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Ex-Allied Irish Trader Rusnak Indicted in Scam

June 06, 2002|From Reuters

Former currency trader John Rusnak was named in a seven-count indictment for his alleged role in a trading scam that landed Allied Irish Banks in one of the biggest scandals in recent banking history, prosecutors said Wednesday.

Rusnak was charged after four months of investigation into $691.2 million in losses, which Rusnak allegedly racked up by executing unauthorized trades while employed by AIB's U.S. subsidiary, Allfirst Financial Inc.

Each count of the indictment, which charges Rusnak with defrauding the bank and with entering false entries into bank records, but not with receiving any of the funds that make up the loss, carries a maximum penalty of 30 years in prison, $1 million in fines and up to five years of supervised release after imprisonment.

The indictment charges Rusnak with defrauding Allfirst and its predecessor, First National Bank of Maryland, out of $850,000, his salary and bonuses from 1997 through 2001.

Rusnak surrendered to the FBI on Wednesday morning at his initial appearance before U.S. Magistrate Judge Beth Gesner and was released on his own recognizance.

His arraignment has not yet been scheduled.

The scandal, one of the largest to engulf a European bank since Britain's Barings Bank collapsed in 1995, stunned the financial community in February as AIB executives blamed Rusnak for fraud and deception dating back five years.

In the meantime, he earned annual bonuses of $200,000 and moved his family into an opulent 19th century home in one of Baltimore's exclusive neighborhoods.

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