Updated 6.35pm
A JUDGE HAS ordered that former Anglo Irish Bank chairman Sean FitzPatrick be found not guilty of hiding millions of euro in loans from auditors.
On day 126 of the State’s longest running criminal trial, Judge John Aylmer said that there was a real risk that the former bank executive would be denied his constitutional right to a fair trial.
He said this resulted from alarming flaws in the prosecution.
The judge said that he intended to direct the jury to acquit FitzPatrick (68) of Whitshed Road, Greystones, Co Wicklow of all remaining charges.
His ruling was made in the absence of the jury, which returns to court tomorrow.
The prosecution alleged that amount of loans connected to FitzPatrick was artificially reduced for a period of two weeks around the bank’s financial end of year statement by short term loans from other sources, including Irish Nationwide Building Society.
Described as “refinancing” this practice was also known as “bed-and-breakfasting” or “warehousing”, as the loans would be allegedly put into short term storage.
During legal argument, Dublin Circuit Criminal Court heard there was nothing illegal about the loans arrangement.
The State alleged that the former director was obliged to disclose the full extent of his loans to the bank’s auditors Ernst & Young and instead he had concealed them.
After his arrest in 2010 FitzPatrick denied to investigating gardaí from the Garda Bureau of Fraud Investigation that he had ever sought to conceal the multi-million euro loans.
He told detectives that there was no financial benefit to him, his family or the bank in the annual refinancing of some of his loans.
Speaking outside of court after the ruling FitzPatrick said it had been a long, tiring and difficult time for him and his family. He said that thankfully the trial was over now and it was a wonderful day for him and his family.
Judge Aylmer had said that the investigation, carried out by the Office of the Director of Corporate Enforcement (ODCE), fell short of an unbiased, impartial and balanced investigation that an accused is entitled to.
He said this was because the lead investigator for the ODCE, Kevin O’Connell was inexperienced and made fundamental mistakes.
He said the ODCE investigation failed to seek out evidence as to the innocence as well as the guilt of the accused. He said the ODCE adopted an inappropriate, biased and partisan approach and were trying to build a case rather than investigating a case impartially.
Much of the case rested on “letters of representation” signed by each Anglo directors during the audit and the judge ruled that this issue was not properly investigated.
He said the most fundamental error was the way in which the ODCE set about taking statements from witnesses.
He said this involved coaching of witnesses, contamination of their statements from third parties such as solicitors for the auditors and cross-contamination between witness statements.
He said warnings to the jury would be inadequate to address these flaws.
Judge Aylmer also pointed to the extraordinary destruction of documents linked to the investigation by the lead investigator. This happened during legal argument in the first trial in May 2015 and emerged during that trial.
The judge said there must be a concern that the shredded documents were of assistance to the defence and damaging to the prosecution.
The retrial of FitzPatrick began last September. It was scheduled to last three months but quickly became bogged down in weeks of legal argument in the absence of the jury.
FitzPatrick had pleaded not guilty to 27 offences under the 1990 Companies Act. These include 22 charges of making a misleading, false or deceptive statement to auditors and five charges of furnishing false information in the years 2002 to 2007. The DPP withdrew nine of these charges earlier this month.
The prosecution came on foot of an investigation by the ODCE that began shortly after the full size of FitzPatrick’s personal loans emerged in December 2008.
Between 2002 and 2007 loans taken out by FitzPatrick, his wife and family members increased from in the region of €10 million in 2002 to around €100 million in 2007. The revelations led to FitzPatrick resigning as chairman.
The loans were used to finance development of shopping centres, hotels and offices at a time when a lot of money could be made in property development, the jury were told at the start of the trial.
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