New Zealand’s Ian Taylor: Helping Ireland’s Biggest Bankrupt To Hide Assets?

In 2008, Sean Quinn was Ireland’s richest man, with an estimated fortune of EUR4Bn. By January 2012, he was bankrupt, owing Anglo-Irish Bank EUR2.3Bn.

That’s a classic boom and bust story all by itself, but the entanglement with Anglo-Irish Bank goes much deeper than that. The BBC reports:

The family of Fermanagh businessman Sean Quinn have begun a legal challenge to a claim they owe the former Anglo Irish Bank over 2.3bn euros.

At a hearing in Dublin, lawyers for Mr Quinn’s family said the bank had engaged in “serious illegal activity on a persistent and ongoing basis”.

The preliminary hearing is taking place at Dublin’s Commerical Court.

If Mr Quinn’s wife and children lose, they could follow Mr Quinn into bankruptcy.

The court heard that between October 2005 and July 2007 Sean Quinn had built up a 28% stake in the former Anglo using contracts for difference – a financial instrument used to gamble on the bank share price.

When senior executives at the bank learnt of this “colossal interest” in September 2007, a system was set up whereby money was loaned to the Quinn group to support this share position.

So Quinn, who was financed by Anglo-Irish Bank, was buying a large stake, geared by CFDs, in… Anglo Irish Bank. Well, despite Quinn’s lawyer’s hopes, I don’t think that revelation is going to help Quinn all that much. It certainly hasn’t helped Sean FitzPatrick, former Chairman and CEO of Anglo-Irish bank:

Former Anglo Irish Bank chairman and chief executive Sean FitzPatrick is to go on trial accused of unlawfully helping to back a group of investors – including members of Sean Quinn’s family – to buy shares in the financial institution in 2008.

The 64-year-old had been questioned previously during a three-and-a-half year probe by detectives from the Garda Bureau of Fraud Investigation attached to the Office of the Director of Corporate Enforcement (ODCE) into alleged financial irregularities at the failed bank.

The multi-millionaire, with an address at Camaderry, Whitshed Road, Greystones, Co. Wicklow, stepped down in December 2008.

Anglo was subsequently nationalised and re-branded the Irish Bank Resolution Corporation (IBRC) with its collapse costing Irish taxpayers about €30bn.

Meanwhile the IBRC is trying to recover such assets as it can from the debtors of the former Anglo-Irish Bank. It ran into such difficulties with one particular debtor that it has had to resort to a worldwide search for the missing assets. That one particular debtor, naturally enough, is Sean Quinn:

The former Anglo Irish Bank is attempting to seize all the Irish and global assets of the daughters and sons-in-law of bankrupt businessman Sean Quinn.

Anglo, now known as the IBRC, said the Quinns cannot be trusted to comply with court orders not to strip valuable assets from the family’s €500m (£400m) International Property Group (IPG).

The court orders already issued against members of the Quinn family freeze their bank accounts and restrict them to €2,000 (£1,600) a week for expenses.

Last month, the High Court in Dublin froze the assets of Fermanagh native Mr Quinn’s children: Aoife, Ciara, Colette, Brenda and Sean Jnr.

Mr Quinn’s nephew, Peter Darragh Quinn, the former head of IPG, and sons-in-law Stephen Kelly and Niall McPartland, were also ordered not to reduce their assets below €50m (£40m).

But yesterday the IBRC went back to the Irish court to ask permission to seek orders appointing receivers over the worldwide assets. The request, if approved, would result in the Quinns losing control over all of their personal assets.

Well, maybe it will have that result. It depends where the worldwide receivers are looking for the assets. The signs are that it might be a bit tricky:

THE global hunt for what’s left of Sean Quinn’s fortune has switched to a tax haven chain of tropical islands in the South Pacific.

Financial investigators hired by the former Anglo Irish Bank were dispatched to Vanuatu last week, in what could prove to be a “critical stage” in its efforts to track down the fallen tycoon’s foreign assets.

It was alleged that Sean Quinn, his son Sean Junior and his nephew Peter conspired to put €455m — tied up in the family’s overseas property portfolio — out of reach, rather than repay the bank. Anglo, now known as Irish Bank Resolution Corporation (IBRC), has been engaged in more than 40 legal actions across the world in an attempt to trace the assets.

A source close to the financial investigation says their inquiries have now reached a “critical” stage.

The investigation is headed by Risk Management International, a private investigation firm, in conjunction with the Kroll agency in London.

The team was in Australia and New Zealand last week, and it is believed the link to Vanuatu was unearthed during investigations in Sydney and Melbourne.

A source close to the investigation told the Sunday Independent that RMI and Kroll are working around the clock to track down the Quinn assets that are now owed to the taxpayer. “We have reached a critical stage,” the source said. “There are tens of millions in cash missing.”

Aficionados of my series of posts on New Zealand, if any survive, will at this point have an ‘aha’ moment. Australia is rogue incorporator Ian Taylor’s current country of residence, New Zealand is his last one, and Vanuatu is where many of his shell companies were incorporated (see here and here).

It seems unlikely that there are two large scale asset hiders active in exactly these locations. So it must be a reasonable bet that RMI and Kroll have been talking to Ian Taylor. Evidently he didn’t tell them that he moved his legacy operation to Malaysia at the end of 2010, (details here and here), otherwise they’d be looking there too.

So that’s my tip to RMI and Kroll, if they have been talking to Ian Taylor, and come up empty-handed from their trip to Australia, New Zealand and Vanuatu: try Malaysia.

UPDATE: belter of a link from commenter OMF. The Ukraine connection is another trait shared with Ian Taylor operations.

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  1. OMF

    So, it appears that the Quinn clan had deals with other operators in addition to the Ukrainian Mafia in their attempts to lauder money. It wouldn’t surprise me if the connections stopped with Taylor. There’s already been Jersey and Bermunda connections to my knowladge.

    It’s worth mentioning that Peter Quinn—on legal advice—fled to Northern Ireland to escape a contempt of court sentence in the Republic, having been caught on tape(see link) saying that he wouldn’t have a problem lying in court. The Quinns are willing to go to absolutely any length to hold on to their money. It’s an interesting case.

    The economist Morgan Kelly in a speech on the Irish financial crisis in Kilkenny last August, made remarks of the banks giving loans to “Border businessmen… using that word in almost its Russian sense”. Indeed, there is little doubt that the Quinns are as ruthless a shower of operators as you are likely to come across. Border is the right word for it: For all the GAA matches he attends, Quinn ran first to the UK to declare bankruptcy, just as his newphew ran from justice, and just as the clan sloshes assets and deals back and forth between jurisdictions.

    In addition to the usual business chicanery, Sean Quinn’s typical strategy was to sharply undercut his rivals and buy out the market in a number of areas. The rumor for a long number of years was that money was being laundered for the IRA across the Fermanagh border. There have also been a number of arson attacks against recievers appointed to Quinn group companies. The Quinns have a huge public following along the border area and several “vox pop” calls have been made to irish radio stations in the last few weeks supporting the crooked clan wholeheartedly.

    As an Irish citizen, I am beyond disgusted by the behaviour of the Quinns, their supporters, and the ineptitude and lieniency of the courts when dealing with them. I am utterly and apoplectically enraged.

    I have considered now on several occassions driving up to Northern Ireland and dragging Peter Quinn back across the border to face sentencing here. It has occured to me to simply walk into the Quinn estate in Cavan and take from them whatever I please, just as the Quinns have stolen billions from the people of Ireland. I have had dark fantasies of arson and assault against a clan I feel has assaulted Ireland and its people and who our incompetant justice system has effectively made exempt from the rule of law.

    For now though, my reason (or perhaps it is simply cowardice) has prevailed. I know full well that it would be I, not the Quinns, that the force of the “law” would be heaped on. I also have still some small, shrivelled glint of hope that maybe, just maybe, justice will be done in the Irish Courts. But my head knows better; the Quinns will escape with minimal fines and sentences, their debts will be written off, and in 10 years times the €100,000 bags of cash they’ve stored in the Ukraine will set them back on track to buying up a bank or two, or perhaps even Nama.

    I’ll probably have emigrated by then.

  2. foppe

    The court heard that between October 2005 and July 2007 Sean Quinn had built up a 28% stake in the former Anglo using contracts for difference – a financial instrument used to gamble on the bank share price.

    When senior executives at the bank learnt of this “colossal interest” in September 2007, a system was set up whereby money was loaned to the Quinn group to support this share position.

    It is a strange world we live in, filled with people who can apparently rationalize pretty much everything they do.

    1. OMF

      Actually, the revelation that Quinn has amassed 25%+ of the banks share through CFDs was apparently the only thing that ever stunned Anglo’s Chairman Sean Fitzpatrick into silence. The loans were an effort to try to get Quinn to unwind his position in the bank, but as it turns out, Quinn just bought even more shares with the money. And why not?

      (The broker held CFDs were in fact instrumental in the downfall of Anglo and to some degree the Irish banking system. Quinn’s brokers happily shorted the blue bejasus out of the shares while waiting on Quinn’s payment. And why not?)

      Interesting that the Ukraine link alos connections to Ian Taylor. It would be interesting to know if share schemes and/or bank share loan deals also have a New Zealand connection?

      1. Richard Smith Post author

        It is a wonderful merrygoround isn’t it, that CFD position?

        I have never seen anything like it.

        The brokers on the short side must have chuckled, as long as they could cope with the carry on the short. Any idea who they were?

        I do also wonder whether the start of the asset hiding actually goes a lot further back than Quinn noticing he was about to go bust. It would be a nice tax dodge.

        I don’t know the answer to your last question but I imagine that Kroll or BMI probably do.

        1. OMF

          The brokers on the short side must have chuckled, as long as they could cope with the carry on the short. Any idea who they were?

          Apparently Davy stockbrokers (“Davys” major Ire broker), Bear Stearns, IG Index and Credit Suisse. The CFDs were done through some Maderia registered company, which under the advice of PWC was owned by the Quinn children. I’m sure it gets even more complicated later on.

          Be aware that in order to truly get to the bottom of the Quinn family, you’d probably have to go back to the mid 1960s and be a quasi-expert in All-Ireland politics and modern history. The financial stuff probably wouldn’t go back farther than the introduction of the euro through— probably. Fairly warned be ye.

        2. LeonovaBalletRusse

          RS, isn’t Kroll on the inside of everything? Don’t they sell protection?

  3. The Dork of Cork

    After 1987 any token efforts to build Irish core internal productive capacity that was not dependent on external capital flows was given up.

    It had to come to this – what else could happen ?

    Ireland is now a non place – its a sponge where capital & Labour soaks in and capital flows out with the guys doing their masters bidding getting a cut.

    Ireland was never a state in any real meaning to the term …its just in a state.
    The EU council for example quite rightly does not refer to this bog as a Republic -preferring the French characterisation of us as a colony of the city and indeed in my darker moments I think the Irish anti – State experiment was the cities experiment.

    Its a large estate nothing more ….more often then not very badly run by the landlords agents.

    Even after all this time (5 years now) not one cry of we don’t have oil but we have ideas…..just how much can we flog some NAMA ditches for ?

    I don’t know what to say.
    What must the Icelanders think of us ?

    1. OMF

      The Anglo Irish executive were all let out on bail of €1000 within half of hour of the charges being read. You’d get harsher treatment for stealing a bad of m&m’s and people often do. The reality is that the Irish courts are even more unwilling to prosecute white collar crime than the US courts.

      Moreover, the Irish court system is totally unequipped to investigate and uncover the kind of global money laudering being seen these days. They couldn’t prosecute if they wanted to in most cases. Be thankful that the US can still muster the resources, expertiese, personel and clout to conduct the kind of investigations needed to deal with modern financial crime. The only problem now is prodding the state into doing a little mustering.

  4. The Dork of Cork

    They are planning more Irish tax hikes to pay the interest on the sovergin debt incurred to bail out the bank bondholders……therefore they need some meat to throw at
    the masses to make this politically acceptable.

    Guys like Seanie were the mere Lucky bag men – this goes straight into the heart of the bankster infested treasuries and the now symbiotic parasitic commercial banking big sisters – the Central Banks.

    Ever since Cromwell there is a class of Irish men who serve hidden masters

    Sutherland and his ilk are the true enemy here – Seanie and the lads are mere leprechauns.
    The London boys thought quite rightly he was a Joke back in 2007/8

  5. Dirk77

    Just want to say I’ve found this series fascinating. Perhaps at the great Euro Union garage sale of 2022, Iceland will pick up Ireland for cheap, spend a few dollars and set it right.

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