Fraud bank 'could face £85m loss'

[Legal Beagles]

A bank at the centre of an investigation into alleged fraud and money laundering could suffer losses of up to £85m,a court hears.

More...

[enaid]

Re: Fraud bank 'could face £85m loss'

Fraud bank 'could face £85m loss'


Peter Creegan was released on bail

A bank at the centre of an investigation into alleged fraud and money laundering could suffer losses of up to £85m, the High Court in Belfast has heard.
The worst-case scenario was revealed as bail was granted to former First Trust branch manager Peter Creegan.
Mr Creegan, 43, from Silverbridge, County Armagh denies 26 charges, including multiple counts of fraud.
He is charged along with financial adviser Damien Mallon, 52, from Armagh.
The fraud allegedly involved bogus loan applications and the proceeds of tax evasion and fuel smuggling.
The prosecution has said loan applications were made where the applicants either did not exist or knew nothing about the request.
Money was released from the bank, which is the Northern Ireland unit of Allied Irish Bank, and used to buy property which was put into company names, it was claimed.
As Newry branch manager, Mr Creegan was said to be able to lend out sums up to £300,000 without seeking authorisation from anyone higher up in the bank.
Accounts with both the First Trust and Halifax - with whom Mr Mallon had an agency - were also allegedly used to distribute the proceeds of tax evasion and fuel smuggling.
'High-risk transactions'
Crown counsel said the bank had identified 116 high risk lending transactions authorised by or associated with Mr Creegan.
Although the projected losses currently stand at between £3.4m and £3.9m, police anticipate these figures may rise as the investigation continues, the court heard.
"The bank themselves feel in the worst-case scenario their exposure is a potential exposure of up to £85m," the lawyer said.
During interview Mr Creegan denied any wrongdoing, while Mr Mallon - who is accused of fraud and converting criminal property on dates between 2002 and 2009 - was said to have made admissions.
A defence barrister described Mr Creegan as a man with a clear record who had been held in high esteem by "hundreds if not thousands of people" but was now financially ruined.
The barrister claimed banks had been "chucking money" at people in previous years and were now, in tougher times, going through the books to identify high-risk transactions.
The judge ordered that Mr Creegan must lodge £10,000 or the deeds to his house before he could be released.
Further cash sureties of £40,000 were also imposed as conditions, along with a ban on any contact with any customers at the First Trust Bank in Newry.