Although Rusnak used a great deal of complex technical jargon about formulas and options to impress superiors and underlings alike in describing his actions, basically he used the bank’s money to buy Japanese yen and lost a fortune when the value of the currency dropped drastically and continually. He started losing money and lying about it in 1997, gained ground in 1999, and then started losing again. This is when he made the classic mistake of gamblers and investors who are losing frightening amounts of money. He continued gambling on the yen, increasing his bets, vainly hoping that eventual winnings would enable him to break even. His losses-actually the bank’s losses-grew to a phenomenal size. Rusnak hid his losses by logging fraudulent gains into his computer that canceled out his bad investments, then making fake paper receipts and letters from the Asian banks he worked with. He was able to fool the bank’s computer because he would enter two options simultaneously for the same amount, one paying and one receiving, but the paying option would expire that day and the receipt would live a long life. No one checked why so many options would have a one-day half-life. Because of the time zone difference, no one in Allfirst Bank phoned the Asian banks in the middle of the night, so Rusnak was able to lie successfully during the day. He convinced the small department of auditors at the Baltimore branch who were supposed to check on his dealings that all was well. On paper, Rusnak appeared to be a brilliant investor, and he was given hefty annual bonuses based on the bogus gains of his currency speculation. The lack of discipline by the local auditors working with Rusnak, who took the numbers from Rusnak’s own computer to determine his cost-to-risk ratio, compounded with the distance and lack of communication with the home office in Ireland, worked to Rusnak’s advantage. They took him at his word and did not check the paperwork.

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.