge Cormac Dunne ordered Fitzpatrick be released on bail and appear again in court on Oct. 8.

Anglo Irish, which financed some of the country’s largest property developers, was bailed out in 2009 after a collapse in real-estate prices led to soaring losses. The Dublin-based lender had lost more than 98 percent of its market value in 2008. The police’s bureau of fraud investigation and the nation’s director of corporate enforcement opened investigations into the lender the following year.

Fitzpatrick faces the same charges as two former subordinates at the bank, police said in court documents. Willie McAteer, a former finance director, and Pat Whelan, a one-time managing director of the lender’s Irish unit, were charged yesterday in relation to Anglo Irish’s provision of unlawful financial aid to 16 people so they could buy shares in the lender in 2008.

Fitzpatrick’s Career

Mahon told the court that Fitzpatrick was arrested by arrangement at Dublin airport at about 5:30 a.m., and was later charged at a Dublin police station.

A chartered accountant by training, Fitzpatrick joined a predecessor of Anglo Irish in 1974 and became the group’s chief executive officer in 1986. He became group chairman in 2005 and quit the bank in December 2008 after failing to disclose loans from the lender over an eight-year period. The loans amounted to 106.8 million euros in March 2009, the bank said the same year.

Fitzpatrick was declared bankrupt in the High Court in Ireland on July 12, 2010, after Anglo Irish, to whom he owed 110 million euros at the time, rejected his attempt to settle with creditors.

Anglo Irish was nationalized in January 2009, becoming the first of five of the country’s largest lenders to be seized by the government as loans soured following the crash.

The lender merged last year with smaller rival Irish Nationwide Building Society, which cost 5.4 billion euros to rescue, and the new entity was renamed Irish Bank Resolution Corp. in preparation for wind-down by the end of the decade.

To contact the reporters on this story: Joe Brennan in Dublin at jbrennan29@bloomberg.net; Finbarr Flynn in Dublin at fflynn3@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net


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