John Rusnak Faces 30 Years For Bank Fraud

by Philip Morton, Investors Offshore.com

10 June 2002

Rogue trader John Rusnak, who allegedly defrauded AIB's US Allfirst operation out of around $691 million over five years, was last week accused of seven counts of bank fraud, entering false information in records, and aiding and abetting.

Speaking at a news conference after Mr Rusnak's appearance before Judge Beth P. Gesner on Wednesday, US Attorney, Thomas Di Biagio revealed that the former foreign exchange trader could face 30 years in prison and fines of up to $7 million if convicted. He stands accused of circumventing bank controls and covering his tracks with a 'multilayer pattern of deceit'.

It is not known whether others are under scrutiny in connection with the FBI investigation, although six of Mr Rusnak's co-workers and supervisors were dismissed alongside him for failing to spot the massive losses occurring between 1997 and 2001.

The FBI investigation has revealed that the Allfirst trader used several tricks and techniques in order to deceive his employers and fellow employees, including a post box and fictitious name in New York, and 'deep-in-the-money' loans taken to cover his losses.

According to a report in the Irish Independent last week, an external report also revealed that the trader was 'arrogant and abusive' to co-workers, and took advantage of the inexperience of others. He gambled - correctly, as it turned out - that staff were unlikely to check deals made with his bogus Asian contacts, as this would require making phone calls in the middle of the night, and intimidated back office workers who questioned his trades.

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