DUBLIN – The former chief executive of Anglo Irish Bank was granted bail hours after his extradition from the United States, capping a seven-year legal battle during which he failed to win U.S. bankruptcy protection and evade Irish fraud charges.
A judge rejected assertions from prosecutors, detectives and fraud investigators that David Drumm was likely to flee Ireland if freed. Drumm spent five months in a U.S. jail before his extradition overnight under Irish police guard from Boston to Dublin Airport, where he was arrested at dawn Monday.
Drumm faces up to 10 years in prison if convicted on any of 33 fraud charges connected to the Dublin bank’s hiding of massive loans and losses from shareholders that ultimately ruined the bank. He offered no plea in court or during police custody Monday.
Ireland nationalized Anglo in 2009, seized control of its toxic property portfolio and dissolved the bank at an estimated cost of 29 billion euros ($32 billion). That burden overwhelmed Ireland’s own financial resources and forced the nation to negotiate a 2010 international bailout.
While other senior Anglo executives remained in Ireland and already have faced a range of criminal charges, Drumm fled with his wife and two daughters to the United States, where they had already bought a Cape Cod home and, after swapping it for a $2 million suburban Boston home, filed for U.S. bankruptcy protection. He lost that case in January 2015 when a Boston bankruptcy judge ruled that Drumm was “not remotely credible,” in part because he had failed to disclose the transfer of millions worth of assets, including cash and multiple Irish and American properties, into his wife’s name in a bid to deceive creditors and the court.
A Dublin court in June 2013 issued an arrest warrant for Drumm on 33 charges dating to the disaster that befell Anglo — the bank that most aggressively funded Ireland’s runway property boom — in 2008 as the global credit crunch struck.
The charges concern 451 million euros ($501 million) in secret loans to 10 top customers on condition they used all the money to buy Anglo’s own crumbling shares, along with contracts limiting their need to repay the loans in event of losses; an overnight 7.2 billion euro ($8 billion) cash transfer from another Dublin bank that allowed Anglo to conceal its true state of deposit losses in its 2008 earnings statement; and more secret share-buying loans to the bank’s biggest investor and his children. Those shares lost all their value.
The U.S. bankruptcy trial heard evidence that Drumm still owes Irish taxpayers 8.5 million euros plus interest in defaulting personal loans from Anglo.
Drumm challenged the U.S. extradition order but relented after judges twice refused to grant him bail, citing the risk he might flee again.
Drumm’s lawyer, Michael Staines, argued Monday that Drumm never posed a flight risk, could easily have fled to Canada, which has no extradition agreement with Ireland, and was willing now to be electronically tagged.
Dublin District Court Judge Michael Walsh granted Drumm his freedom on condition that he deposit 50,000 euros ($55,500) of his own cash and secure two similar cash guarantees from relatives. He ordered Drumm to surrender his Irish passport, declare that he possessed no U.S. passport and promise to report twice daily to his local police station.
His legal team said Drumm would be unable to confirm the full 150,000 euro financial security until Tuesday, so the judge ordered him held in an Irish jail overnight.
The judge noted that the unprecedented complexity of the case against Drumm — involving records of more than 400 phone calls and millions of pages of evidence — meant his trial might not even begin until 2017.