BALTIMORE -- Ireland's biggest bank on Wednesday accused a currency trader at its Baltimore subsidiary of stealing $750 million in what could be the largest such scam since a rogue employee brought down England's Barings Bank in the mid-1990s.
John Rusnak, 37, is suspected of defrauding Allfirst, the U.S. subsidiary of Allied Irish Banks where he worked in the treasury department. He was not charged by authorities, but lawyers said he met voluntarily with the FBI and federal prosecutors Wednesday afternoon.
"My client is not a fugitive," attorney Bruce Lamdin said. "We hope that things will take their natural course from here. That's up to the U.S. attorney's office."
News of the scam sent financial stocks lower across Europe, led by Allied Irish. Analysts said if such a conservative, well-run bank could suffer such a breach of security, almost any bank could.
Outsiders involved
Five treasury workers at the bank have been suspended, including Rusnak. Allied Irish said people outside the bank may also have been involved in the scam.
"We are hugely disappointed that our Allfirst control procedures failed to uncover this situation at an earlier stage," Allied Irish chief executive Michael Buckley said in Dublin. "The investigation now under way will determine not only how it arose but also how we can guard against any recurrence."
Buckley said it was not clear whether Rusnak pocketed some or all of the missing money.
Bank officials described Rusnak as a married father of two who has worked at Allfirst for seven years. They said he was paid $85,000 a year, a modest amount for a currency trader with his experience.
Officials at the U.S. Attorney's office said they were investigating Rusnak and the FBI confirmed that it was looking into missing money at Allfirst.
Rusnak has not shown up for work this week and bank officials said he would be fired if he did. Lamdin, the attorney, said Rusnak is in Baltimore, but is avoiding his home because of the reporters and photographers camped outside.
The case has stirred memories of Nick Leeson, the Singapore trader who destroyed Barings Bank by piling up $1.4 billion in concealed losses. The case prompted banks worldwide to tighten internal checks and balances.
"It is a heavy blow, but I want to make the point very clearly that it's a blow we will recover from," Buckley said.
Allied Irish said the scam involved forged purchasing records for options contracts, starting early last year.
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