Worries about money-laundering proved justified

 

In the summer of 1997 the McCracken (Dunnes Stores) Tribunal held several hearings in London where senior executives of the Henry Ansbacher group were questioned.

Mr Peter Greenhalgh was asked about Henry Ansbacher buying Guinness Mahon Cayman Trust, subsequently Ansbacher Cayman. "I think initially we had bought, effectively, an Irish operation," he said.

Mr Greenhalgh said he was concerned about the secretive Ansbacher deposits structure, which was already in place. He questioned the late Mr Des Traynor about the possibility of money from drugs or terrorism being passed through the deposits.

"I remember he said to me on one occasion, `I know all about this money-laundering. You don't need to worry about this. These transactions are all right. The clients are known to me and you may be sure we would not put transactions through you which would give rise to money laundering considerations'."

From yesterday's evidence from the Moriarty tribunal, it is now obvious Mr Greenhalgh should not have accepted Mr Traynor's reassurances in relation to money-laundering. But more of that later.

The London hearings were told that the Cayman bank's assets at the time of the 1988 purchase were about £114 million. When discussing banks, assets mean loans and debts mean deposits. The two are usually roughly equivalent.

Yesterday the Moriarty Tribunal heard that in the late 1980s the Cayman Bank had £70 million sterling on deposit with Guinness Mahon bank, the London parent of Guinness & Mahon bank, Dublin.

It is already known there was £38 million on deposit with the Dublin bank in 1989, making a total of more than £100 million.

From everything we have heard in the past three years, it would seem that the bulk of this money belonged to Irish individuals and residents who were hiding funds from the Revenue.

Much of the cash was under the control of offshore trusts, but other funds had been invested in shares and, quite possibly, property. This money would not be included in the £100 million on deposit. There were further funds on deposit through other subsidiaries in the Channel Islands.

In September of last year the High Court was told, during a successful application for the appointment of inspectors to Ansbacher Cayman, that when cash deposits and other investments were put together, "it is likely the total assets . . . may have been of the order of a few hundred million."

The whole scheme was the work of the late Mr Traynor, two Cayman bankers, Mr John Collins and the late Mr John Furze, and Mr Traynor's assistants in Dublin, Mr Padraig Collery and Ms Joan Williams.

The tribunal was told yesterday that Mr Traynor was brought into Guinness & Mahon bank by the late Mr John Guinness, because it was felt that with his reputation and his "blue chip" contacts, he would attract a lot of new business.

Looking after his private clients was one of Mr Traynor's main roles in the bank, and the whole offshore network established after his arrival in the bank was "his baby," according to former Guinness & Mahon executive Mr Martin Keane.

As well as friends and associates of the late Mr Traynor, the system was also used by Frederico and Andres Pruna, two Florida-based drug smugglers.

The Pruna brothers were introduced to the Dublin bank by Mr Furze, and during the 1980s received loans of up to $3 million which were in turn backed by lodgments in the Cayman bank.

Mr Furze was also involved in the organisation of bogus loans, and in facilitating the deeds of a US property belonging to the brothers being placed in the name of a Guinness & Mahon nominee company, Mars Nominees Ltd.

All of this was by way of facilitating the subsequently convicted criminals in laundering money.

Whether Mr Furze and Mr Traynor knew the source of the brothers' wealth is unclear. But what is clear is that when the US authorities tried to establish what had happened, erroneous information was passed to them concerning the brothers' dealings with the Dublin bank.

Mr Traynor's reputation has fallen a long way in the past three years.