An unlikely member of US corporate fraudsters club

Unlike the top figures in Enron or WorldCom, John Rusnak did not ransack his company for personal gain but was driven by desperation to recover losses, writes Conor O'Clery.

John Rusnak is now on his way to prison, vilified as a corporate fraudster who almost brought AIB to its knees. But he is an unlikely adornment to the pantheon of American corporate fraudsters.

Unlike top figures in Enron or WorldCom, he did not ransack his company for personal gain and a jet-setting lifestyle.

He gambled away AIB millions, but he was driven by desperation to recover losses rather than calculating avarice.

His crime was serious enough,accepting his salary and bonuses when he was entitled to neither. It was his misfortune not just that he was caught before he could recoup the lost money - by the end he was in too deep for this to happen - but that he should face the wrath of the law at a time when public opinion in the US is crying for heads to roll in the area of corporate crime.

His lawyer David Irwin knew that leniency would be elusive when US Attorney General John Ashcroft singled out the Allfirst scandal at a recent press conference as an example of how the US government was clamping down on serious malfeasance.

Like many currency traders, Rusnak came from a working-class background. He was born in Pennsylvania, the son of a steel worker, and raised as a Catholic in Bristol Township, a tidy working-class suburb of Philadelphia.

He was brighter than the average child at Truman High School in Philadelphia and continued to shine at Bucknell University in Lewisburg, Pennsylvania, making the Dean's List. After obtaining a degree in economics in 1986, he got a job as a currency options trader at First Fidelity Bank in Philadelphia.

He moved to New York two years later to do the same thing at Chemical Bank, a predecessor of JP Morgan Chase.

He married and settled with his wife, Linda, in Westport Connecticut and in 1993 came to the attention of David Cronin, head of Treasury at Allfirst, then known as First National Bank of Maryland, and of the bank's senior vice-president, Robert Ray.

They liked what they saw. Rusnak was full of confidence, even a bit cocky. He persuaded them that he could use sophisticated methods to swell First Maryland's treasury profits by engaging in options trades.

John and Linda Rusnak moved to Baltimore, where they bought a rambling old property in the Mount Washington district. He was a model citizen. He did voluntary work, had local art exhibitions in his home, mowed his own lawn, worked on his house and owned a dog called Barney.

When his two children, Alex and Katie, came along, he joined the board of the Shrine of the Sacred Heart School.

But at work, as his trades went wrong, the unpleasant side of his character asserted itself. He bullied subordinates and threw tantrums to keep them from looking too closely at what he was doing.

The more money he lost, the more he was courted by the big banks, which made huge commissions from his trades.

Their sales people brought him to big football and golfing events. He was taken to Las Vegas on one of a number of outings, which included "inappropriate entertainment" that would later get two representatives of Citibank fired.

He and Linda were given an all-expenses-paid trip to Italy.

Despite knowing that it was all predicated on a lie - he was a failed trader, not a successful one and his prominence was solely based on the size of his bets - he lived a Walter Mitty existence to the full.

He admitted to a friend that he was consumed by his importance.

His recommendations could help traders and sales representatives get good jobs. He reckoned that of 300 people globally engaged in high-level foreign exchange trading, 100 were proprietary dealers, allowed to gamble their banks' money, and of these he was among the top 10.

His trades were so massive they moved markets. In Singapore, traders would recognise his bets, saying: "There's Johnny Ruz' making a move."

He should never have been allowed to get away with it for five years but the Irish-owned bank was bedevilled by personality and culture clashes, the treasury department was dysfunctional, and Dublin controls were never applied.

When his world came crashing down in February this year, the other side of his character re-asserted itself.

He took his unsuspecting wife to an hotel and, while the children amused themselves, he confessed to Linda that his success was a sham. She told Rusnak that if he did not straighten himself out she would leave him. He promised he would and that there would be no question of fleeing to escape the consequences.

He found an astute lawyer, David Irwin, a former prosecutor, who took him straightaway to the US Attorney's Office in Baltimore for a six-hour meeting, with two FBI officials sitting in, during which he made a clean breast of his fraudulent trades.

They quickly accepted that he was not an embezzler who had salted the bank's money away on a Caribbean island.

He was not even arrested until June, when he was brought before US Magistrate Beth Gesner in the federal court a few blocks from Allfirst headquarters in Baltimore.

While awaiting sentence, he helped Baltimore's "Preaching Pastor", the Rev Joe Ehrmann, to set up an urban football league for disadvantaged kids.

The real punishment for John Rusnak, family man, is having to live with the knowledge of what it has done to his friends at the bank, a number of whom lost their jobs and reputations over the scandal, and especially to his wife and children, the innocent victims of the affair.