7 years' jail for AIB trader David Teather in New York and Jill Treanor Saturday January 18, 2003 The Guardian
The rogue currency trader who covered up trading losses of $691m (�430m) at a division of Allied Irish Banks was yesterday sentenced to seven and a half years in prison. John Rusnak, who worked for Baltimore-based business Allfirst Financial, pleaded guilty to the fraud in October last year. He told a US judge yesterday he was "very sorry" and wanted to accept full responsibility for his role in the one of the biggest banking scandals in history. Rusnak, 38, has also been ordered to pay compensation of $1,000 a month for five years after his release. He said he would begin the jail term "without any bitterness" and pledged to "try to make restitution, both financially and by being a better person in the future". The sentence is a year longer than that given to Nick Leeson, the futures trader who brought down the venerable Barings Bank by racking up losses of $1.4bn. Leeson was released in 1999 after serving just three and a half years in a Singapore jail, his sentence shortened for good behaviour. The tougher sentencing reflects a climate which, during the past year, has become less tolerant of white collar crime - particularly in the US. "He's not going to a country club," said US attorney Thomas DiBiagio. "He's going to jail with the bank robbers, drug dealers and other criminals, because that's what he is." Mr DiBiagio said Rusnak had been addicted to the "high stakes gamble" of currency trading. The judge also sentenced him to undergo five years of supervised drug, alcohol and gambling counselling. Prosecutors said Rusnak had created fictitious computer files to give the impression that he was making money. He received bonuses of $650,000 over the period from 1997 to 2002 during which he concealed the losses. He ran up the losses at Allfirst mostly from trading in Japanese yen. As he dug himself into a deeper hole, he began to take bigger risks, prosecutors said. He created a false identity under the name David Russell and used an address in New York to send confirmations of false trades. A spokeswoman for AIB welcomed the jail term. "We said at the outset that this was a complex and sophisticated fraud. This sentence endorses that conclusion," she said. Discovery of the fraud encouraged AIB to sell Allfirst to New York-based financial services group M&T Bank Corporation last September for more than $3bn. Rusnak could have faced a far higher sentence but agreed to a deal with prosecutors in October. Federal authorities have the power to seize his assets and later to take any large sums of money he might make from book royalties or other enterprises based on his experiences at the bank. Allfirst has 300 branches and is among the top 50 banks in the US. But it seems unlikely Rusnak will attain the notoriety of the swaggering Leeson, whose book, Rogue Trader, was made into a film starring Ewan McGregor and Anna Friel. Rusnak was described as a churchgoing "Mr Middle America" from Pennsylvania. He had provided few clues to his double life. He was among the lower to middle-ranking staff at Allfirst, where he had worked for seven years on $85,000 a year. He has a wife and two children, was on the local school board and lived in an affluent Baltimore suburb.
