David Drumm remains in custody before extradition hearing

Former Anglo boss was arrested on Saturday and will appear in court on Tuesday

Former Anglo Irish Bank chief executive David Drumm remains in custody on Sunday after being arrested by the US authorities on Saturday ahead of an extradition hearing in a Boston court on Tuesday.

The extradition process could be a lengthy one and in such US cases individuals are not entitled to a presumption that they will be granted bail.

Mr Drumm was detained in the US, his home for the past six years, on an extradition request sent to the US Department of Justice by the State seeking his return to Ireland to face criminal charges.

The arrest of the 48-year-old former banker marks the first time that Mr Drumm has been directly drawn into criminal actions arising from Garda investigations into events leading up to Anglo’s costly collapse.

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"I can confirm that Mr Drumm was arrested today by US Marshals in Massachusetts on an extradition warrant," spokeswoman Christina Dilorio-Sterling for the US Attorney in Boston told The Irish Times on Saturday.

“He will remain in custody until his hearing in federal court in Boston on Tuesday. I cannot provide further information at this time.”

She declined to say in follow-up queries where he was being held.

Supervisory deputy US Marshal Kevin Neal also declined to say where Mr Drumm is being detained and would not comment on where the former banker was arrested by US Marshals on Saturday.

Mr Drumm will appear on Tuesday at the US District Court in the John Joseph Moakley US Courthouse, a building better known in the past two years as the setting for the trials of Boston gangster James “Whitey” Bulger and Boston Marathon bomber Dzhokhar Tsarnaev.

The courthouse overlooks the waterfront of Boston Harbour and is not far from the Massachusetts court where Mr Drumm filed for bankruptcy in 2010 as he was being pursued for debts by Anglo.

Mr Drumm has been under investigation by the Garda as part of wide-ranging criminal investigations into transactions leading up to the collapse of Anglo and files have been sent by the Garda Bureau of Investigation to the Director of Public Prosecutions.

It was reported at the start of this year that the State had begun extradition proceedings against the former Anglo chief executive.

A detailed extradition file was sent through diplomatic channels to the US Department of Justice, outlining up to 30 charges that the DPP has directed should be brought against the one-time banker.

Criminal charges have already been brought against a number of Mr Drumm’s former colleagues at Anglo. A number have already been tried and more cases will go to trial next year and the following year.

Two former Anglo executives were convicted last year of breaking company law by providing unlawful financial assistance to 10 long-standing customers of the bank in a scheme designed to shore up the bank’s flagging share price during the 2008 banking crisis.

The trial judge described Mr Drumm during the proceedings as the “instigator and author of the scheme.”

Three former Anglo employees were jailed for between 18 months and three years in July for conspiring to hide bank accounts from the Irish tax authorities and to defraud the Revenue Commissioners.

Mr Drumm resigned as chief executive of Anglo in 2008 and moved to the US, where he previously worked for Anglo, six months later.

The bank was nationalised by the Government less than a month after Mr Drumm’s resignation and has since cost the State almost €30 billion, helping to push Ireland into an international bailout in 2010.

Mr Drumm has been embroiled in a lengthy, hard-fought bankruptcy case with his former bank over debts of €8.5 million, due mostly on borrowings to buy shares in Anglo that are now worthless.

Following a six-day trial in Boston in May and June of last year, a US bankruptcy judge found in favour of the bank, denying Mr Drumm a discharge from bankruptcy that would have freed him from his debts.

The judge ruled that Mr Drumm knowingly and fraudulently failed to disclose more than € 1 million in a series of asset transfers to his wife Lorraine that began as Anglo was edging towards collapse.

Judge Frank Bailey held up 30 objections made by Irish Bank Resolution Corporation, formerly Anglo, about why Mr Drumm should not be entitled to a debt-free financial start, finding the former banker "not remotely credibly."

“Drumm statements to this court were replete with knowingly false statements, failures to disclose, efforts to misdirect and outright lies,” the judge said in a blistering 122-page judgment.

Mr Drumm has lodged an appeal against that ruling and is awaiting the finding of the US District Court on the appeal.

x-ref to extradition process news, background, and timelineon pg 2

Simon Carswell

Simon Carswell

Simon Carswell is The Irish Times’s Public Affairs Editor and former Washington correspondent

Conor Lally

Conor Lally

Conor Lally is Security and Crime Editor of The Irish Times