BOSTON (Reuters) - The former head of Anglo Irish Bank must remain in custody ahead of a bail hearing while a U.S. court decides whether to send him back to Ireland to face 33 criminal counts related to his role in the bank’s collapse, a U.S. judge ruled on Tuesday.
The executive, David Drumm, was arrested on Saturday in the tony Boston suburb of Wellesley, where he had been living since the bank was nationalized in early 2009.
Drumm, the bank’s former chief executive, was escorted into U.S. District Court in Boston on Tuesday in handcuffs, wearing a blue dress shirt, no tie and dark trousers. He did not speak during the brief proceeding other than to greet the judge.
His attorney, Tracy Milner, said she would be asking for Drumm to be released on bail at a Friday hearing and indicated that he planned to challenge the extradition proceeding.
“There are additional considerations on extradition, such as whether it is being done for a political purpose,” Milner said.
Magistrate Judge Donald Cabell said he would consider the bail request but noted that “in extradition proceedings there is a presumption towards detention.”
Following the hearing, Milner questioned why Drumm was arrested on the first day of the U.S. Columbus Day holiday weekend.
“We’re going to see if we can get him released. It was outrageous that he was picked up on the Saturday of a three-day weekend,” she said.
An Irish court in July sentenced three lower-ranking executives of the bank to serve 18 to 36 months in prison, making them the first bankers jailed since the country’s financial crash. [nL5N10B3BH]
Anglo Irish’s failure, linked to casino-style lending that drove Ireland’s “Celtic Tiger” boom, cost the state 30 billion euros ($34 billion) in bailout funds.
Drumm faces charges in Ireland related to fraudulent loans the bank made in 2008 intended to help prop up its share prices, which was falling sharply during the global crisis, according to papers unsealed in Boston on Tuesday.
The charges include forgery, conspiracy and false accounting, for loans to the family of businessman Sean Quinn, who had amassed a 28 percent share in the bank through contracts for difference, a financial instrument that did not have to be publicly declared.
The bank lent Quinn’s family hundreds of millions of euros to help it cover margin calls on the shares he held.
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