A Dublin court has sent three former senior banking executives to jail for committing "sham transactions" in an effort to deceive customers and shareholders during the 2008 financial crisis.
"The trio will be among the first senior bankers globally to be jailed for their role in the collapse of a bank during the crisis," as Reuters reports.
Former Anglo Irish Bank executive John Bowe got a two-year sentence, former Irish Life and Permanent chief executive Denis Casey was given a sentence of two years and nine months, and Bowe's colleague and former Anglo executive Willie McAteer got three and a half years.
As the Irish Times explains,
[Their] scheme, described by the judge as a series of "sham transactions," involved Anglo placing massive sums with Irish Life and Permanent and receiving the money back, via a non-banking subsidiary, as customer deposits.
The short-term transactions enabled the bank to disguise a heavy loss in customers' deposits, which would have confirmed the widely held suspicion in the market that Anglo was close to collapse.
The Washington Post further explains that the trio "essentially inflated Anglo Irish Bank's deposit levels by about $8 billion." The Post continues:
That inflation was meant to obfuscate the funding crisis at Anglo Irish Bank, which had invested heavily in a property bubble in Ireland that popped almost as soon as the financial crisis began in the United States. As the crisis spread from the United States to the European Union, of which Ireland is a part, Irish banks were frantically asked to pay back loans and debts to U.S. banks, but they couldn't. That, in turn, led to Ireland asking the European Union for the most expensive bailout in its history.
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Judge Martin Nolan called the scheme a "very serious crime," and said the now-defunct bank's auditors "should have known what was occurring if they were doing their job properly" and that their failure to see the wrongdoing was the result of "blindness or wilful blindness."
The Associated Press describes their tactics as amounting to "the biggest accounting fraud in Irish corporate history."
While Iceland has put financial executives behind bars, that has not been the case in the U.K. or U.S., a point noted by some Twitter users on Monday in response to the jailing of the Irish bankers:
— Better Markets (@Bettermarkets) August 1, 2016
— Robin Hood Tax (@RobinHoodTax) July 31, 2016
Say whaaaaaat? I understood this was not possible.
"Ireland jails three top bankers over 2008 banking meltdown" https://t.co/mSBDPrgG0d
— pourmecoffee (@pourmecoffee) July 30, 2016