“a scheme of mesmeric complexity, reeking of dishonesty and sharp practice”

With Sean Quinn jnr in jail, and Peter Darragh Quinn ‘on the run’, there’s been another development in the long-running battle between the Quinn family and the former Anglo Irish Bank, now state-owned Irish Bank Resolution Corporation [IBRC], over the €2.8billion the IBRC is owed.  From the Irish Times report

Mr Justice Peter Kelly said he has presided over the Commercial Court since 2004 and regrettably was having to deal more often with cases involving “national and international fraud, sharp practice, chicanery and dishonesty”. However, he had never seen anything like the conduct in this case.

He made the remarks when granting an application by Irish Bank Resolution Corporation, formerly Anglo, for appointment of Declan Taite as receiver over the worldwide assets of various Quinn family members and over various foreign companies allegedly involved in the asset stripping scheme and based in Belize, Panama, Russia and United Arab Emirates. The Quinns consented to those orders.

The judge also granted IBRC interlocutory orders (orders continuing pending the outcome of full legal proceedings) freezing the accounts of various Quinn family members below €50m. The Quinns also consented to those orders and filed no replying affidavits.

The judge said, on the uncontradicted evidence before him, it seemed the Quinns had deliberately created and operated a scheme of mesmeric complexity, reeking of dishonesty and sharp practice, for the two-fold objective of putting assets beyond the bank’s reach and to feather [their] own nests. [added emphasis]

While a court could not make a final or binding decision on an interlocutory application, it had to be said all the evidence “points in one direction” in this case.

He had no hesitation continuing the orders freezing the accounts or taking the more unusual step of appointing receivers over the Quinns’ worldwide assets and accounts, he said.

The orders apply to Seán Quinn’s five adult children, nephew Peter Darragh Quinn, two sons in law Stephen Kelly and Niall Mc Partland, a number of foreign companies and any other party aware of the making of the orders.

How long before Sinn Féin, and the MP for Fermanagh and South Tyrone, Michelle Gildernew, drop their support for Sean Quinn, et al…

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  • son of sam

    The short answer to Pete’s question is when there are no votes in it for Sinn Fein.

  • Zig70

    I reckon I’d do the same thing faced with losing everything to a corrupt bank with a black hole debt. The a lot of folk admire Sean Quinn, he was seen to bring a lot of wealth home and is largely self made. The complete opposite to the banks (or politicians). Though I can’t help feeling that lots of small business’ have been chewed up and spat out by the banking crisis without help or sympathy.

  • Alias

    Zig70, he’s not defrauding a bank by willfully dishonouring his guarantee to repay the billions he borrowed from it for his own profiteering purpose: he’s defrauding the Irish taxpayers.

    I pointed out before that Quinn would do this and that the State would allow him to do it by not acting to prevent it. Unfortunately, we don’t have a political class that is fit for purpose – with that purpose being to promote and protect the national interest.

    Even as Quinn blatantly steals billions from the Irish nation we have members of that nation – and its political class – defending this unmitigated fraudster.

  • Reader

    Zig70: The a lot of folk admire Sean Quinn, he was seen to bring a lot of wealth home and is largely self made.
    Surely the narrative is: the ‘wealth’ was just bubble money – a stack of cash and notional assets exceeding the heap of debt. And when the bubble burst and the assets disintegrated, they tried to keep the cash and walk away from the debt. Not an option that is available for ordinary citizens.
    In addition, the “corrupt bank with a black hole debt” is state owned. Any money that can’t be extracted from the Quinns will be extracted from the taxpayer. Thankfully, as a Nordie, I need only look on, and marvel – if the AIB debt was being laid on my shoulders I would certainly want the Quinns to pay their actual debts first. But some people surely love rebels…
    €2.8billion – that’s €500 per citizen. Put your hands in your pockets to support the local hero, folks.

  • andnowwhat

    The Quinn’s are a walking, talking metaphor for the celtic tiger. The man had greatly outreached himself but that was done only because the banks that threw money at the man behaved like an over excited labrador pissing itself.

  • Alias

    Good post, Reader. A little understood aspect of the 70 billion of borrowed money that went into Quinn and ilk’s pockets is that it didn’t disappear into a hole in the ground never to be seen again – it disappeared into foreign bank accounts and investments outside of the state.

    When someone buys land for 10m and then sells to someone for 50m who sells it for 500m with planning, it’s only the guy holding it when the value collapses who takes the hit on what he is holding. However, most of these guys were buying and selling land to each other so even the guy with the 500m of debt still has his share of the 70 billion from previous transactions along with his share of profits from asset sales built on the land. The actual build costs were absorbed by the suppliers who were never paid. As that 70 billion didn’t find its way back into Irish banks as deposits it isn’t sitting, contrary to myth, in that hole in the ground but in foreign banks and assets.

    The laws in this State can’t ever recover that money for the citizens of the state and there simply isn’t a political class that could have implemented fit for purpose laws even if it wasn’t already far too late.

  • HeinzGuderian

    it does beg the question as to why irish politicians,over many long years,were not pursued with the same vigour by the courts ?
    A state funeral for aul Charlie Haughey,and Bertie can look forward to the same,no doubt.

  • BIGK

    It is very conviently being forgotten here that AIB should not belong to the tax payer. This was mearly a move by corrupt polititions and bankers to try and weasel out from their responsibilities. AIB should have been allowed to collapse and the scum who ran it put in jail for a very long time. The real crooks here are the very same gents who would now hang Quinn and all his offspring.
    Some are trying to gain points by trying to implicate Sinn Fein in this business. Maybe the ordinary man on the street can see past the spin being pushed forward by the authorities and the media. Fair play to the Quinns they are taking on the crooks who presume to control us and from where I am sitting they are winning.
    When the Bilderberger was advising Bulldog head he should have realised that all the Irish are not stupid. We dont all jump to their tune.

  • derrydave

    This is attempted theft from the state on a massive scale – up to 500 million euro which the Quinns are attempting to steal from the state – in effect the ordinary man and woman in the street. Their greed and arrogance is astounding and Sinn Fein would be well advised to distance themselves from this mess pronto.

    The Quinns (every one of them implicated in this theft) should all be jailed – and not just until the transactions are reversed either. And there should be no soft open prisons either – let them be treated as the common criminals they’ve become.

    I have lived in Cavan for a number of years and understand the high esteem in which the Quinns are held for their achievements in the past. These achievements and the good they have done for the border region however should in no way allow them to get away with this attempt at massive theft from the state !

  • BIGK

    My contention is that the AIB was illegally made a ward of the state to bail out the corrupt banksters and polititions. They are the ones who need to bebrought to boot. For too long the people of this country have been used to feather their nests. The Quinns are ordinary people who took on these crooks and beat them at their own game. I cannot understand that some people cant see past the media hype that this case has produced. This is not a theft from the state. The state would try and give this impression.
    The bankers of the world with the colaberation of their respective governments have been caught with their greedy paws in the cookie jar and are desperate to blame someone,anyone for their thieft.
    When the authorities take approperate action against the real crooks then we should consider what to do with the Quinns. The state has been thieving from the people for years and nothing is being done. People need to ask themselves do we live to sustain the state or does the state exist for our benefit?.

  • derrydave

    The Quinns are ordinary people who destroyed their own business empire by making disasterous investments in AIB. Nobody forced Sean Quinn to risk the business he had built from scratch – he did it all by himself, and now must accept that he threw the dice and lost everything. To try and somehow move 500 million euro of assets out of the clutches of those to whom they are owed is quite simply fraudulent and criminal behaviour driven by pure unadulterated arrogance and greed. In effect these assets no longer belong to Sean Quinn – he is attempting to steal them. This is clear-cut and blatant and the Quinns should pay for wht they have attempted to do regardless of what you think about the banks, bankers, politicians etc etc etc. Theft is theft is theft. Jail them – I know you or I would get the jail for attempting to steal a tiny fraction of this !

  • Greenflag

    ‘The bankers of the world with the collaboration of their respective governments have been caught with their greedy paws in the cookie jar and are desperate to blame someone,anyone for their theft.’

    Not just in Ireland its a western world pandemic 🙁

    ‘When the authorities take approperate action against the real crooks then we should consider what to do with the Quinns.’

    True enough .The cart is put before the horse yet again not just in this case but in all of these cases 🙁

    ‘The state has been thieving from the people for years and nothing is being done. ‘

    So have the banks .Just look at the Libor scandal and the list of thieving banksters and financial fraudsters in the USA and UK grows longer every day .

    ‘People need to ask themselves do we live to sustain the state or does the state exist for our benefit?.’

    People already know the answer . The State exists to protect the ‘bankster ‘ class first and foremost and by that I mean the top elites of this class -not the poor sods who slave behind the counters -assuming there will be any left after the next wave of ‘culling’!

    As to Derrydaves ‘Theft is theft is theft ‘

    Full marks for the obvious but what if the theft is legalised theft which the banksters made damn sure was the case when they cossetted the greedy and gobshite politicians in their Galway marquees with ‘presents ‘ of donations for a job .i.e legislation favourable to the financial criminal class -well done .

  • Alias

    Bigk, Quinn was a banker. Indeed, he was the most corrupt banker of them all, owning 28% of Anglo. He was the biggest banker in the state.

    He was also making a fortune during the boom times by supplying constuction materials to an industry fuled by by Anglo.

  • Alias

    You’re almost there, Greenflag. But you miss out on one vital point: all of the Irish ‘banksters’ lost all of the value of their shares. Why would bankers act to bankrupt themselves? They didn’t, of course, but their employees did. In the Irish example, it was the employees of the banks who bankrupted their employers (the shareholders).

    On the other end of the transaction (the borrower), the 70 billion supplied to Quinn and ilk was borrowed by those who knew full well that it was all boom-and-bust and they still have that 70 billion.

  • jthree

    Quinn did not own 28% of Anglo. He had derivative contracts which related to 28% of Anglo shares. The shares were in the ownership of outfits like IG Index and Credit Suisse.

    Also maybe it’s just possible that the Quinn legacy is a mixed one.

    It is true that he created half decent jobs in an area which had none and built genuinely world class factories which produced good products at a good price. Those factories continue to trade and employ people.

    It is also true that he took an exceptionaly reckless position in the derivatives market and has consistently lied and connived in an attempt to excuse his enormous and expensive mistake.

  • Alias

    He owned 28% of Anglo – and his failure to declare that he had built up a 28% stake via CFD is where he fell foul of Irish regulation. This made him the biggest banker in the state – and the biggest banker in the history of the state.

  • jthree

    No matter how many times you claim he owned 28% of Anglo it does not make it true.

    A commentator on namawinelake spells it out for the hard of understanding:

    “What most of the media pundits don’t seem to grasp is that he did not own the shares in Anglo.

    “He was betting on the movement. The shares were owned by the market makers (CMC Markets etc). If they called Sean’s margin and he did not pay, the market makers would have dumped the covering shares.

    “And it is at that point that Anglo shares would have collapsed and the impact on Anglo would be felt.

    !Would someone PLEASE explain the difference between shares and derivatives to RTE news and Joe Duffy.”

    A Financial derivative:

    A financial instrument whose characteristics and value depend upon the characteristics and value of an underlier, typically a commodity, bond, equity or currency. Examples of derivatives include futures and options. Advanced investors sometimes purchase or sell derivatives to profit from movement in share prices.

  • innis

    On a related point:
    To bring it home to people what the cost of the Quinn shambles is to the individual Irish Citizen, This is highlighted in the news that the 2% levy on all insurance policies (except life policies) is to be extended from 12 years to at least 15 years.

    This is because the hole in the Quinn Insurance accounts turns out to be €1.2 Billion instead of only €775 Million. All illegally transferred to pay the contracts for difference gambling losses.

    So it’s €500 a head lads, and 2% on all your insurance policies for 15+ years. What a hero.

  • Alias

    “No matter how many times you claim he owned 28% of Anglo it does not make it true.

    A commentator on namawinelake spells it out for the hard of understanding:” – jthree

    Thanks for the laugh. Now, as an anonymous message board poster myself, I don’t like to undermine their impeccable authority on such matters. However…

    The BBC is probably a bit more reliable at reporting facts than your preferred sources:

    “The court heard that between October 2005 and July 2007 Sean Quinn had built up a 28% stake in the former Anglo using contracts for difference – a financial instrument used to gamble on the bank share price. “

  • Alias

    Further to this, when you enter into a contract to buy on an agreed date, you become the legal owner. That is why Quinn and Anglo assembled the so-called “Golden Circle” to acquire the shares from Quinn that Quinn had contracted to buy via CFD, with Quinn then owning the rest. Quinn could not afford to pay for his 28% stake in Anglo since they were worth less than the agreed price. Even after he reduced his takeholding from 28% to 15%, he remained as the bigger banker in the history of the Irish state.

  • jthree

    Far be it from me to smash my head pointlessly into a brick wall…

    The BBC are not infallible and the important bit of the quoted sentence is “a financial instrument used to gamble on the bank share price.“ Because that’s what a CFD is.

    You’re second post is, alas, strewn with error.

    Quinn did not have a hand in assembling the Golden Circle -that was Anglo only.

    The shares were not acquired from Quinn because, as I’ve explained, he did not own them. The shares were owned by the institutions who were about to dump them on the market because Quinn couldn’t meet his margin call.

    The billions that Anglo are pursuing Quinn for is the money they lent him to meet his margin calls. The shares were then bought by the Golden Circle, Patricia Quinn and the Quinn children, not Sean. That’s the share support scheme that Whelan and McAteer are on the hook for.

    I understand that you’re fond of your ‘biggest banker’ rhetorical flourish but really it’s not true.

  • Alias

    Yes, darling, now back onto importmant matters…

    One other aspect of this ‘arrangement’ to reduce Sean Quinn’s stakeholding in Anglo from 28% to 15% was that it begs the question as to why the 10 members of the Golden Circle would borrow 45m each from Anglo to buy Anglo shares from Quinn that were worth considerably less than the price they were paying for them.

    You can only wonder if there was ever an intent to repay these loans to Anglo and if such an intent was even made a condition of the loans.

    You can see why Anglo would bail Quinn out since if they didn’t the bank’s share price would fall even further but who would bail Anglo out when the loans weren’t repaid?

    That would be the taxpayers, presumably:

    “The Taoiseach: I am not having an argument about what words to use. I am trying to explain to people the context of what was going on and why it was important it be unwound. Part of that was the conversion of those contracts for difference to 15% of shareholding for the Quinn [34]family. There was also the other question of other investors taking up the remainder. As I understand it, all of those ten were under the thresholds and the action was therefore not disclosable under law. It was under 3% of a shareholding.”

    These Golden Circle loans to bail out Quinn will also be dumped on the Irish taxpayers.

  • jthree

    Duh…we already know the loans were 75% non-recourse at the time they were made and were later made 100% non-recourse so there was little or no risk for the Golden Circle.

    You’re really not across the details of this stuff are you?

  • Mister_Joe

    .. As I understand it, all of those ten were under the thresholds and the action was therefore not disclosable under law.

    Which takes us right back to “..a scheme of mesmeric complexity, reeking of dishonesty and sharp practice.”

  • Mister_Joe

    You can fool all of the people some of the time….

    Just don’t try it with an eagle eyed Judge.

  • Alias

    “Duh…we already know the loans were 75% non-recourse at the time they were made and were later made 100% non-recourse so there was little or no risk for the Golden Circle.” – jthree

    Which isn’t the point made, darling. Would you like to read it again and pay proper attention this time? I think the keyword might have been placed on ‘intent’ with both parties to the transaction.

    But it does show that your hero is not a victim here but rather someone who was bailed-out from the consequences of his own greed at the expense of the taxpayers.

  • Alias

    And just to spell it out for you (as I now think you need such kindly assistence): non-recourse borrowing is always offered with an intent by the borrower to repay and an intent by the lender to seek repayment from the profits. Since there could have been no profit (certainly not a doubling of share price), there appears to have been no intent. Ergo, the transaction was fraudulent.

    You’re welcome.

  • jthree

    “These Golden Circle loans to bail out Quinn will also be dumped on the Irish taxpayers.”

    You think?

    I remember something about Anglo being nationalised at enormous and catastrophic cost but I’m a bit hazy on the details. Perhaps you could enlighten us.

  • jthree

    Also I’m totally mystified how Sean Quinn is my hero when all I’m doing is pointing out that you are wrong in fact about the nature of a CFD transaction.

  • Alias

    Gosh, having spelled that part out for you, it appears I have to spell out the rather obvious conclusion too: if the terms of the transaction are held to be fraudulent on the grounds that there was no intent by the lender to seek repayment and no intent by the borrower to repay then the contract is void and the bank can seek recovery of the money from the borrowers, i.e. 45m from each of the Maple 10.

    That, however, is essentially a political decision, and as we don’t have a political class that is fit for purpose, that isn’t likely to occur unless the Court alludes to it and criticises the failure to seek recovery in the case against the Maple 10 that will shortly be before the courts for offences under the Companies Act.

  • Alias

    “in the case against Fitzpatrick that will shortly be before the courts”

  • jthree

    Inane horseshit speculation on your part, but carry on, it’s v enjoyable.