The Allied Irish Bank Scandal
by The Allied Irish Bank (AIB), the second largest bank in Ireland, was rocked by one of the largest scandals in banking history in 2002, losing over $691 million when a currency trader in their Baltimore office invested unsuccessfully in Japanese yen and kept the bank’s losses a secret for nearly five years.
Head of treasury funds supervisor Robert Ray grew suspicious in January 2001. New accounting rules that shed more light on individuals’ balance sheets showed Rusnak to be much busier than he should have been. In early February 2002, one of the auditors in Rusnak’s branch noticed that no one seemed to be exercising the options that Rusnak was recording, and those options had never been confirmed. Also, Rusnak’s log showed a $50 million gain in one 24-hour period in January. When phone calls with Asian banks suggested that Rusnak’s receipts were questionable, the bank gave him a deadline over the weekend of February 3 to come up with documentation confirming his investments. He failed to show for work on Monday, the 4th, and the bank called the FBI. When the scandal broke, the 2001 profit reports had to be reduced by 60 percent to cover the shortfalls that had been hidden for so long. Allied Irish Bank stock fell by over 20 percent in a day.
In June 2002 Rusnak was charged with seven counts of fraud, threatening him with a possible sentence of thirty years in prison and a one-million-dollar fine. In October he agreed to plead guilty to one count of bank fraud and received seven and a half years in prison, followed by five years probation in exchange for cooperating with officials investigating whether other people were involved in the scandal.
In October 2002, Allied Irish Bank sold its Allfirst division to M & T Bank of Buffalo, New York, for $3.1 billion and 30 percent of the newly formed bank. In 2004, Allied Irish Bank was fined over $29 million for overcharging customers starting in 1994.
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Post CommentJoy from philippines
On February 18, 2009 at 12:30 am
I am just wondering why this AIB keep on sending an information to my email add about my winning in the Irish Lottery connected to this bank. How true is this? Do u have a affiliate bank here in the Philippines…???
Miss Terry Lynn Burgess
On April 18, 2009 at 6:28 pm
They tried to tell Me I had millions of dollars there from inheritance,they wanted to collect $780.00 for the transfer that I did NOT have to send,after awhile,I stopped hearing from them. Terry Burgess
ashok sharma
On November 17, 2009 at 3:35 am
i have also recieved scores and scores of UK National Lottos Irish lottery winnings and total winning they gave me in emails amounts to nearly over 70 to 80 millions of gbp but could not remit a dime. these lotto and other inhertance funds mail scames cannot survive without an active support of the banks.
Just recently I was awarded 150Million pounds of inheritance by a mail reportedly from AIB bank and I think some high profile banks are swindling huge funds
David L.
On September 21, 2010 at 8:38 pm
The emails from AIB about lottery wins are fraudulent and are not really from AIB, but from scammers who made up a fake web site. No reputable bank like AIB (even if they have themselves done some shady things like this scandal about currency investments, the \”normal\” bad things that banks do \”legitimately) would involve itself in lottery winnings, except to deposit them for you if you had won in a real lottery. They do not inform you of lottery winnings. A real lottery company would have to do that. I get those sometimes too, and not just from AIB. You can report such scams to the Internet Fraud Complaint Dept. of the FBI.