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Ireland sends three bankers to jail over 2008 banking meltdown

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Staff Writer |
Willie McAteer
Collapse   A 7.2-billion-euro circular transaction scheme

Three senior Irish bankers were jailed for up to three-and-a-half years for conspiring to defraud investors in the prosecution after the 2008 banking crisis that crippled Ireland.

Irish taxpayers had to spend 64 billion euros - 40% of annual economic output - after a property collapse forced the biggest state bank rescue in the euro zone.

The crash forced Ireland into a three-year bailout in 2010 and the finance ministry said it could take another 15 years to recover the money pumped into the banks still operating.

Former Irish Life and Permanent CEO Denis Casey was sentenced to two years and nine months.

Willie McAteer, former finance director at the failed Anglo Irish Bank, and John Bowe, its ex-head of capital markets, were given sentences of 42 months and 24 months respectively.

All three were convicted of conspiring together and with others to mislead investors, depositors and lenders by setting up a 7.2-billion-euro circular transaction scheme between March and September 2008 to bolster Anglo's balance sheet.

Irish Life placed the deposits via a non-banking subsidiary in the run-up to Anglo's financial year-end, to allow its rival to categorize them as customer deposits, which are viewed as more secure, rather than a deposit from another bank.

"By means that could be termed dishonest, deceitful and corrupt they manufactured 7.2 billion euros in deposits by obvious sham transactions," Judge Martin Nolan told the court, describing the conspiracy as a "very serious crime".

"The public is entitled to rely on the probity of blue chip firms. If we can’t rely on the probity of these banks we lose all hope or trust in institutions," said Nolan.

McAteer was convicted in 2014 of illegal lending and providing unlawful assistance to investors, but sentenced to perform community service when a judge ruled he was "led into error and illegality" by the Irish regulator.

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