FBI quizzes suspected rogue trader over lost £500m

Published on Thursday 7 February 2002 00:00

A FOREIGN exchange trader who allegedly defrauded a US subsidiary of Allied Irish Banks of around £500 million has met voluntarily with the FBI and federal prosecutors, his lawyer said today.

There were reports that John Rusnack - said to be a church-going family man who did voluntary work - was missing and could be on the run. But his lawyer Bruce Lamdin said: "My client is not a fugitive. We hope that things will take their natural course from here. That’s up to the US attorney’s office."

Mr Lamdin said no charges had been brought against 37-year-old Mr Rusnak, of Baltimore .

Officials at Allfirst bank acknowledged yesterday that they do not know how the alleged fraud happened. Allied Irish chief executive Michael Buckley said: "We are hugely disappointed that our Allfirst control procedures failed to uncover this situation at an earlier stage.

"The investigation now underway will determine not only how it arose but also how we can guard against any recurrence."

Five employees in the Allfirst’s treasury department have been suspended, including Mr Rusnak. London banks suspended foreign exchange dealings with Allied Irish as the Dublin-based bank struggled to explain how its auditors could have missed such a large-scale fraud.

Renowned rogue trader Nick Leeson claimed today there were "striking similarities" between the suspected bogus deals at Allied Irish Banks’ US subsidiary and his own 1995 scandal in Singapore. The former trader said : "I find it very frightening that such a thing can happen again because it means the same levels of incompetence and negligence within the mid and senior levels of the bank are still there."