RECORD NUMBER: 1999 /163 COS

THE HIGH COURT

IN T H E M A T T E R O F THE COMPANIES ACTS 1963 to 1990

A N D IN T H E M A T T E R O F P A R T II O F T H E COMPANIES ACT 1990 A N D SECTIONS 8 A N D 17

A N D IN T H E M A T T E R O F A N S B A C H E R ( C A Y M A N ) L I M I T E D

(formerly G U I N N E S S M A H O N C A Y M A N T R U S T L I M I T E D ,

A N S B A C H E R L I M I T E D and C A Y M A N I N T E R N A T I O N A L B A N K A N D T R U S T C O M P A N Y

LIMITED)

R E P O R T OF THE INSPECTORS
A P P O I N T E D TO E N Q U I R E I N T O T H E
AFFAIRS OF A N S B A C H E R (CAYMAN)
LIMITED

Published by Order of the Court made on 24 June 2002

VOLUME [1]: REPORT

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© Government of Ireland 2002

 REPORT
OF THE INSPECTORS
APPOINTED TO ENQUIRE
INTO THE AFFAIRS OF
ANSBACHER (CAYMAN) LIMITED
 CONTENTS
Page

Preface 5

Glossary 7

PART I: INTRODUCTION AND BACKGROUND 11

Chapter 1: Background to the appointment of Inspectors 12

PART II: ANSBACHER (CAYMAN) LIMITED - DESCRIPTION OF

ITS IRISH BUSINESS AND THE WRONGDOING INVOLVED 23

Chapter 2: Evolution of the Irish business of Ansbacher (Cayman)

Limited 24

Chapter 3: The services offered by Ansbacher (Cayman) Limited

and the policy of concealment in operation 42

Chapter 4: The extent of the Irish business of Ansbacher (Cayman)

Limited 65

Chapter 5: The wrongdoing of Ansbacher (Cayman) Limited 80

Chapter 6: Responsibility - Officers and Agents 100

Chapter 7: Responsibility of Mr Desmond Traynor 106

Chapter 8: Responsibility of Mr John Furze 120

Chapter 9: Responsibility of Mr John Collins 130

Chapter 10: Responsibility of Guinness and Mahon 139

Chapter 11: Responsibility of Guinness Mahon London 142

Chapter 12: Responsibility of Henry Ansbacher Holdings plc 149

Chapter 13: First National Bank of Southern Africa Limited 165

PART IV: ASSISTING ANSBACHER (CAYMAN) LTD 168

Introduction to Part IV 169

Chapter 14: Assistance provided by Guinness and Mahon 170

Chapter 15: Assistance provided by CRH plc 173

Chapter 16: Assistance provided by Bank of Ireland Private Banking

Limited 190
Chapter 17: Assistance provided by Mr Padraig Collery 194

Chapter 18: Assistance provided by Ms Joan Williams 214

Chapter 19: Assistance provided by Mr Sam Field-Corbett 218

Chapter 20: Assistance provided by Mr Jack Stakelum 222

Chapter 21: Assistance provided by IIB 236

PART V: THE CLIENTS OF ANSBACHER (CAYMAN) LIMITED 266

Chapter 22: Identification and categorisation of the clients of

Ansbacher (Cayman) Ltd 267

Chapter 23: List of clients of Ansbacher (Cayman) Ltd 279

PART VI: RELATED MATTERS 432

Introduction to Part VI 433

Chapter 24: Hamilton Ross Company Limited (1992 to early 1997) 434

Chapter 25: The role of the Central Bank 449

Chapter 26: Exchange Control 474

Chapter 27: The role of the auditors of Guinness and Mahon 477

Chapter 28: Persons who failed to co-operate with the Inquiry 482

PART VII: SUMMARY OF CONCLUSIONS 486

Chapter 29: Summary of Conclusions 487

 List of Appendices

I XV (12) XV (37) XV (62) XV (87) XV (112) XV (137) XV (162)

II XV (13) XV (38) XV (63) XV (88) XV (113) XV (138) XV (163)

III XV (14) XV (39) XV (64) XV (89) XV (114) XV (139) XV (164)

IV XV (15) XV (40) XV (65) XV (90) XV (115) XV (140) XV (165)

V XV (16) XV (41) XV (66) XV (91) XV (116) XV (141) XV (166)

VI XV (17) XV (42) XV (67) XV (92) XV (117) XV (142) XV (167)

VII XV (18) XV (43) XV (68) XV (93) XV (118) XV (143) XV (168)

VIII XV (19) XV (44) XV (69) XV (94) XV (119) XV (144) XV (169)

IX XV (20) XV (45) XV (70) XV (95) XV (120) XV (145) XV (170)

X XV (21) XV (46) XV (71) XV (96) XV (121) XV (146) XV (171)

XI XV (22) XV (47) XV (72) XV (97) XV (122) XV (147) XVI

XII XV (23) XV (48) XV (73) XV (98) XV (123) XV (148) XVII

XIII XV (24) XV (49) XV (74) XV (99) XV (124) XV (149)

XIV XV (25) XV (50) XV (75) XV (100) XV (125) XV (150)

XV (1) XV (26) XV (51) XV (76) XV (101) XV (126) XV (151)

XV (2) XV (27) XV (52) XV (77) XV (102) XV (127) XV( 152)

XV (3) XV (28) XV (53) XV (78) XV (103) XV (128) XV (153)

XV (4) XV (29) XV (54) XV (79) XV (104) XV (129) XV (154)

XV (5) XV (30) XV (55) XV (80) XV (105) XV (130) XV (155)

XV (6) XV (31) XV (56) XV (81) XV (106) XV (131) XV (156)

XV (7) XV (32) XV (57) XV (82) XV (107) XV (132) XV (157)

XV (8) XV (33) XV (58) XV (83) XV (108) XV (133) XV (158)

XV (9) XV (34) XV (59) XV (84) XV (109) XV (134) XV (159)

XV (10) XV (35) XV (60) XV (85) XV (110) XV (135) XV (160)

XV (11) XV (36) XV (61) XV (86) XV (111) XV (136) XV (161)

Note: THIS PAGE DOES NOT FORM PART OF THE INSPECTORS' REPORT BUT, WITH THE

CONSENT OF THE HIGH COURT, HAS BEEN INCLUDED IN THE COPY AUTHORISED TO BE

PUBLISHED BY ELECTRONIC MEANS TO FACILITATE NAVIGATION WITHIN THE TEXT.

Preface
The Inspectors appointed by the High Court to examine the affairs of Ansbacher
(Cayman) Limited present herewith their Report In doing so, they wish to draw
particular attention to a number of matters.

Firstly, they wish to stress that a finding by them that any particular person is a client of
Ansbacher is not to be taken as afinding that that person has evaded tax. This matter is
explained further in Chapter 22, and the Inspectors urge the readers of this Report to pay
particular attention to the explanation given in that chapter.

Secondly, the Inspectors are conscious that during the greater part of the period in which
the events related in this Report took place, the company under investigation did not bear
the Ansbacher name. Therefore, when referring to the company, the Inspectors have
attempted to refer to it by the name it was known by at any given period. So it is that the
reader will find the company referred to on some occasions as 'GMCT' (Guinness
Mahon Cayman Trust) the name by which it was known until its acquisition by the Henry
Ansbacher Group of companies in 1988. On other occasions, it isreferred to simply as
'Ansbacher' a convenient shorthand for Ansbacher (Cayman) Limited, the company's
present title.

Thirdly, readers of the Report willfind a certain amount of repetition throughout This is
deliberate, so that as many of the chapters as possible can be read as self-contained units,
without the need for cross-reference to other sections of the Report.

Finally, the Inspectors thank the staff who assisted them in their work, and without whom
it would not have been possible to bring it to a completion. In particular, they wish to
express their thanks to Frances Gaynor, Assistant Principal Officer who acted as
Secretaiy to the Inspectorate, to Mary Cummins of the Chief State Solicitor's Office who
acted as their Solicitor, to Tom Slevin and Padraig McGoldrick, Accountants, to Liam
Bowen, Higher Executive Officer and to the following, who acted as members of the
 Bowen, Higher Executive Officer and to the following, who acted as members of the
secretariat at different times: Susan Troy, Deborah Tyson, Anne Bevan, Breege O'Reilly,
Declan Keegan, Maiy Farrell, Teresa Noonan, Tracey Mc Govern.

The Inspectors would like to record their thanks to their team of advisors: Mr Jim
O'Hara, FCA, Mr Frank Clarke SC, Mr Shane Murphy SC, Mr Lyndon MacCann BL, Mr
Fintan J O'Connor BL, Mr Antonio Bueno QC, Mr Charles Quin and Mr Hector
Robinson of Quin & Hampson, Barristers and Attorneys at Law in the Cayman Islands
and Oslen Ferbrache Morgan, Advocates in Guernsey.

The Honourable Mr Justice Declan Costello was one of the original Inspectors appointed
by the High Court Order of 22 September 1999. He retired on the grounds of iHhealth
towards the end of the year 2000. His retirement was an immense loss to the work of the
Inspectors. They thank him for having done so much to shape their procedures
and recognise his very significant contribution to the investigation.

June 2002

His Honour Judge Sean O'Leary

Mr Paul Rowan F.C.A. Mr Michael CushS.C.

 GLOSSARY OF TERMS

Amiens
'Amiens' means either Amiens Investments Limited or Amiens Securities Limited which were companies
set up by Mr Traynor to facilitate, in Ireland, lodgments to and disbursements from the Ansbacher
memorandum accounts.

Ansbacher
'Ansbacher' means Ansbacher (Cayman) Limited, formerly known as Guinness Mahon Cayman Trust
Limited, Ansbacher Limited and Cayman International Bank and Trust Company Limited.

Client
For the puxposes of their investigation and having regard to the contentsof the Order of the High Court
dated the 22 September 1999, the Inspectors consider a person to be a 'client' of the Ansbacher (Cayman)
Limited ('the Company') within the meaning of the Order if business was carried out for that person by the
Company in the State or, in the case of a person who is an Irish resident, if business was carried out for him
by the Company anywhere in the world.

In particular, but without prejudice to the generality of the foregoing, a client shall include:

a) Any person who directly or indirectly maintains or has maintained all or part of any account with
tiie Company or who has or had defecto or de jure control over all or part of any account with the
company.

b) Any person who has or had de jure or de facto control of a body corporate which directly or
indirectly maintains or has maintained an account with the Company or is or was administered by
the Company or which has had borrowings directly or indirectly secured wholly or partly by the
Company.

c) The Settlor of any trust administered by the Company or of which the Company is or was the
trustee and/or any other person or persons who funded such a trust or caused such a trust to be
funded.

d) The Beneficiary of any trust administered by the Company or of which the Company is or was the
trustee in circumstances where the beneficiary has or had de jure or defecto control ova- all or
part of the trust funds.
e) Any person who had an account relationship with a body corporate owned or managed by the
Company.

The expression 'account' shall include deposit accounts, loan accounts, securities accounts and custodial
accounts.

College Trustees
'College Trustees' means College Trustees Limited, a Guernsey incorporated limited liability trust
company which was formed in 1975 as a wholly-owned subsidiary of Guinness Mahon Channel Islands
Limited, which in turn was a wholly-owned subsidiary of Guinness and Mahon.

The Company
'The Company' means Ansbacher (Cayman) Limited, formerly known as Guinness Mahon Cayman Trust
Limited, Ansbacher Limited and Cayman International Bank and Trust Company Limited.

Considered adequate
'Considered adequate' see 'suitably secured'

CRH

'CRH' means CRH plc formerly known as Cement Roadstone Holdings plc.

GMCT

'GMCT' means Guinness Mahon Cayman Trust Limited, a former name of'Ansbacher'.

GMCI
'GMCI' means Guinness Mahon Channel Islands Limited a company which was formed in Jersey in 1974
to provide banking services, which was a wholly owned subsidiary of Guinness and Mahon.
Guinness and Mahon
'Guinness and Mahon' means Guinness and Mahon (Ireland) Ltd, formerly known as Guinness and Mahon
Limited.
Guinness Mahon London
'Guinness Mahon London' means Guinness Mahon & Company Ltd, London.
Hamilton Ross
'Hamilton Ross' means Hamilton Ross Company Limited, a company incorporated in the Cayman Islands,
in whose name accounts were opened in IIBfrom 1992 onwards. Some of the funds held in accounts in
Ansbacher's name in EB were transferred to the Hamilton Ross accounts. Ansbacher accounts in Guinness
and Mahon were re-named Hamilton Ross during the year 1992/93. Almost all Hamilton Ross accounts
were formerly Ansbacher accounts.

IIB

'IIB' means IIB Bank Limited formerly known as Irish Intercontinental Bank Limited.

The McCracken Tribunal

"The McCracken Tribunal' means the Tribunal of Inquiry (Dunnes Payments)

The Moriarty Tribunal

"The Moriarty Tribunal' means the Tribunal of Inquiry (Payments to Messrs Charles Haughey and Michael
Lowry).
Off-shore deposit
'Off-shore deposit' means a deposit of funds by a person in afinancial institution outside the State in which
he/she is residing.
Overseas Nominees Limited
'Overseas Nominees Limited' means the Cayman Island incorporated company providing nominee services
to its parent company Guinness Mahon Cayman Trust Limited.

Person

'Person' includes a corporate entity.

Poinciana Fund Limited

'Poinciana Fund Limited' means a company incorporated in the Cayman Islands, in whose name an
account was opened in Bank of Ireland, into which deposits of a number of individuals were lodged.
Poinciana Fund Limited was at all relevant times a company vehicle used for conducting Ansbacher
business.
Sovereign Management
'Sovereign Management' means Sovereign Management Limited, a company incorporated in Guernsey in
1974 which provided company and trust management services to College Trustees Limited.
Suitably secured/adequately secured or considered adequate
'Suitably secured' or 'adequately secured' or 'considered adequate': this terminology was used by the
officers and officials of Guinness and Mahon to describe loans that were secured (but not necessarily solely
secured) by fluids on deposit with a subsidiary of Guinness& Mahon outside the jurisdiction.
 PARTI

INTRODUCTION AND BACKGROUND

 CHAPTER 1

BACKGROUND TO THE APPOINTMENT OF THE INSPECTORS

INDEX

1.1 The Cayman Islands and the 'Dublin accounts' 13

1.2 Ansbacher (Cayman) Limited 14

1.3 The Report of the McCracken Tribunal 15

1.4 The Moriarty Tribunal 15

1.5 The Report of the Authorised Officer 15

1.6 The Order Appointing the Inspectors and the structure of this Report 16

1.7 The identification of possible breaches of Common Law and

Statutory Provisions, including Company Law. 17

1.8 The Work of the Inspectors 19

1.9 Those Assisting the Inspectors 21

CHAPTER 1

BACKGROUND TO THE APPOINTMENT OF THE INSPECTORS

1.1 The Cayman Islands and the 'Dublin accounts'

'There is a book of customer accounts ('Dublin accounts') which are operated and
controlled irt Dublin, Ireland by the Chairman of Ansbacher Limited. The Dublin
accounts are operated outside the regular internal control environment of Ansbacher
Limited...' So commences a 1992 management letter from the auditors to Ansbacher
(Cayman) Limited. The auditors were describing what have since become known
(somewhat incorrectly) to the people of Ireland as the 'Ansbacher accounts'. It is
important to bear in mind that the Company under investigation did not become the
responsibility of the Ansbacher group of companies until 1988. Up to that time, it
belonged to the Guinness Mahon group (except for a period of a few months when it
belonged to a consortium led by Mr Desmond Traynor) and was known as Guinness
1
Mahon Cayman Trust, or GMCT. The accounts might therefore more correctly be
called the 'GMCT accounts'. This Report attempts to tell the story of these accounts,
which involves the island of Ireland and the island of Grand Cayman, largest of the
Cayman Islands.

The Cayman Islands are situated off the coast of Florida in the Caribbean, 475 miles
south of Miami and 200 miles west of Montego Bay, Jamaica The Islands are a British
crown colony. However, for all practical purposes they are governed under a constitution
that gives executive and legislative power to a Governor, an Executive Council and a
Legislative Assembly. They therefore enjoy a large measure of self-government. Of the

1
The Cayman bank, which was originally called Guinness Mahon Cayman Trust (and later,
GMCT), did not change its name to 'Ansbacher Limited' until 1988. Itbecame Ansbacher (Cayman)
Limited only in 1994
three islands that make up the group, Grand Cayman is the largest and busiest, with a
flourishing banking industry. In Georgetown, the principal town of Grand Cayman,
stands Ansbacher House, the registered office of Ansbacher (Cayman) Limited.

1.2 Ansbacher (Cayman) Limited

Ansbacher (Cayman) Limited (which in this Report will be referred to simply as
'Ansbacher' or as 'GMCT', depending upon the period referred to) has had a number of
names in the course of its fairly short history. It was incorporated in the Cayman Islands
in 1971 as Guinness Mahon Cayman Trust Ltd, and was a subsidiary of the Dublin
merchant bank, Guinness and Mahon Limited.

The Cayman Islands were at that time part of the sterling area introduced into the United
Kingdom in 1939. However, in 1972, the sterling area was effectively dismantled. The
'scheduled territories', that is, those territories not subject to Exchange Control
legislation, were reduced to just the Channel Islands, the Isle of Man, Ireland and
Gibraltar. The Cayman Islands no longer formed part of the scheduled territories from
that time.

In 1973, GMCT had obtained a full class 'A' banking licence, which allowed it to
provide general banking services. In 1988, having been sold to Chichester Investments
Ltd, the name of the Cayman Company was changed to GMCT Ltd. Later in the same
year, the name Ansbacher was used for the first time, after the Company was called
Ansbacher Ltd by new owners. In November 1992, the name changed again to Cayman
International Bank and Trust Company Ltd. It was in September 1994 that the Company
assumed its current name of Ansbacher (Cayman) Ltd.
1.3 The Report of the McCracken Tribunal
The events giving rise to the appointment of High Court Inspectors into the affairs of
Ansbacher commenced in August 1997 with the publication of the report of the Tribunal
of Inquiry (Dunnes Payments), more popularly known as the McCracken Tribunal. That
report revealed for the first time the existence of what came to be known as the
'Ansbacher deposits' - monies lodged by Irish residents with Ansbacher and placed on
deposit by that company with Guinness and Mahon.

1.4 The Moriarty Tribunal

Following publication of the Report of the McCracken Tribunal, the Government
established a new Tribunal to investigate payments to politicians. This was entitled
'Tribunal of Inquiry (Payments to Messrs Charles Haughey and Michael Lowry), but is
popularly referred to as the Moriarty Tribunal. Both prior and subsequent to its
establishment, unsuccessful attempts were made in the Dail to broaden the terms of
reference of this Tribunal so as to allow it to investigate aspects of the Ansbacher
accounts other than possible payments to politicians from them.

1.5 The Report of the Authorised Officer

Section 19 of Part 11 of the Companies Act, 1990, ('the Act') provides that the Minister
for Enterprise, Trade and Employment ('the Minister'),2 may seek the production of
books and documents of companies under investigation, and may authorise an officer to
do so on her behalf. On 8 January 1998, the Minister, by warrant of appointment of that
date, authorised Mr Gerard Ryan to seek the production of Ansbacher's books and
documents. Mr Ryan reported to the Minister on 22 June 1999. As a direct result of his
report, the Minister decided to ask the High Court to appoint Inspectors pursuant to the
provisions of Section 8 of the Act Accordingly, on 22 September, 1999, the High Court
appointed the Honourable Mr Justice Declan Costello, Ms Noreen Mackey, barrister-at-

Since the enactment of the Companies Act 2001, the Minister's role in regard to the investigation
of companies has been taken over by the Director of Corporate Enforcement
law and Mr Paul Rowan, FCA as Inspectors to investigate the affairs of Ansbacher.
Following the retirement from the Inquiry on health grounds of Mr Justice Costello in
November 2000, the High Court, by Order dated 8 December 2000 appointed His Honour
Judge Sean O'Leary and Mr Michael Cush, Senior Counsel, to replace him. Copies of the
two Orders are attached at Appendix 1(a) and Appendix 1(b).

1.6 The Order appointing the Inspectors and the structure of this Report
The original Order of the 22 September 1999 constitutes the terms of reference for this
investigation. The operative part of the Order reads:

'it is ordered that the said Inspectors investigate and report to the Court on the affairs
of the Company in the title hereof and in particular:

(a) to examine and define the nature and extent of the Company's Irish
business from 1971 to date i.e. the business carried out in the State or any
other business carried out on behalf of Irish residents whether in the State
or elsewhere

(b) to identify as far as possible all of the parties who were either officers
(including shadow directors) and agents of the Company clients of the
Company or who otherwise assisted in the carrying out of the business at
the relevant time

(c) to examine whether the Companies Acts, 1963-1990 were breached by the
Company, its officers (including shadow directors), agents or third parties
at the relevant time and if so to identify the provisions involved and the
persons in default in each case

d) to examine whether the affairs of the company were conducted with an

intent to defraud its creditors or the creditors of any other person or
 otherwise for a fraudulent or unlawful purpose and if so to identify the
statutory provisions involved and the persons in default in each case

(e) to report on any related matters.'

This Report is structured in such a way as to reflect the terms of reference set for the
Inspectors by the High Court. Thus, Part II of the Report contains chapters dealing with
the evolution of the Irish business of Ansbacher (Cayman) Limited, dealing with the
services offered by the Company and the nature and extent of its business and dealing
with the wrongdoing committed by the Company. Part EI of the Report seeks to identify
those persons and companies responsible for the wrongdoing of Ansbacher. Part IV of
the Report identifies those who assisted Ansbacher in the carrying out of its unlawful
business in Ireland. Part V identifies the clients of the Company. The Inspectors are
mandated by the Order appointing them to identify the clients of the Company but they
do not interpret the Order of the 22 September 1999 as permitting them to investigate the
clients of the Company. This interpretation has been confirmed by the High Court By
an Order made on the 13 March 2001, Mr Justice Johnson directed that, in discharging
their obligation to the High Court, the Inspectors were required to investigate and report
on the clients of Ansbacher only in so far as it was necessary to do so for the purpose of
examining and defining the nature and extent of Ansbacher's Irish business, for the
purpose of identifying the clients and for the purpose of examining the affairs of
Ansbacher. Part VI of this Report contains chapters dealing with related matters, and,
finally, Part VII contains a summary of the Inspectors' findings.

1.7 The identification of possible breaches of Common Law and Statutory

Provisions, including Company Law
The Inspectors gave detailed consideration to the duties imposed upon them by the terms
of the Order of 22 September 1999 in so far as these involved the identification of
breaches of the Companies Acts and taxation provisions and of possible fraud by
Ansbacher and other entities or persons. The Inspectors further considered how (if at all)
the obligation to report on related matters contained an implied obligation to report
mutatis mutandi on any potential fraud discovered in these additional areas of reporting.

The Inspectors are satisfied that the terms of the Order of 22 September 1999 imposes an
obligation on them to identify both the fact of and possible responsibility for any possible
breaches of the Companies Acts and other statutory and common law offences.

The Inspectors have however been conscious of the need to ensure that any person
identified in pursuance of that duty is not categorised as an offender by reason of this
investigation but is accorded the presumption of innocence to which every person is
entitled.

The extent of the conclusions of the Inspectors, in respect of those potential offences
identified and persons named in connection with them, has been limited to afinding that
in any particular case there is evidence tending to show that a particular offence has been
committed or that there is evidence tending to show that a specified person has committed
that offence. Those reading or commenting on this Report should also be conscious of
the rights of those named.

It is a matter for others to decide whether, in the light of the available evidence and the
standard of proof required in a criminal case and other factors such as delay, any criminal
prosecutions are desirable or possible. The Inspectors foresee some difficulty in bringing
such prosecutions.

The extent to which this duty to report on potentially criminal acts extended to those
issues which the Inspectors decided were related matters within the meaning of the Order
was also considered. The Inspectors have construed their duty to report on related
matters narrowly, confining their consideration of possible offences arising from such
matters to business activities that were continuations of Ansbacher activities (such as
Hamilton Ross) or businesses feeding Ansbacher's Irish business (such as the deposit
taking activities of Mr Jack Stakelum). The relationship between the activities of the
Company and these matters was so close that the Inspectors formed the view that it was
necessary to include comments on potential breaches of the criminal law covering these
areas.

1.8 The Work of the Inspectors

Stages of the Investigation

The work of the Inspectors was carried out between September 1999 and June 2002 at a
total cost of approximately €3,2m. There have been a number of identifiable stages to the
Investigation. There was first the information gathering phase. This was a lengthy
process involving the assessment of thousands of documents and the taking of evidence
of approximately two hundred witnesses. The second stage involved the assessment of
information gathered and in particular the consideration of whether or not that
information warranted preliminary findings of an adverse nature against any individual or
corporation. The third stage involved the communication of any such preliminary
findings and the identification of the evidence upon which thefindings were based. Each
person in receipt of such a preliminary finding was informed that he or she was entitled to
challenge the preliminaryfinding either by challenging the evidence upon which it was
based, producing evidence to the contrary, making oral or written submissions or any
combination thereof. The next stage of the process involved hearings in which the
preliminaryfindings of the Inspectors were challenged by the persons concerned. Lastly,
the Inspectors considered all of the relevant evidence and in particular the evidence and
submissions of those who had challenged their preliminary findings. The Inspectors then
proceeded tofinalise their conclusions. This Report was then written.

Work in the Cayman Islands and the Channel Islands

On 7 June 2000, the Inspectors made application to the High Court in Dublin for an
Order directing that the Court issue a letter of request to the Grand Court of the Cayman
Islands, seeking its assistance for the purposes of the investigation and, in particular,
requesting that it make Orders directing that certain officers of Ansbacher (Cayman)
Limited attend for examination before the Inspectors and that the Company produce
certain documents to the Inspectors. The High Court in Ireland duly issued such a letter
of request. The matter first came before the Grand Court of Cayman on foot of a
summons dated 20 September 2000. It was then agreed that the letter of request
application be postponed to await the outcome of an application brought by the Company
itself pursuant to Section 4 of the Confidential Relationships (Preservation) Law [1995
revision], seeking leave of the Grand Court of Cayman to divulge to the Inspectors
certain confidential information relating in particular to the identification of clients of the
Company. That application was heard before Mr Justice Smellie over a period of seven
days in the months of April and May 2001. Ultimately, in a reserved judgement, Mr
Justice Smellie directed that the Company be at liberty to furnish to the Inspectors a
limited amount of information. Significantly, he directed that they were not at liberty to
furnish the Inspectors with information which would identify the clients of the Company.
In the light of this ruling, the Inspectors were advised that there was little point in
proceeding with the letter of request application. Furthermore, although the Inspectors
were advised that there were some grounds for appealing the Order made by Mr Justice
Smellie, they were also advised that the outcome of any appeal was far from certain and
that ultimately the appeal process might take a period of years. The Inspectors decided
not to appeal.

On 27 July 2000, an application was made by the Inspectors to the High Court in Dublin
for an Order directing that the Court issue a letter of request to the Royal Court of
Guernsey in the Channel Islands, seeking its assistance for the purposes of the
investigation and, in particular, requesting that it make Orders directing that certain
officers of College Trustees and its parent company furnish evidence and specified
documentation to the Inspectors. The High Court subsequently signed this letter of
request. However, in light of the decision of the Grand Court of Cayman, referred to
above, the Inspectors received advice that the application would not succeed. Therefore,
the Inspectors applied to have the letter of request withdrawn. The High Court withdrew
the letter of request on 7 June 2002.
The Authorised Officer's Report
Whilst the report of the Authorised Officer, Mr Gerard Ryan, was the basis of the
appointment of the Inspectors, it is not the basis for and does not form any part of this
Report From the outset, the Inspectors determined that they would report to the Court
only on the basis of their own work and not upon the basis of the work of others. It is
worth noting also that the powers available to Mr Ryan as an Authorised Officerpursuant
to the Companies Act, 1990 were confined essentially to seeking books and documents
and requiring explanations of same. The powers of the Inspectors are considerably more
extensive. They include, in particular, the power to compel any person who may be in
possession of information concerning the affairs of the company to attend before them
and to give all assistance in connection with the investigation that he or she is reasonably
able to give. This power, which was not available to Mr Ryan, was exercised frequently
by the Inspectors and resulted in the Inspectors having a level of interaction with a wide
variety of individuals from which their understanding of the affairs of the Company was
greatly enhanced. To the extent that there may be differences in the report of the
Authorised Officer and the report of the Inspectors, those differences are almost certainly
explained by the greater powers available to the Inspectors.

Conflicts of Interest
During the course of the Inquiry, each Inspector examined the matters involved and
identified any potential conflicts of interest that arose. They disqualified themselves
from all decision-making in relation to those cases. In identifying these potential
conflicts, the Inspectors erred on the side of caution. Those parties in respect of whom
conflicts of interest were declared were individually notified of the matter. These
procedures were adopted in accordance with the terms of Court Orders dated 6 April
2000 and 25 May 2001 (see Appendix 1(c) and Appendix 1(d)).

1.9 Those assisting the Inspectors

The Inspectors place on record the co-operation that they receivedfrom many individuals
and companies. In particular:
The manner in which Guinness and Mahon Ireland Ltd, under its new owners, dealt with
the Inspectors was very co-operative.

First Rand Limited and the First National Bank of Southern Africa Limited being the
later owners of Ansbacher (Cayman) Ltd co-operated very fully with the Inspectors.

Henry Ansbacher Holdings plc also participated in the supply of information which
played a significant part in advancing the understanding of the Inspectors of the issues
involved.

Ansbacher (Cayman) Ltd co-operated to the extent permitted by the Grand Cayman
Court.

The Inspectors record the very willing and substantial help received from the executives
of IIB plc and CRH plc.

Mr Padraig Colleiy assisted the Inspectors with promptness and courtesy in difficult
circumstances.

Mr Jack Stakelum (having quite properly raised his concerns in respect of giving
evidence concerning his former clients) when required by the Inspectors fully discharged
his duties.

Many others also assisted the Inspectors in their work. These include persons who,
though appearing to be the subject of proper inquiry by the Inspectors, on the receipt of
their evidence were found not to have any connection with the subject of this
investigation.

Chapter 29 contains the very limited list of those whose co-operation fell short of what is
required under the Companies Acts.
 PART II

ANSBACHER (CAYMAN) LIMITED

DESCRIPTION OF ITS IRISH BUSINESS AND THE

WRONGDOING INVOLVED
 CHAPTER 2

EVOLUTION OF THE IRISH BUSINESS OF ANSBACHER (CAYMAN) LTD

INDEX

Page
2.1 Guinness and Mahon and the Cayman connection 26

2.2 The modernisation of Guinness and Mahon 27

2.3 Mr James Desmond Traynor 28

2.4 The genesis of GMCT 29

2.5 Early operation of GMCT 31

2.6 Opening of accounts with Guinness and Mahon 31

2.7 Amiens Investments Limited and Amiens Securities Limited 32

2.8 Mr Traynor on the board of GMCT 33

2.9 College Trustees Limited 34

2.10 Mr Richard Fenhalls and the sale of GMCT to GMOIL 34

2.11 Mr Traynor leaves Guinness and Mahon 35

2.12 Mr Traynor opens accounts with NCB 35

2.13 Sale of GMCT to Chichester Investments Limited 36

2.14 Sale of GMCT to the Henry Ansbacher Group 37

2.15 Change of name of GMCT and Mr Traynor appointed as Chairman 37

2.16 IIB and Kentford Securities Limited 37

2.17 Hamilton Ross 39

2.18 Sale of Henry Ansbacher Group to First National Bank of

Southern Africa, and further change of name of the Cayman Company 40

2.19 Sale of First National Bank of Southern Africa to FirstRand Limited 41

CHAPTER 2

EVOLUTION OF THE IRISH BUSINESS OF ANSBACHER (CAYMAN) LIMITED

2.1 Guinness and Mahon and the Cayman connection

The story of the Irish business of Ansbacher is so inextricably linked to the company's
genesis that it is necessary, in order to fully understand it, to begin at the time of its
incorporation. This occurred when Guinness and Mahon had decided to extend their
services to include an offshore operation in a tax haven. At that time, Guinness and
Mahon was a small merchant bank in College Green, Dublin. Originally established in
1836 by John Ross Mahon and Robert Guinness as a merchant bank, it subsequently
opened a sub-office in London, which in 1923 became the headquarters of the bank. It
became an incorporated company on 3 February 1942 under the name Guinness and
Mahon Limited. (see Appendix II(a)). In 1966, it became Guinness and Mahon (Ireland)
Limited and became a wholly owned subsidiary of Guinness Mahon & Company, the
London bank. In 1994, it was acquired by the then Irish Permanent Building Society, now
known as Irish Life & Permanent plc.

Guinness and Mahon was effectively run by its three managing directors, Mr John
Guinness, Sir George Mahon and Mr William Forwood. This triumvirate was known as a
'conclave'. On 17 January 1969, they agreed at a conclave meeting to investigate the
possibility of forming a company or trust in the Cayman Islands 'or in some other haven'.
The following month they instructed the late Mr Liam McGonagle, solicitor, to arrange
for the incorporation of seven companies in the Caymans, of which four were to be tax-
exempt companies. Matters seem to have rested there until June 1969, when, in the
minutes of a meeting of directors, under the heading of 'Bank of Nova Scotia Trust Co.
(Cayman) Limited', the following item is found:
 'John Collins, Manager, has called to see G.E.J.M. [Sir George Mahon] and
J.H.G [Mr John Guinness] in connection with companies set up for us. L.
McGonagle who was present at the meeting is satisfied with the proposals
whereby an operation can be 'unscrambled' without any action having to be
taken in the Cayman Islands. If we can devise an attractive scheme for our
customers the Trust Company would probably be prepared to split some of their
fees with us.'

This document is interesting on two counts; firstly, the 'John Collins' referred to, who at
the time was an official of the Bank of Nova Scotia, subsequently became one of the first
directors of the new Cayman bank. 1 Secondly, there is already an incentive for Guinness
and Mahon to 'devise an attractive scheme' for their customers.

2.2 The modernisation of Guinness and Mahon

The minutes of the conclave meeting in December 1969 note that Mr Guinness had
discussions with 'Mr Desmond Traynor' concerning the operation of Cayman Island
companies. This is the first appearance of Mr Traynor on the Guinness and Mahon stage.
He was already known to each of the three managing directors, who had formed a high
view of his capabilities. Around that time, Mr Guinness, Sir George Mahon and Mr
Forwood had begun to take stock of the merchant bank they governed, and had come to
the conclusion that it needed to change its rather leisurely, old-fashioned style to
something more in keeping with the competitive world of mid-twentieth century banking.
As Mr Forwood has told the Inspectors, the three men were conscious that they came
from a similar Anglo-Irish Protestant privileged background. All three had received a
similar upbringing, and indeed, had even attended the same school. They were aware that
the bank needed new blood; someone from outside the Old Boys' club that Guinness and
Mahon had become, someone, as Mr Forwood put it, who was in touch with the 'outside
world'. To this end, each one drafted a set of specifications, and when they came together

1
Mr Collins and Mr Forwood are the only surviving members of what may be called the founding
group, and are thus the only people from whom the Inspectors have been able to obtain first-hand evidence.
Much of this portion of the Report is derived from the evidence of Mr Forwood.
to discuss them, they agreed that there was only one man for the job - Desmond Traynor.
Shortly afterwards, therefore, at the end of 1969, Mr Traynor, who up to that time was a
partner in the accountancy firm of Haughey Boland, was appointed to the board of
directors of Guinness and Mahon.

2.3 Mr James Desmond Traynor

Mr James Desmond Traynor commenced his career in 1950 as the first articled clerk in
Haughey Boland & Company, Chartered Accountants, where he remained until 1969.
During that period, Mr Charles Haughey was also working with the company and there
Mr Traynor struck up what was to be a lifelong friendship with the future Taoiseach. Mr
Traynor appears to have been a man of formidable capabilities, who went on to become
one of the outstanding financiers of the 1980s and early 1990s. He was reserved to the
point of taciturnity; a man who could truly be said not to have permitted his left hand to
know what his right hand was doing. At the same time, he was, according to his
secretary, a man devoted to his family, who, no matter how pressing his business
engagements, would never miss the family holiday. He was also a man who inspired
absolute trust and confidence in all who met him; indeed, a recurring theme in the
evidence gathered by the Inspectors has been the phrase 'I trusted Mr Traynor
absolutely'.

Mr Traynor would remain on the board of directors of Guinness and Mahon until 1986.
He would hold the position of Chairman of CRH plc from 1987 until his death in 1994
and became without doubt one of the leading figures in the Irish business community.
When, in 1990, the Corporate Finance Department of Henry Ansbacher & Company in
London had instructions to convert the Irish Permanent Building Society from a mutual
society into a bank, Mr Richard Fenhalls, Henry Ansbacher's then Chief Executive,
identified Mr Traynor as a possible candidate for the position of Chief Executive of the
new bank.
2.4 The genesis of GMCT
It was, then, this man who, according to Guinness and Mahon conclave minutes, in the
year following his arrival in Guinness and Mahon visited Nassau in the Bahamas
'concerning Trust companies'. On 12 March 1970, a brief note in the minutes refers to
the Cayman companies that had by then been incorporated and allocated to individual
customers of Guinness and Mahon. It was noted that the customers concerned were to
bear the expenses of those companies. During the same meeting, Mr Traynor reported
that following his recent visit to the Bahamas, he and Mr William Forwood had attended
a meeting in Guinness Mahon & Company London, at which it was agreed in principle to
form a Guinness Mahon Bahamas Trust Company, but that more detailed information
would be sought before a final decision was taken. Finally, another small item appears in
the minutes of that meeting:

'John Collins of Bank of Nova Scotia Trust Co. has asked if we would be
interested in financing a residential development in the North Sound at Grand
Cayman. We are applying for more information before suggesting that the
Principal, John Dise, should come to meet us.'

The information was forthcoming, and by May, the directors were considering 'copious
cash flow statements' sent by John Dise.

By 25 June 1970, Mr Traynor was taking an active role in the matter. At a Guinness and
Mahon directors' meeting held on that date, he reported that it had been decided in
London to proceed with the incorporation of Guinness Mahon Bahamas Trust Limited.
For the first time, the possibility of setting up a bank in Cayman is referred to in the
minutes. However, it must already have been the subject of unrecorded discussion,
because Mr Traynor reports that if it is decided to proceed with such a bank, the name to
be used would be Guinness Mahon Cayman Trust Limited, and that it would then also be
decided to have the share capital of both the Bahamas and the Cayman Trust companies
owned by a new holding company in Cayman, which in turn would be wholly owned by
Guinness and Mahon. The minutes record that the decision whether or not to proceed
with the creation of a Cayman bank would be made upon consideration of Mr Traynor's
final recommendation. By 16 July 1970, the idea of a bank seemed to have been
temporarily shelved. Instead, Mr Traynor proposed the incorporation of Guinness Mahon
Cayman Trust Limited as a holding company for Guinness and Mahon's various Cayman
investments

On 19 November 1970, Mr Traynor reported that he had been to Cayman and was
satisfied with the bank's various investments there. He was happy that the 'political
situation' in Cayman had not changed, and could 'still be said to be very satisfactory'. In
contrast, the political situation in the Bahamas, which he had also visited, was not
looking good, and he did not believe that much business would materialise in respect of
Guinness and Mahon's trust company there. He said that he hoped to return to Cayman
early in 1971 to establish Guinness Mahon Cayman Trust Limited.

Finally, on 25 January 1971, Guinness Mahon Cayman Trust Limited ('GMCT'), the
company that is now known as Ansbacher (Cayman) Limited, was incorporated to
provide trust and other corporate services to wealthy customers of the Guinness Mahon
Group. Guinness and Mahon subscribed in full for the issued share capital of Jamaican
$20,000. Minutes of 28 January 1971 note that the application for a banking licence had
been approved in principle by the Executive Council of the Cayman Islands. By 5 March
1971, a restricted banking licence had been obtained and in 1973 the company obtained a
full Class 'A' licence, enabling it to provide banking services both within and outside of
the Cayman Islands. Between 1971 and 1973, the administration of the new bank was
carried out by the Bank of Nova Scotia Trust Company (Cayman) Limited. Two
employees of the Bank of Nova Scotia, Mr John Collins and Mr John Furze, were
nominated by their employer to act as directors of GMCT.

In 1973, GMCT set up its own offices and staff in Cayman, and terminated its contract
with the Bank of Nova Scotia. At that point, Messrs Collins and Furze left their previous
employment to become executive directors of the new company.
2.5 Early operation of GMCT
The first set of accounts of GMCT is dated 31 March 1971. It shows that the Company
had at that date two wholly owned subsidiaries, Ireland's Eye Limited and Blasket
Limited. Both, despite their names, were Cayman companies. These subsidiaries in turn
owned two other companies: Mercury Holdings Limited and Mercury Investments
Limited. The subsidiaries appear to have been involved in the buying and selling of land.
Up to that date, GMCT does not appear to have begun to offer the services to Irish clients
for which it has since become so well known. However, a significant item appears in the
minutes of a meeting of directors of Guinness and Mahon on 21 April 1971, when Mr
Traynor reports that John Collins would be visiting Ireland in May, and that a meeting
would be set up with the firm of Kennedy Crowley (now KPMG) 'who are interested in
services which we can offer in Cayman'. On 6 May, the proposed meeting was again
referred to, this time 'with a view to arranging that business shall flow through our
trustee company.' This is the genesis of a mutually profitable liaison between Kennedy
Crowley and Guinness and Mahon. Kennedy Crowley had at that time wealthy clients
seeking a secure and perhaps confidential investment for their funds, while Guinness and
Mahon had an offshore trust company waiting for customers. By June 1971, the meetings
had taken place, but with John Furze rather than John Collins representing GMCT.
Around that time too, back-to-back arrangements involving Cayman are mentioned for
the first time in the minutes, where it is said to have been agreed that any differential
arising would normally be split equally between Guinness and Mahon and GMCT.

2.6 Opening of accounts with Guinness and Mahon

On the date of its incorporation, GMCT opened various accounts with Guinness and
Mahon, and signed a declaration of non-residency in respect of each of them. The effect
of this declaration was that the interest earned on the accounts would not be included in
any returns made by Guinness and Mahon to the Revenue. In a Guinness and Mahon list
of thirty non-resident deposit accounts dated 30 June 1972, twenty-five are coded
accounts in the name of GMCT. For convenience, these accounts and deposits will from
here on be referred to as the GMCT accounts, or the GMCT deposits. In a list of loans
over £5,000 of the same date, nine are expressed to be to 'Guinness Mahon Cayman
Trust'. However, the first extant statements of GMCT's accounts in Guinness and
Mahon date from 1974. From then on, a series of accounts appears. Some accounts are
specific to a particular currency - sterling, US dollars, etc - while others are specific to a
particular individual. The latter accounts, although in the name of GMCT, bear coded
references, for example 're. HC' or 'A/G'. Some of these accounts represented funds
belonging to trusts established by Irish clients with GMCT. Other accounts represented
simple deposits of funds made by Irish clients with GMCT. GMCT placed the funds, or
part of them, on deposit with Guinness and Mahon, thus enabling the client to have easy
access to them. Others again were sundry accounts. Some of these sundry accounts also
contained money beneficially owned by individuals. The instructions on all of these
accounts were given by telex from GMCT, or by internal communication from Mr
Traynor.

2.7 Amiens Investments Limited and Amiens Securities Limited

In 1976, Mr Traynor opened accounts in Guinness and Mahon in the names of Amiens
Investments Limited and Amiens Securities Limited. These accounts allowed Irish
residents to lodge Irish currency to their Cayman or Channel Island trusts or deposit
accounts. The client would give the funds to Mr Traynor, who would lodge them to one
of the Amiens accounts. The transaction would then be recorded on the client's
memorandum account - a secret coded account maintained by Mr Padraig Collery (see
chapter 3) and would ultimately be reflected in the books of GMCT. Mr Traynor
occasionally used the Amiens accounts to make cash payments to persons who wished to
withdraw funds from their offshore accounts. The effect of these transactions was that the
client could deposit or withdraw Irish pounds in Dublin without requiring Exchange
Control clearance, and without bringing the transactions to the attention of the Revenue
Commissioners (see Ninth Memorandum of Evidence of Sandra Kells to the Moriarty
Tribunal at Appendix II(b)).

Mr Collery gave evidence to the Inspectors on 11 January 2000 that there were a number
of Amiens type accounts:
 'Amiens S.L. was an account used by Mr Traynor. There were a number of these
Amiens investments. Amiens Investments, Amiens Securities, Kentford,
Montbrook, they are obviously nominees. They were all used for the facility of
receiving Irish funds and then paying these Irish funds back out again, in
general.'

Mr Collery, in evidence, described the process of lodging and withdrawing thus:

'A ... If the client had £5,000 Irish and wished to put it into an account in
Cayman, from time to time there were instances, we know where Mr
Traynor accepted that £5,000 Irish and lodged it, say, into Amiens
Securities. So now Amiens Securities has the value of a credit of £5,000 in
its books. Let's say that is Mr X. Mr X already has an account in
Cayman. Mr ABC, to which we referred to [sic] earlier, comes in and
says, 'I want to draw off £5,000'. There was a switch made where out of
Amiens £5,000 would have been paid. Mr X, as far as he is concerned has
got the funds out of his account, but in the Cayman books what would
have happened is that Mr ABC's account would have been debited with
£5,000 and Mr X's account would have been credited with £5,000. So, no
exchange did happen between the main account and Amiens Securities in
that instance.

Q That was avoiding any problems in relation to exchange control?

A That is one of the scenarios, yes.'

2.8 Mr Traynor on the Board of GMCT

On the incorporation of GMCT, Mr Traynor was appointed a director. He was described

for many years as the Chairman of the company and was still on the board of directors of
Ansbacher (as it had by then become) at the date of his death, 11 May 1994. Ansbacher
has informed the Inspectors that Mr Traynor was not a director from 1974 to 1981. There
is some evidence that the Central Bank was informed of the intention of GMCT to protect
itself against potential Irish tax complications by not having Irish officers. The
Inspectors have concluded that any such formal decision was cosmetic only and that Mr
Traynor should be considered a director or shadow director of GMCT from the date of its
incorporation to the date of his death.

On 18 March 1981, the board of GMCT passed a resolution to the effect that the duties of
Mr Traynor would be performed solely in the Cayman Islands and that his authority to
act on the company's behalf would be limited accordingly. Despite this formal position,
Mr Traynor until the date of his death carried out in Dublin executive functions for and
on behalf of GMCT/Ansbacher. He remained based in Dublin, visiting Cayman three or
four times a year to attend board meetings and to assist Mr Furze in the reconciliation of
the memorandum accounts with the clients' accounts in Cayman. The duties he
performed on behalf of GMCT remained predominantly Irish-based.

2.9 College Trustees Limited

In 1981, certain events caused GMCT's Irish business to increase substantially. Guinness
and Mahon had a Channel Islands subsidiary called Guinness Mahon Channel Islands,
which in turn had a subsidiary called College Trustees Limited. As its name suggests,
College Trustees was a trustee company, and it managed trusts for a number of wealthy
Irish clients. It had accounts in its own name in Guinness and Mahon up to 1981. In that
year, for reasons that remain unclear, College Trustees deposited the funds of its Irish
clients with GMCT. From then until 1989, the funds of these clients were held in
Guinness and Mahon in an account entitled GMCT re College Trustees Limited.

2.10 Mr Richard Fenhalls and the sale of GMCT to GMOIL

Also in 1981, Mr Richard Fenhalls was appointed Chief Executive of the Guinness
Mahon Group based in London, and was further appointed a non-executive director of
Guinness and Mahon. From 1971 to 1976, Mr Fenhalls had been a director of Irish
Intercontinental Bank Limited, (now known as IIB Bank Limited), ('IIB'). From 1981 to
1984, he was Chief Executive of the Guinness Mahon Group, and a non-executive
director of Guinness and Mahon. From 1985 to 1992, he was chief executive of Henry
Ansbacher & Company Limited, and from 1988 to 1992, he was a director of the
Company under investigation. It was he who, in 1991, introduced Ansbacher business to
IIB. This matter is described in greater detail elsewhere in this Report.

In his capacity as chief executive of the Guinness Mahon Group, Mr Fenhalls had met the
management of GMCT. He had found GMCT to be a profitable and useful organisation.
When therefore, in 1984, Guinness and Mahon found its solvency threatened as a result
of a series of disastrous venture capital investments that made a total loss of some
IR£7 million, Mr Fenhalls devised a plan whereby the shares in GMCT were sold to
another company in the Group, Guinness Mahon Overseas Investments Limited
('GMOIL'). The price paid by GMOIL offset the venture capital loss. Mr Fenhalls left
Guinness Mahon shortly thereafter, and was appointed as chief executive of the Henry
Ansbacher group.

2.11 Mr Traynor leaves Guinness and Mahon

In February or March of 1986 - apparently as the result of a disagreement with London
management - Mr Traynor resigned from Guinness and Mahon. As part of a severance
package, the bank permitted him the use of an office in Trinity Street, Dublin, equipped
with a computer. He was also permitted to bring with him his secretary of many years,
Ms Joan Williams. He continued to be active as a director of GMCT, carrying out his
functions first from the office in Trinity Street and later from his office in the CRH
premises at 42 Fitzwilliam Square, Dublin, following his appointment as Chairman of
that company in 1987.

2.12 Mr Traynor opens accounts with NCB

In 1987 or 1988, Mr Traynor approached Mr Dermot Desmond of NCB Stockbrokers
with a request to open a number of accounts. In all, seven accounts were opened, all in
the name of an NCB nominee, Aurum Nominees. Each account was individually
identified by an account number, and each had its own bank account in Ulster Bank,
College Green, Dublin. NCB was informed that the beneficial owner of all seven
accounts was Overseas Nominees Limited. Overseas Nominees was a Cayman company,
and was the nominee company of Ansbacher although NCB was not aware of this at the
time. The Inspectors are satisfied that the seven accounts in question appear to have been
held for the benefit of clients of Ansbacher. Movements on the accounts and on their
corresponding accounts in Ulster Bank show that funds from the Ulster Bank accounts
were regularly paid into Ansbacher's accounts in IIB. The Inspectors are satisfied that
NCB has not committed any wrongdoing in connection with the accounts.

2.13 Sale of GMCT to Chichester Investments Limited

Meanwhile, in his new position in London, Mr Fenhalls had set about building up an
offshore banking group for the Henry Ansbacher Group. Henry Ansbacher already had
companies in the Channel Islands and in Gibraltar, but had nothing in the Cayman
Islands. Remembering the good impression GMCT had made upon him, Mr Fenhalls
phoned Mr Traynor and told him that if the company ever became available on the
market, Henry Ansbacher would be interested in purchasing it. By then, having traded for
a number of years in Cayman, GMCT's deposit base had broadened to include depositors
who were not Irish. These new depositors were sourced principally from the United
States and Jamaica.

Some time in 1988, Mr Traynor contacted Mr Fenhalls and told him that he, John Furze,
John Collins and Hugh Hart (a Jamaican based lawyer who was at that time a director of
GMCT) were 'tired of what was going on in Guinness and Mahon' and, as a result of
their dissatisfaction, they intended to purchase GMCT themselves. He proposed that they
would then discuss a sale to Henry Ansbacher. Mr Fenhalls wished to do a deal directly
with Guinness and Mahon, but Mr Traynor dissuaded him from this course for reasons
that are unclear. Consequently, in June of that year, a Cayman company, Chichester
Investments Limited, the beneficial owners of which were Messrs Traynor, Furze, Collins
and Hart, purchased GMCT from GMOIL. It appears that at the time of the Chichester
purchase, the name of the Cayman company was changed from Guinness Mahon Cayman
Trust Limited to GMCT Limited - presumably because it would not be possible for
Chichester Investments Limited to use the name Guinness Mahon.
2.14 Sale of GMCT to the Henry Ansbacher Group
Following the sale to Chichester Investments Limited, Mr Fenhalls and another director
of Henry Ansbacher, Mr John Button, set about negotiating the purchase of a majority
shareholding in GMCT. In August 1988, Henry Ansbacher Holdings plc acquired a 75%
shareholding at a price of £750,000 cash plus shares in Henry Ansbacher Holdings plc
valued at £2.25 million. Henry Ansbacher Holdings plc took £2.25 million worth of
shares in GMCT on a new issue. The vendors subscribed for an additional £750,000
worth of new shares. Finally, as agreed by Henry Ansbacher Holdings plc, Henry
Ansbacher & Co Limited in London injected a further £2.5 million into GMCT through
subscription for subordinated loan stock.

The parties agreed that the interests still held by Messrs Traynor and Hart would be
purchased five years after the date of completion. In the case of Messrs Furze and
Collins, 50% of each of their shareholdings was to be purchased five years from the date
of completion, and the remainder upon the severing of their employment with the
company. Furthermore, the minority shareholders undertook to guarantee certain loans
that were considered to be a bad risk.

2.15 Change of name of GMCT and Mr Traynor appointed as Chairman

Following the share sale, GMCT's name was changed to Ansbacher Limited on 29
August 1988. It remained under that name until November 1992, when it became known
as Cayman International Bank and Trust Company Limited. Mr Traynor was appointed
non-executive Chairman, which position he held until 27 April 1993. Thereafter he
continued as a non-executive director until his death in 1994.

2.16 IIB and Kentford Securities Limited

Meanwhile, Ansbacher (as it was now called) had continued to hold accounts in Guinness
and Mahon. By 1990, Mr Fenhalls had become increasingly worried about the credit-
worthiness of Guinness and Mahon and had come to the view that it was unsafe for
Ansbacher to continue to place large group deposits with it. 2 He discussed the position
with Mr Traynor, who, according to Mr Fenhalls, was reluctant at first to close the
accounts. Finally, however, on the instructions of Mr Fenhalls, he did so, and he opened
new accounts with IIB in Dublin. Mr Fenhalls had first paved the way with that bank
where of course he was well known, having formerly been a member of its board.
Ansbacher thus became a customer of IIB, holding accounts in the same way as it had
held them in Guinness and Mahon, namely, on behalf of its clients. Memorandum
accounts continued to be maintained by Mr Collery in Mr Traynor's office in CRH plc,
and everything continued as before, with one exception. IIB did not have a counter
service, and persons requiring cash withdrawals from their Ansbacher accounts were
unable to obtain it directly from IIB. Instead, Mr Traynor made use of an account in the
Bank of Ireland's branch in St Stephen's Green in the name of a company called
Kentford Securities Limited. The practice was that IIB would issue a cheque or draft in
the required amount payable to Kentford Securities, and the cash would be withdrawn
from that account on the instructions of Mr Traynor who was one of the signatories. The
cash would then be passed on to the client. The involvement of IIB in the Irish business
of Ansbacher is considered in detail elsewhere in this report.

Ansbacher remained a customer of Guinness and Mahon to a small extent even after
1991, with some cash-backed loan accounts remaining on the books until 1998, after the
takeover of Guinness and Mahon by the Irish Permanent Building Society in 1994.

2
Much of this portion of the narrative is taken from the transcript of evidence of Richard Fenhalls
2.17 Hamilton Ross
At this point in the narrative it becomes necessary to introduce Hamilton Ross Company
Limited ('Hamilton Ross'), whose function in the conduct of Ansbacher's Irish business
came to light in the early 1990s. Hamilton Ross is a Cayman registered limited liability
company incorporated in 1981. The first directors of the company were Mr John Furze,
Mr JD Ashenheim and Mr PA Harty, all employees of the then GMCT. Each held
shares in his capacity as trust company officer. The directors remained unchanged until
the aftermath of the events of September 1992, which are described in Chapter 12.

Hamilton Ross was in all respects typical of the Cayman companies used by Ansbacher
to carry out its business. By reason of Ansbacher's status as a trust company (in addition
to its existence as a bank), Ansbacher operated in respect of most of its clients through
limited liability companies controlled by itself. In the Ansbacher method of operation, a
client based in Ireland or elsewhere did not have a direct account with the Ansbacher
bank but either used a trust (to which one or a number of companies would be attached),
or deposited funds with the bank in the name of a limited liability Cayman company. It
was a feature of this method of operation that Cayman companies were often rendered
obsolete when the underlying customer closed his or her account or changed his or her
method of operation. The Inspectors have come across many cases where these 'spent'
entities were revived and used for a different customer's purpose. Hamilton Ross was one
such 'recycled' company. Up to 1 January 1988 it was beneficially owned by American
clients of Ansbacher. It was dormant from that date until October 1988 when Ansbacher
began to use it to hold the combined funds of a number of sterling depositors whose
funds were not considered large enough to warrant the expense of individual companies.
Prior to October 1988, it appears, according to Ansbacher's evidence, that the funds of
such small depositors had been held in Poinciana Fund Limited, another Cayman
company. After that date, some monies remained in Poinciana, but the majority was
moved to Hamilton Ross.

In 1992, all Hamilton Ross accounts were taken off Ansbacher's books, at the direction
of London management. At the same time, Mr Traynor gave instructions to IIB to close
certain accounts that had been held in that bank in the name of Ansbacher, and to transfer
the funds to new accounts, which were opened in the name of Hamilton Ross. This was
the first appearance of that company on the Irish scene. The effect of these instructions
was that clients' funds, which had up to that time been held in an Ansbacher pooled
account in IIB, and held in an account in the name of Hamilton Ross in Ansbacher in
Cayman, now ceased to be held in any Ansbacher account either in Ireland or in Cayman.
Instead, they were held on the clients' behalf in IIB in an account in the name of
Hamilton Ross Limited. Thus from then on, some people who had hitherto been clients of
Ansbacher became simply clients of Hamilton Ross.

2.18 Sale of Henry Ansbacher Group to First National Bank of Southern Africa,
and further change of name of the Cayman Company
On 20 January 1993, the entire Henry Ansbacher Group was purchased by First National
Bank of Southern Africa Limited. Messrs Traynor, Furze, Collins and Hart retained their
25% shareholding in the company until 30 April 1993, when their shares were acquired,
on behalf of the new owners, by Ansbacher Trust Group Services Limited. The Company
assumed its present name of Ansbacher (Cayman) Limited in September 1994.

As noted above, Mr Traynor resigned as chairman and became a non-executive director

in April 1993, which position he held until his death in May 1994. Mr Traynor's death
was unexpected, and caused some panic among the Irish clients of Ansbacher. Mr
Collery was forced to take over Mr Traynor's role at short notice, and after a brief period
of some disarray, he began the winding down of operations in Ireland. Mr Collery had
never been an employee of the Cayman bank, but had, it appears, been paid personally by
Mr Traynor. However, following Mr Traynor's death, he was paid a retainer by
Ansbacher to 'ensure an orderly transition in respect of /Ansbacher] 's dealings with
Irish clients' (see Information Document provided to the Inspectors by Ansbacher
(Cayman) Limited at Appendix II(c)).

In April 1995, Mr Furze resigned as executive director (he died in 1997) and Mr Collins
became a non-executive director, which position he held until his resignation on
31 October 2000.

2.19 Sale of First National Bank of Southern Africa to FirstRand Limited

Finally, following the merger of Rand Merchant Bank Holdings and Anglo American to
form a new company, FirstRand Limited, the shares of First National Bank of Southern
Africa Limited were acquired by FirstRand in 1998. FirstRand, therefore, is the current
owner of Ansbacher (Cayman) Limited.
 CHAPTER 3

THE SERVICES OFFERED BY ANSBACHER (CAYMAN) LIMITED AND THE

POLICY OF CONCEALMENT IN OPERATION

INDEX

Page
3.1 Introduction 44

3.2 Use of Discretionary Trusts by Irish Clients 44

3.3 Trusts established by GMCT 47

3.4 Knowledge of GMCT and Guinness and Mahon 49

3.5 GMCT accounts in Guinness and Mahon 54

3.6 The memorandum accounts 55

3.7 Concealment of memorandum accounts 56

3.8 1976 Central Bank report on Guinness and Mahon 57

3.9 Destruction of Ansbacher's records 58

3.10 Irish clients' lodgements and withdrawals 58

3.11 Payment to Mr Haughey 59

 Page
3.12 Concealment of clients' identities in statements of account 60

3.13 Transfer of Ansbacher's business to 42 Fitzwilliam Square 60

3.14 Transfer of Ansbacher's business to Winetavern Street 61

3.15 Back-To-Back Loans 61

3.16 Limited information to auditors 62

3.17 Limited information to Central Bank 63

3.18 Caveat regarding the 'suitably secured' reference 63

3.19 Concealment of banking operation from Central Bank 64

3.20 Concealment of banking operation from Cayman Authorities 64

3.21 Conclusion 64
CHAPTER 3

THE SERVICES OFFERED BY ANSBACHER (CAYMAN) LIMITED AND THE

POLICY OF CONCEALMENT IN OPERATION

3.1 Introduction
In this chapter, the Inspectors seek to identify the various services offered by Ansbacher
(Cayman) Limited and to ascertain the true nature of its business. There were three
essential services offered by Ansbacher as part of its Irish business. There was firstly a
discretionary trust facility. Secondly, there were deposit or memorandum accounts
maintained in the name of Ansbacher in Dublin to which Irish clients could make
lodgements and from which they could make withdrawals. By this means, they were
enabled to lodge their funds offshore but still have access to them in Ireland as though
they had never left the jurisdiction. Thirdly, Ansbacher participated in the provision of
back-to-back loan facilities to their clients. A feature of each of the services offered by
Ansbacher is the extent to which secrecy or concealment was an essential element.
Ansbacher's policy of concealment is highlighted in this chapter. Having reviewed the
various services offered by Ansbacher and the manner in which they were operated, the
Inspectors conclude in this chapter that Ansbacher knowingly promoted tax evasion by
Irish clients.

3.2 Use of Discretionary Trusts by Irish Clients

Discretionary trusts have a long history of use by those with wealth to protect their own
interests and the interests of later generations. It is a feature of the genre that assets are
transferred from the control of the owner ( 'the prime mover') to a structure founded on a
trust deed for the benefit of beneficiaries, who sometimes include the prime mover. In
this way the fund appears to be legally independent of the wealthy individual who was
the prime mover. The key attribute of a discretionary trust, as opposed to other forms of
trust, is that the trustees are given discretion as to how they apply the assets for the
benefit of the beneficiaries.

There are many different reasons for establishing a trust and many different methods of
implementing the process. Sometimes this is achieved by having the settlor (the person
who notionally establishes the trust) a person other than the prime mover. The settlor
establishes the fund with a nominal sum, which, after the paper work has been completed,
is augmented by the assets or funds of the prime mover.

When established, the trust is controlled by trustees who sometimes use a company to
hold the assets. The assets can be further separated from the trustees by the use of
subsidiary companies as required. In some cases, the funds are put into the control of
managing agents who make the day-to-day decisions, relegating the function of the
trustees to one of general supervision.

The purpose of the structure is to preserve the property rights of the beneficiaries. These
beneficiaries may be identified in the trust deed by name or by description. In many
cases, the prime mover of the structure arranges to name his or her spouse as the principal
beneficiary with their wider family as other beneficiaries. Indeed, the prime mover
himself may also be named as a beneficiary. In other cases, the beneficiaries may be
simply described as a class such as the children of the prime mover.

Many companies offer the service of acting as professional trustees to persons wishing to
set up trusts. In such cases, of course, the trustees cannot know intimately the affairs of
the prime movers and families for whom they act. At the same time, the legal effect is to
grant to the trustees legal authority and a wide discretion as to how they deal with the
assets.

Letters of Wishes
Typically in a discretionary trust situation, the prime mover in the scheme is given the
comfort of transmitting to the trustees a 'letter of wishes'. This document, which is not
legally binding, informs the trustee of the wishes of the person who provided the funds
and lists the intended beneficiaries. The letter of wishes is not part of the trust deed. Its
purpose is to give the prime mover a measure of comfort in light of the fact that by
placing his assets in trust he or she is handing legal control of them over to the trustees
who he or she may not know. It also provides guidance to professional trustees who may
act for several hundred cases and could not otherwise know the intention of each client.

A letter of wishes, as its name suggests, is a document provided by a settlor to the

trustees explaining his or her thoughts on how he or she would like the trustees to
exercise their powers and often, specifically envisaging how he or she would like them to
divide the trust property. For example, in the case of a discretionary trust where the
beneficiaries are described as a class comprising the prime mover's children, he or she
might explain that it would be his or her wish that the trust property should, after a certain
period, be divided equally among his children. It should be emphasised that a letter of
wishes is not binding on the trustees. Their duty is to act on an independent basis in
exercising such discretion as they have been given by the trust deed in making decisions.

Protector
Another device sometimes used to give added comfort to the prime mover is the
appointment of a protector. A protector is not a trustee because the trust property is not
vested in him or her. He or she merely holds certain powers given by the trust deed.
Typically, the powers granted are those of monitoring and agreeing trustees fees, giving
or withholding consent to certain transactions, the right to be consulted and, perhaps,
have the power of veto in respect of appointments to beneficiaries or the sale of trust
property and the right to remove trustees and appoint new ones.

Taxation issues
Schemes established by those living within this jurisdiction in the past conferred some
tax advantages on those involved. However, various Finance Acts have eroded these
benefits. In particular, after 1974, foreign based trusts were largely rendered ineffective
for income tax purposes by anti-avoidance legislation. At the present time, Irish trusts
still have some uses in respect of protecting the interests of minors and those under a
legal disability. They are also used in inter-generational asset transfer management.

To understand the background to the discretionary trust schemes operated by GMCT, one
must return to the early 1970s. In that era, personal tax rates were high and the political
preparations were underway to introduce capital taxes such as Capital Gains, Capital
Acquisitions and Wealth Taxes. In these conditions, those with money were concerned
about their financial future and were receptive to schemes that appeared to offer a
measure of security.

The class of person with these concerns was also coincidentally the target market of
Guinness and Mahon, who wished to provide personal banking services to wealthy
clients. The major accountancy firms in Dublin at that time were developing tax
strategies to respond to their clients' concerns. Guinness and Mahon facilitated this
development by providing vehicles to implement such schemes. It was a common feature
of such schemes that those wishing to avail of them wanted to locate their assets in tax
havens abroad. As outlined in Chapter 2, the main purpose in establishing GMCT was
that Guinness and Mahon would own a trust company in the Cayman Islands. Guinness
and Mahon already had such companies in the Channel Islands. The structure of the
schemes continued to develop over the years and the complications brought about by the
need for secrecy (as outlined below) encouraged the proliferation of companies and
trusts.

3.3 Trusts established by GMCT

The trusts established by GMCT differed in certain details to the general scheme outlined
above. The true object of the scheme was sometimes hidden by listing as the
beneficiaries a class of persons such as 'all those who have contributed £10 to the Red
Cross'. This device enabled the trustees to distribute money to persons who could not be
identified by reading the trust deed, so keeping the true object of the trust secret. Of
course, this type of scheme depended on the trustee using his or her powers in accordance
with the wishes of the provider of the assets.
The use of a letter of wishes is a legitimate method by which comfort is given to prime
movers who appoint professional trustees whom they may not know personally.
However, as can be seen from the 'Note to John Furze' document, which will be dealt
with below, the purpose of letters of wishes was distorted in the way that it was presented
to potential GMCT clients. It is clear that the letter of wishes was promoted by GMCT as
an added element in the culture of secrecy.

The power to change the trustee or trustees is a vital control mechanism and this power is
normally given to the settlor. Simultaneously with the setting up of the scheme, however,
the settlor in the GMCT case immediately conveys his or her right to appoint new
trustees to the prime mover (who of course is usually the wealthy person who set the
whole process in motion). By these processes, the prime mover supplied the assets to the
fund, retained the right to hire and fire those who controlled the fund and remained a
beneficiary of the structure. However, he or she was not identified in the trust deed.

In the early 1970s, when many of the GMCT trusts were established, neither GMCT nor
its clients were acting illegally by establishing such trusts. Provided the funds transferred
to the trust were tax paid or tax-free, the transaction was lawful in all respects. However,
once the trusts had been established, those involved had a continuing obligation to
operate them in a manner consistent with the laws of the Cayman Islands. Further, those
who received a taxable benefit at any time thereafter from the fund had potential tax
obligations in their country of tax residence.

A feature of the system as operated was that at least some of the funds of trusts serving
Irish prime movers were transferred back to Ireland to Guinness and Mahon in Dublin
and held there in accounts in the nominal name of GMCT. The reality was that these
funds were available to those who had established the trust. The Irish prime movers were
enabled to use the GMCT accounts in Guinness and Mahon as a means of withdrawing
cash from the trust funds when needed, lodging new funds or using the funds to secretly
provide security for back-to-back loans, as described in greater detail further on.
If these persons had returned to the Irish Revenue Commissioners those elements of these
transactions giving rise to Revenue implications, no law would have been broken.
However, in more than 100 cases (relating to both trusts and deposits) in which the
Inspectors addressed Revenue issues, they did not discover a single case where
contemporaneous tax returns were made in respect of these transactions.

The Inspectors must stress, however, that they did not address this issue in respect of
every person identified as a client in this report. Therefore, they urge all those with access
to this report to recognise that the individual tax affairs of the clients of Ansbacher were
not within the Inspectors' remit (see Chapter 22) and to exercise caution before
concluding in any individual case that a particular client defrauded the Revenue
authorities. However, in the opinion of the Inspectors, there is evidence tending to show
that the scheme as operated by Guinness and Mahon and GMCT facilitated the
widespread evasion of tax.

3.4 Knowledge of GMCT and Guinness and Mahon

On the other hand, the fact that some customers failed to make tax returns of distributions
received from their trusts through the GMCT accounts in Guinness and Mahon is not
conclusive evidence that either Guinness and Mahon or GMCT knew or approved of such
behaviour. The evidence relating to the possibility that these companies actively
participated in a scheme of tax evasion must be considered separately.

As already reported, GMCT had a number of deposit accounts in Guinness and Mahon,
and, to an increasing extent over the years, these were used to provide funds for
beneficiaries of trusts of which GMCT was trustee. No evidence has emerged that these
payments were made as a result of decisions by trustees to make distributions to
beneficiaries. Among files of over 50 trusts furnished to the Inspectors by Ansbacher
(Cayman) Limited following litigation in the Grand Court of the Cayman Islands, not a
single document exists minuting a decision of the trustees to make a distribution. On the
contrary, all the evidence points to the request for payment originating with the client and
being processed in Guinness and Mahon (and later in IIB) upon the instructions of Mr
Traynor. GMCT was not informed of the completed transaction until Mr Collery (having
posted the transaction in the secret Irish memorandum accounts or otherwise processed it
internally within Guinness and Mahon) sent a reconciliation statement to Cayman, which
he did on a monthly basis. This is strong evidence that the trust structure was a sham - not
in respect of its legal status at the time of establishment, but in the manner of its operation
- and that GMCT exercised no effective control over the assets nominally under its
control.

The back-to-back loans, considered in more detail further on, are additional evidence that
the trust structure was a legal fiction. One example will suffice to illustrate this. Mr
John Byrne (see Chapter 23) established two complex trust structures, one for Irish and
one for UK business. These trusts were alleged to be completely separate from each
other and from Mr Byrne. All the liquid assets happened to be in one trust, but back-to-
back loans were granted by Guinness and Mahon to a company owned by the trust which
did not have cash, backed by the funds of the other 'independent' trust. No fee was
charged for this financial service. To give what amounted to a cash guarantee to a
stranger, without charge, would be a breach of the trustee's fiduciary duty. That an
experienced trust company such as GMCT approved of such an irregular financial
transaction and that Guinness and Mahon accepted this security suggests that both
institutions viewed these trusts as legal fictions. It seems evident that both trusts were
operated as one in the interest of Mr Byrne with the knowledge and approval of Guinness
and Mahon and GMCT without reference to their legal status.

The Inspectors are of the view that further strong evidence as to the knowledge of GMCT
and Guinness and Mahon, and their involvement and promotion of tax evasion, comes
from a remarkable document produced by Mr Raymond McLoughlin, headed 'Note to
John Furze' (see Appendix III(a)). The Inspectors accept the evidence of Mr McLoughlin
that he himself was not a client of Ansbacher but that he produced this document after a
meeting with Mr John Furze in September 1983, which was arranged by Mr Traynor and
held in the Guinness and Mahon offices in Dublin. Mr Furze, as an executive director of
GMCT, was the named settlor in many of the trusts established by that Company. Mr
Traynor was at that time Deputy Chairman of Guinness and Mahon and was its link with
GMCT. He was also Chairman of GMCT. The 'Note to John Furze' document outlines
the method GMCT used to set up discretionary trusts for their Irish clients. In relation to
the concealment of the names of their clients, the document confirms that Mr Furze
advised Mr McLoughlin that Ansbacher accepted the use of nom-de-plumes by clients in
the listing of the names of the beneficiaries of the trust. It also confirms that individuals
or companies can be included in this list if they contribute $10 to the Red Cross, once a
clause to this effect is inserted in the trust deed.

It reports Mr Furze as stating that the Letter of Wishes in practice bestows upon the initial
owner of the funds the right to instruct the trustees, which is not the case in genuine
trusts. It goes so far as to state:

'in practice the Trustees will do nothing except as instructed by the client or by
such person as is nominated by the client.'

It acknowledges that clients:

'do not like committing instructions to the Trustees to paper, and allows for the
client to have his or her wishes acted upon merely by telephoning the Trustees -
money can be moved, invested or divested from time-to-time simply through a
telephone call to a contact operating on behalf of the Trustees.'

Dealing with a situation where the client wishes to move all of the funds out of the Trust
and discontinue its operation, the document states that it would be:

'legally possible for him to remove the Trust Deed and the Letter of Wishes and
any other correspondence and to obtain a certificate from the Trustees that there
were no copies anywhere'.
Mr Furze was happy at the same time to confirm that:

'the Bank in Ireland can swear to the Revenue as to the non-connection in the
legal sense between any parties it might be inquiring about and any legal Trust
[because] it is factually and legally correct to state that the Client does not own
any of the assets held by the Discretionary Trust and is therefore not in breach of
exchange control regulations'.

This reflects the sham nature of the GMCT trust operations.

The Note to John Furze goes on to outline the advantages of the Cayman Islands as a
location for offshore funds, and the focus is on secrecy and tax avoidance. It points out
that 'there is no taxation in the [Cayman Islands].' It notes the existence of the 'Cayman
Islands Secrecy Act' (the Confidential Relationships (Preservation) Law), and notes that
the Cayman authorities were unlikely to amend this to disadvantage investors, as
'finance' was probably the major economic activity on the Island. It points out that the
British government does not have the power to change the law without the consent of the
Islands' authorities. The Islands' distance and remoteness are extolled as virtues, and, in
a comparison with the Channel Islands, Cayman is favoured for these reasons and also
because:

'it is felt that the [Channel Islands are] more vulnerable in the sense that there is a
suspision [sic] already that the Authorities in the [Channel Islands] and the
authorities in the UK exchange information.'

The document discusses in detail the level of secrecy involved in the trust arrangements.
It notes that all of the GMCT officers dealing with the trust arrangements are bound by
the Confidential Relationships Law, and, in practice, the officers privy to the trust
documents would be limited to:
 1
'X(l) , X(2), JF and perhaps 3 or 4 of his officers.'

It is confirmed that:

'nobody in Dublin other than the two principals would know about any Trust
arrangement.'

The concealment of the trust's existence is almost watertight, and is contrasted to the lack
of confidentiality of a Will (which the Trust can bypass), which:

'even in the [Cayman Islands]. ... would be a registered public document and the
tax authority in any part of the world would be free to look at it.'

No record 'of any kind anywhere in Dublin or any reference in any correspondence
between GMCT and Dublin in relation to any Trust arrangement' would exist and no
duplicate copies of Trust documents would be held anywhere outside of GMCT. In fact,
the document states that for any interested party to identify:

'a possible linkage between an individual and a particular Trust arrangement, it

would be necessary that one or other of the parties who are aware of this
arrangement would disclose that or that through detection work or theft or
accident that sight would be obtained either of the Trust Deed or the Letter of
Wishes or any other correspondence pertaining to the Trust arrangement.'

Mr Furze discussed with Mr McLoughlin the various means by which the linkage
between a client and a Trust arrangement could be concealed. In a section titled
' Towards Minimising the Footprints', an analysis of possible methods of achieving this is
presented. The clear intention is that the Trust Deed and the Letter of Wishes should not
reveal the link with the client, in the event of these documents falling into the hands of

1 'X(l) ' was previously signified in the document as being a person who would act as a conduit
between the client and the trustees.
'interested parties' despite all of the above efforts. The purpose of tax evasion is
pinpointed when the document focuses not on the potential discovery by the Revenue
authorities of the Trust itself, which can be legally disowned by the client, but on the
potential discovery of the assets transferred to the Trust by the client. The source and
size of these assets could give rise to an unwelcome Revenue investigation of the client's
affairs.

The detail and thrust of the 'Note to John Furze' indicates a system of trust arrangements
devised and operated for people of wealth who wished to conceal at least some of their
assets from the relevant authorities. The high level of secrecy apparent from the
document shows that the clear purpose of the GMCT trust operations was to conceal both
the initial investment sum and the ongoing investment held by their clients and to conceal
the identity of those clients.

All of the foregoing strongly suggests that tax evasion was central to the package that
GMCT was marketing with the support and active assistance of Guinness and Mahon.
The ability of the prime mover to dismantle the trust is strong evidence that the scheme
was, by this stage, little more than a charade. The Note to John Furze is further evidence
tending to show that both Guinness and Mahon and GMCT promoted the scheme as a tax
evasion vehicle.

3.5 GMCT accounts in Guinness and Mahon

As described in Chapter 2, GMCT had opened a number of non-resident accounts in its
own name in Guinness and Mahon. Into these accounts GMCT transferred the money of
its Irish clients. During the first few years of the operation of the accounts, Guinness and
Mahon maintained a deposit account ledger, with each separate customer account having
a different code. The customer accounts were maintained by the late Mr Ru Leonard,
who was accounts manager in Guinness and Mahon at the time. The ledger contained on
its face the instruction that no information was to be given to auditors:
 'No authority to supply inform. over the phone or to auditors ... This account is
non resident and details of int. is not therefore to disclose to the Rev. Authorities.
Entries to this account must originate from T.R.L. if not refer to T.R.L.2 If
authority is not received then post to Sundry Persons'

3.6 The memorandum accounts

Some time in the late 1970s, a change occurred, in line with GMCT's policy of
concealment. The deposit account ledger was removed from the books of Guinness and
Mahon and new call and fixed deposit accounts were opened in the name of GMCT.
These accounts, as is clear from an internal audit carried out by Guinness and Mahon's
London parent in February 1989 (see Appendix III(b)), contained funds lodged with
GMCT by Irish and other customers. Those accounts that were held in foreign currency
remained on the books of Guinness and Mahon, bearing the name of GMCT but with a
coded sub-designation. All accounts held in sterling were pooled, and placed in one large
account in GMCT's name. Records of the sub- (or 'memorandum') accounts of the
pooled account did not appear on Guinness and Mahon's books, but instead were kept on
a computer system maintained by Mr Padraig Collery, Mr Leonard's successor as
accounts manager. This computer system, although sharing the same hardware as
Guinness and Mahon's own system, was completely independent of it. Customer names
were not held on this system; instead, each account was identified by a code.

Meanwhile, in Cayman, each Irish customer's account, whether sterling or other

currency, was held in the name of a company allocated to that customer, thus ensuring
that the real client's name did not appear at all. In some cases, companies were 'recycled'
for new clients, making it even more difficult at any given time to identify the true
beneficial owner. As shown in Chapter 2, some depositors whose funds were considered
to be too small to warrant the services of an individual company had their deposits pooled
and held in the name of one of two companies - Poinciana Fund Limited or Hamilton
Ross Limited, where they were sub-designated by the code they held in Dublin.

2
Mr TR ('Ru') Leonard
The system can be exemplified by the following imaginary cases:

(a) Joe Bloggs. American Dollar deposit

Dublin: Funds held in account GMCT re JB (or possibly re JoblogLtd) on the
books of Guinness and Mahon.
Cayman: Funds held in account Joblog Limited.

(b) Mary Smith. Large Sterling deposit

Dublin: Funds held in GMCT pooled account on the books of Guinness and
Mahon.
Record kept in Memorandum Account X/X1.
Cayman: Funds held in account Maysmit Limited.

(c) John Doe. Small Sterling deposit

Dublin: Funds held in GMCT pooled account on the books of Guinness and
Mahon.
Record kept in Memorandum Account X/X2.

Cayman: Funds held in account Hamilton Ross, sub-designation X/X2.

3.7 Concealment of memorandum accounts

The method of maintenance of the memorandum accounts indicates the high level of
secrecy involved on the part of both GMCT and Guinness and Mahon. In 1978, Mr
Furze, who was then one of GMCT's joint managing directors, had written to Guinness
and Mahon, requesting them to provide computer accounting services for the GMCT
accounts. In this letter he states:
'We would only request that you provide such a service on the basis that all
information provided by us remains our sole property as also will all information
stored within the computer programme. Needless to say, we will also require
your written assurance that neither the programme information stored nor the
 accounting records themselves, are made available to any third parties such as
auditors, bank inspectors, etc.'

This indicates that the Cayman bank wanted the details of their accounts maintained
separately from other Guinness and Mahon records and outside of their official records,
thereby ensuring that they would not be disclosed to any of the relevant authorities.

3.8 1976 Central Bank report on Guinness and Mahon

In 1976, the Central Bank examined and reported on Guinness and Mahon. It appears
that during the course of their examination the directors of Guinness and Mahon told
them that the bank held no files or records relating to any transactions between their
customers and the offshore companies, including GMCT. Guinness and Mahon told the
Central Bank that they feared 'that the retention of such files would give grounds to the
Revenue to claim that the companies are managed by Dublin and also individual files
might come into the hands of the Revenue Authorities.' (see Appendix III(c)).

Clients' identities remained secret. The identity of all the persons to whom the codes
referred was known only to Mr Traynor, although Mr Collery and Ms Williams became
aware of the identity of some of the clients. Ordinary staff members working in Guinness
and Mahon were not aware of the significance of these codes, and processed each
transaction as directed by their managers. A data inputter working to Mr Collery in
Guinness and Mahon stated in evidence to the Inspectors that the Cayman records were
stored on diskettes or tapes, separately from other accounts. The diskettes were stored in
a special cabinet which was kept locked, the key to which was held by Mr Collery only.
He would give the staff member in question the key to the cabinet and special headed
paper for her to work on and produce statements. He would also furnish her with the data
which she was to input into the computer. She worked with lists of debits and credits and
was unaware of the significance of the coded references. She handed all work back to Mr
Collery and told the Inspectors that none of it was filed with other Guinness and Mahon
account files. She also handed the cabinet key back to Mr Collery, having locked away
the tapes after completing the tasks. This work was usually done after hours, when few
other staff members were in the office.

3.9 Destruction of Ansbacher's records

On Mr Traynor's death, most of the GMCT records in Dublin were either destroyed by
Mr Furze or brought back by him to Cayman.

3.10 Irish clients' lodgements and withdrawals

Money arrived under GMCT's control by various means. Mr Traynor appears to have
decided the method in each particular case. During the period relevant to this Report,
different foreign exchange control regimes operated which required changes from time to
time in the system of operating the accounts. When the system was first set up, direct
lodgements were the norm. An examination of the GMCT account in Dublin for part of
November 1974 appears to show relatively straightforward records of direct lodgements
(see Appendix III(d)). Over the years this changed and an increasingly confused - and
confusing - lodgement pattern developed as part of the policy of concealment to be
discussed further on.

However, what is clear is that the most usual lodgement method was through Mr Traynor
himself. The Inspectors have received evidence from many clients of Ansbacher to the
effect that they gave bank drafts or cash to Mr Traynor for lodgement to their offshore
accounts. Through Mr Traynor, however, the money reached its final destination by any
one of a number of means - through the Amiens accounts, through a seven-day-notice
account in Guinness and Mahon's name in Guinness Mahon London, or on occasion,
directly into the sterling pooled account in Guinness and Mahon. It also seems that some
clients may have dealt directly with Cayman, bypassing Mr Traynor entirely.

In general, however, it can be said that when an Irish client, whether his funds had been
settled on a trust or simply deposited, wished to make a lodgement or a withdrawal, he
simply contacted Mr Traynor, who, as a signatory on the GMCT accounts, issued the
appropriate instructions. In the case of clients whose funds were in the pooled account,
Mr Traynor would issue an additional instruction, this time to Mr Padraig Collery who
would make the necessary entry in the memorandum accounts. In the case of a
withdrawal, Mr Traynor would give or send the funds to the client, frequently in cash but
sometimes in the form of a bank draft. On occasion, he would arrange to have the
required sum transferred to a bank account in the name of the client outside the
jurisdiction. The Inspectors have received evidence from many of the Irish clients that
they made large cash withdrawals, which Mr Traynor, Mr Collery or Ms Joan Williams
would hand to them either in the offices of Guinness and Mahon or of CRH, or by
arrangement at another venue. For example, Mr David Doyle gave evidence of frequent
meetings with Mr Traynor in the lobby of the Berkeley Court Hotel in Dublin for the
purpose of receiving money he had requested Mr Traynor to withdraw for him. The
Inspectors have also heard evidence from the CRH caretaker and from Mr Traynor's
driver in CRH, who recollected making cash deliveries to clients of Ansbacher. Further
detail on the lodgement and withdrawal of money by Irish clients will be found in
Chapter 15 that deals with the involvement of CRH.

3.11 Payment to Mr Haughey

The example of one of the payments made by Mr Ben Dunne to Mr Charles J Haughey
provides a good picture of the complicated system of transferring funds that was in
operation. In December 1987, a Dunnes Stores cheque for stg£182,630 was given to Mr
Traynor and passed by him to Guinness Mahon London, with instructions for them to
lodge it to clear in a Guinness and Mahon account in the London bank. Six days later,
the Guinness and Mahon account was debited with stg£182,630 and the GMCT sundry
sub company account in Guinness and Mahon in Dublin was credited with the same
amount. Just two days before the money reached the GMCT account, the same account
was debited with IR£204,055.87 (the IR£ equivalent of the sterling figure), which amount
was then credited to an Amiens Investment Limited account in Guinness and Mahon.
Approximately two weeks before this lodgement, IR£105,000 had been debited from the
Amiens Investments Limited account, in the form of an overdraft, and credited to an
ACC loan account in the name of Mr Haughey. Subsequently, amounts of IR£59,000,
IR£30,000 and IR£10,000 were withdrawn from the Amiens account in cash or
transferred to a Haughey Boland account, which was used to facilitate Mr Haughey's
financial affairs. Thus, a cheque which ordinarily could have been lodged by Mr Traynor
in Dublin to a client's account or accounts, was directed through a London account and
two Irish accounts, none of which were in the name of the actual client, before reaching
its final destinations.

It can be seen from this example that, by deliberately complicating the lodgement and
withdrawal system, Ansbacher, through Mr Traynor, made it difficult for anyone to trace
the link between the client and their funds.

3.12 Concealment of clients' identities in statements of account

Only very infrequently were statements of account given or sent to clients in relation to
their GMCT/Ansbacher accounts. Statements of account were under the control of Mr
Traynor and Mr Collery, who arranged for them to be either delivered by hand or posted.
The statements were prepared in such a way as not to provide documentary evidence of
the existence of the account or identify the location where the money was deposited. In
some instances, a hand written account was given, but the document contained no
information as to where the funds were deposited.

The headings of the bank statements, which had been prepared by Ms Williams, would be
removed by Mr Traynor. He would tear off the 'GMCT' (and subsequently 'Ansbacher')
headings with a ruler and give the statements to Ms Williams to arrange delivery to the
client. Thus the client would receive a piece of paper that showed the debits and credits
and balances in the account similar to a normal bank statement, except for the fact that
the name of the bank, the account name and the account reference number had been
removed. Mr Traynor told one client that the statements were unheaded for 'security
reasons'.

3.13 Transfer of Ansbacher's business to 42 Fitzwilliam Square

Mr Padraig Collery left Guinness and Mahon in 1989. At the same time, a computer was
installed in Mr Traynor's office, which had been located on the premises of CRH at 42
Fitzwilliam Square Dublin since 1987, for the purpose of keeping the memorandum
accounts. Mr Collery visited the office regularly to keep the bookkeeping up to date.
Otherwise, everything continued as before, with Mr Traynor receiving lodgements and
arranging payments and transfers from the GMCT accounts in Guinness and Mahon (and
later, in IIB). The only noticeable change was that gradually the internal memos giving
instructions to Guinness and Mahon staff from Mr Traynor became more formal and less
like internal instructions, until, during what may be called 'the IIB period', all
instructions were given formally by letter.

3.14 Transfer of Ansbacher's business to Winetavern Street

After Mr Traynor's death in May 1994, Mr Furze and Mr Collery removed the computer
containing the memorandum accounts from the premises of CRH and brought it to offices
belonging to Mr Sam Field-Corbett in Winetavern Street, Dublin. Here Mr Collery
continued to operate them on behalf of Ansbacher (as GMCT had by then become.).

The memorandum accounts in respect of Ansbacher's business (as distinct from that of
Hamilton Ross) continued to operate until 1996, although the amounts decreased in the
latter years. In the latter years, one of Ansbacher's clients, Mr John Byrne, continued to
hold substantial deposits in Ansbacher's pooled account in IIB and Mr Collery continued
faithfully to record transactions on these deposits in the memorandum accounts
(see Appendix III(e)).

3.15 Back-To-Back Loans

From a very early date, Guinness and Mahon provided loans to clients of GMCT, both
Irish residents and persons not resident in Ireland, backed by the GMCT deposits of those
persons. The facility letters sent by Guinness and Mahon to the Irish residents invariably
failed to mention the GMCT deposit held as security, although any other form of security
was carefully noted. In internal Guinness and Mahon documentation, those loans backed
by GMCT deposits were referred to as 'suitably secured', as the minutes of a meeting of
Guinness and Mahon directors on 20 August 1973 makes clear. Referring to GMCT
deposits in Guinness and Mahon, the minutes say:
 'At present the G.M.C.T. deposits act as security for resident loans, which are
referred to as "suitably secured". '

A former Guinness and Mahon loans officer, Mr Pat O'Dwyer, has told the Inspectors
that he always inserted the phrase 'suitably secured' or 'adequately secured' in loan
documentation where the loan was cash-backed. However, it is important to note that the
term did not necessarily mean that the deposit was located in the Cayman Islands; the
term 'suitably secured' (and its variants - 'adequately secured', 'considered adequate'
etc) was used to describe deposits in any Guinness and Mahon subsidiary outside the
jurisdiction. Thus, it was used in relation to deposits in Cayman, in the Channel Islands
and even in Belfast.

The omission of the security from the facility letters and the coy reference to the
'suitability' of the security leads one to the inescapable conclusion that Guinness and
Mahon wished to keep the existence of the GMCT deposits of Irish residents secret from,
among others, the Irish Revenue authorities. This conclusion is reinforced by very
different behaviour on Guinness and Mahon's part where the GMCT client is a non-
resident. In one such case the facility letter, when dealing with the question of security,
unambiguously states:

'In addition, we shall require a Letter of Guarantee signed by Guinness Mahon

Cayman Trust Ltd., supported by a sum equal to the loan hypothecated in our
favour.' (see Appendix III(f)).

3.16 Limited information to auditors

Mr Traynor personally carried the loan security documents from the Cayman Islands to
Ireland once a year, in order for the Guinness and Mahon auditors to inspect them, so that
they could satisfy themselves as to the security of the Guinness and Mahon cash-backed
loans. However, the auditors were not permitted to take notes of the details contained
therein, nor were they permitted to take copies of them. In this way, the details remained
secret and 'off the books' (see extract from a 1978 Central Bank report at Appendix
III(g)).

3.17 Limited information to Central Bank

Similarly, Guinness and Mahon furnished the Central Bank in 1976 with copies of
security documents relating to the back-to-back loans with Ansbacher, only with the
proviso, to which the Central Bank agreed, that they would not take any notes on their
contents (see Appendix III(c)). In its 1978 report on Guinness and Mahon, the Central
Bank remarked that the degree of secrecy cloaking the back-to-back loan arrangements
was such that no normal banking operation could account for it. The Central Bank
concluded that the secrecy surrounding the system existed for purposes of facilitating tax
avoidance among their customers, and, in a meeting with Guinness and Mahon the
following year, told Guinness and Mahon that this behaviour was not appropriate
(see Appendix III(h)).

3.18 Caveat regarding the 'suitably secured' reference

Two final points are worthy of note. Firstly, many Ansbacher clients whose loans were
described by Guinness and Mahon as being 'suitably secured' said on oath, when
interviewed by the Inspectors, that they were totally unaware that their offshore funds had
been used as security. In most cases, other security also existed, and that security always
appeared on the face of the loan documentation. Many of the clients believed that this
was the only security. The Inspectors have formed the view that Guinness and Mahon
occasionally used the offshore funds of Ansbacher clients as a sort of 'comfort', without
the clients' knowledge.

Secondly, a number of persons have given evidence to the Inspectors to the effect that
they believed the phrase 'suitably secured' was occasionally used in cases where there
was no cash backing the loan, but where Mr Traynor was so satisfied of the financial
standing of the client that he was able to persuade Guinness and Mahon that no security
was necessary.
3.19 Concealment of banking operation from Central Bank.
The Inspectors have concluded in Chapter 5 that there is evidence tending to show that
GMCT engaged in banking activities in Ireland. Nevertheless, it failed to apply at any
stage for a banking licence from the Central Bank, as it was required to do. This
copperfastened the secrecy by means of which GMCT ensured that the funds of its Irish
clients would never come to the attention of any of the relevant Irish authorities.

3.20 Concealment of banking operation from Cayman Authorities

Further, Ansbacher failed to seek approval from the Cayman authorities to 'open outside
the Islands a subsidiary, branch, agency or representative office', which it was required
to do under Section 11 of the Banks and Trust Companies Law since 1989. The only
apparent obstacle to their seeking this approval was the removal of the cloak of secrecy
that would have resulted.

3.21 Conclusion
The Inspectors are satisfied that the policy of secrecy surrounding the memorandum
accounts, the contents of the Note to John Furze, the placing of the funds in non-resident
accounts in the name of GMCT, the fact that Irish clients were permitted to withdraw
sums from these accounts through the medium of Mr Traynor, who issued instructions as
a GMCT signatory, and the fact that payments were frequently made in cash to the
clients, when taken together constitute evidence tending to show that GMCT and
Guinness and Mahon may have conspired together to defraud the Irish Revenue
Commissioners.
 CHAPTER 4

EXTENT OF THE IRISH BUSINESS OF ANSBACHER (CAYMAN) LIMITED

INDEX
Page
4.1 Introduction 66

4.2 Overall General Business 66

4.3 Dublin Deposits 68

4.4 Audited accounts of GMCT 68

4.5 Hypothecated Deposits 72

4.6 GMCT business relative to Guinness Mahon business 73

4.7 Contribution of GMCT to Guinness and Mahon 75

4.8 The IIB years 77

4.9 Back-to-Back loans and guarantees 78

4.10 Number of clients 78

CHAPTER 4

EXTENT OF THE IRISH BUSINESS OF ANSBACHER (CAYMAN) LIMITED

4.1 Introduction
For the purposes of their investigation and having regard to the High Court Order of the
22 September 1999, the Inspectors used the following definition of the Irish business:

'Business which was carried on for a 'Client' by the Company in the State
or in the case of a 'Client' who is an Irish Resident if business was carried
on for him by the company anywhere in the World.'

The definition of a 'Client' is discussed further in this report in Chapter 22.

The Irish business of Ansbacher is described in this Chapter under two headings - firstly,
the extent of the corporate business and secondly, the number of clients involved.

4.2 Overall Company Business

From a review of its records, Ansbacher has informed the Inspectors that the Company
had four distinct areas of operation in the years prior to and including 1988:

1. Business generated from the Americas and the Caribbean. This category
represented the bulk of GMCT's business.

2. Business generated from the UK and Europe, which was only a very small
proportion of the total.
3. Business originating from Ireland, whether or not introduced by Mr. Traynor,
which by the 1980s, it is claimed, represented a small and declining proportion of
GMCT's business.

4. Poinciana Fund Limited business which was administered by Mr. Traynor and
Mr. Furze who transferred most of this business to Hamilton Ross Company
Limited in or about September 1988.

Mr Traynor made regular visits to Cayman. It was apparently his practice to prepare
detailed reports for the Irish management of Guinness and Mahon following these visits.
The Inspectors found only a small number of these reports. However, the following
figures extracted from his reports of November 1980 and October 1984 give an indication
of the level and type of business being conducted globally by GMCT in the late 1970s
and early 1980s.

Companies and trusts Individual depositors Customers' deposits

under management (Irish and non-Irish) (Irish and non-Irish)
(Irish and non-Irish)
Stg£m
31 March 1978 560 143 21
30 April 1979 634 192 29
30 April 1980 685 230 44
31 October 1980 709 250 56
30 April 1982 824 335 116
30 April 1983 896 388 141
30 September 1983 922 420 163
30September 1984 943 462 204

In addition, he reported the following staff numbers at 30 September 1984:

Total 36
Caymanian 29
Non-Caymanian 7
Ansbacher has informed the Inspectors that in its view 'GMCT's Irish sourced business
in the mid-1970s accounted for no more than 20% of the total'. In 2001, it has further
stated that it 'is currently administering only a few client relationships which fall within
the definition of "Irish business" contained in the Irish High Court's Order of 22
September 1999, which has been integrated into their other business'.

4.3 Dublin Deposits

From its incorporation until January 1991, GMCT maintained deposits in Dublin with
Guinness and Mahon. At that juncture, the deposits were transferred to IIB. In 1997 the
deposits were withdrawn.

The audited accounts of GMCT show that the Dublin deposits grew from £3.6m in 1972
to almost £56m by 1987. It is tempting to surmise that this should give a good indication
of the extent of the Irish business.

However, it is important to keep in mind that these figures represent only the assets and
liabilities of the Company itself. Any monies controlled by trusts or companies on behalf
of Irish customers would not be reflected in the accounts of the Company unless those
trusts or offshore companies in turn placed the money back on deposit with GMCT.
Even then the monies would not necessarily be deposited in Dublin. For example, the
Inspectors have come across instances where money belonging to Irish clients was
deposited elsewhere, in particular with Guinness Mahon London.

4.4 Audited accounts of GMCT

Copies of the audited accounts of GMCT from March 31, 1971 onwards were available
to the Inspectors. These accounts were of particular interest up to 1987 as, taken in
conjunction with Guinness and Mahon accounts, certain relevant information can be
extracted therefrom. It must be borne in mind that these accounts refer to the overall
business of GMCT and not solely the Irish business.
Profit and loss accounts
Appendix IV(a) summarises the profit and loss accounts available for the period while
Graph 1 below illustrates the net profit figures in graphic form.

GRAPH 1
GMCT NET PROFITS

1-

1 1 .1.
0 . 1 .
•
• Net profit

The main categories of income available to the company were net banking revenue
(being the difference between interest earned and interest payable) and management and
trust fees. The latter was an extremely important source being almost equivalent to, and
in some years greater than, net banking revenue.

The figures indicate a sixteen fold increase in net profit between 1972 and 1987
generated by an almost fifty fold increase in total revenue in the same period. The
following figures illustrate the position at the beginning, middle and at the end of the
period:
 1972 1981 1987

STG£000 STG£000 STG£000

Net banking income 16 607 1,652

Other income 45 519 1,368
61 1,126 3,020

Net profit 55 483 871

There was a significant increase in profits in the first half of the 1980s followed by an
easing back in the mid 1980s.

Balance sheets
Appendix IV(b) summarises the balance sheets from 1971 through 1987 while graph 2
illustrates the growth in net assets in graphic form.

GRAPH 2
GMCTNET ASSETS
A similar overall picture emerges to that illustrated by the profit and loss accounts, with
the net assets of the company increasing from £10,000 to in excess of £6.6 million over
the period.

Most striking is the increase in customer deposits (see graph 4 below). These amounted
to slightly over £5.6 million in 1972 and had grown to £149 million by 1987. They
peaked at over £203 million in 1984.

It appears that up until 1975 most were deposited with the Dublin bank. A change
occurred in the year to March 1976 when the ratio moved in favour of London (£3
million in Dublin as opposed to £5 million in London). By 1984 the Dublin deposits had
dropped to 19% of the London figure.

The 1986 and 1987 accounts show a reversal of this trend. By 1987 the Dublin deposits
amounted to £56m as against £81m in London (69%). Dublin deposits more than
doubled from £25m to £56m in the 3 year period 1984 to 1987.

Examples illustrate the position as follows.

1975 1981 1984 1987*

Stg£000 Stg£000 Stg£000 Stg£000

Customer deposits in
GMCT 9,628 63,833 203,937 149,408
GM Dublin 5,224 9,397 25,154 55,964
GM London 303 34,867 129,888 81,209
GMCT loans to customers 3,316 13,126 50,055 14,802

The bulk of the money deposited with the Company by its customers was simply, in turn,
deposited by the Company with its parent bank in either London or Dublin. Over time

Note: The figures for loans to customers and customer deposits were shown net of hypothecated
amounts after 1984.
the proportion of the deposits which were used for normal banking, that is lending to
customers, became less important as a proportion of the total business. For example, in
1975 approximately 34% of customer deposits were used to fund customer lending. By
1987, this had fallen to 10%, showing that customer lending had fallen to a very small
proportion of its activities.

4.5 Hypothecated Deposits

From 1976 to 1983 the Cayman auditors disclosed the hypothecated amounts (i.e. the
amounts of the deposits used to secure back-to-back lending) by way of note to the
accounts. The accounting policy changed in 1984. From then on the amount of
hypothecated funds appears to have been netted off against the figures for both customer
deposits and advances to customers and was not disclosed.

These figures disclosed, as compared to the Dublin deposits, are as follows:

Hypothecated Dublin
Funds Deposits

STG £000 STG £000

March 31, 1976 2,281 3,434

March 31, 1977 2,782 2,903
March 31, 1978 1,449 3,331
April 30, 1979 1,357 4,924
April 30, 1980 2,187 7,663
April 30, 1981 10,631 9,397
April 30, 1982 21,985 26,980
Sept 30, 1983 34,329 30,970
Sept 30, 1984* 38,759 25,154

By 1983, the amounts hypothecated exceeded the Dublin deposits. This shows that the
practice of making back-to-back or hypothecated loans was not confined to the Irish
business.

• Per Mr Traynor's management report of 31 October 1984

4.6 GMCT business relative to Guinness and Mahon business
Copies of the audited accounts of Guinness and Mahon were available to the Inspectors
for the period from 1968 to 1998.

Little information is revealed in these accounts with regard to the operations of GMCT or
Ansbacher Cayman Ltd. The overall picture is of Guinness and Mahon as a company
with a good profit record in the 1970s and early 1980s which experienced severe
financial difficulties from the mid 1980s to the mid 1990s.

The relationship of GMCT to Guinness and Mahon can be considered in three separate
periods.

Period to 1983
This was a period of solid profitability and steady growth. Guinness and Mahon was in a
position to consistently pay dividends which increased from £39,000 in 1974 to £150,000
in 1983. The most noteworthy feature of this period is the sudden increase in profits in
1982 and 1983.

The first mention of GMCT is in the accounts for the year ended April 12, 1971 where
it is stated that its contribution to the consolidated profit was £17,322.

In 1982 the Guinness and Mahon profits amounted to £1.3m. GMCT's operating profit
for that year was £765,000 so that the group profit of £2m would appear to have been
contributed by Guinness and Mahon and GMCT with presumably negligible
contributions from the other subsidiaries.

For the 17 month period ended September 30, 1983 the roles were reversed.
Consolidated profit amounted to £2.6m. Of this GMCT contributed £1.2m while the
contribution of Guinness and Mahon was down to £884,000.
1984 to 1988
In September 1984 Guinness and Mahon disposed of a number of its overseas
subsidiaries by way of inter company sale to GMOIL, a fellow subsidiary of the London
parent. The difficulties experienced by Guinness and Mahon at that time have already
been dealt with in Chapter 2. As a result of the inter-company sale the 1984 accounts of
Guinness and Mahon recorded a profit of £2.8m. In reality it had made an operating loss
of £1.4m in that year. This was turned into profit by an extraordinary profit of £4.2m
arising on the sale of the overseas subsidiaries.

Graph 3 compares the profits of GMCT, Guinness and Mahon and the Guinness and
Mahon group in the critical 1977 to 1986 period. This indicates that GMCT maintained a
stable profit record while the results of Guinness and Mahon and its subsidiaries moved
into loss in the second half of the 1980s.

GRAPH 3
GMCT/GMI/Group profits
1977 to 1986

PGMCT BGMI PGrcup~|

Guinness and Mahon incurred substantial losses in two years out of three from the mid
1980s with only modest profits in every third year or so. The Irish group no longer had
the benefit of the contribution of GMCT, which in the meanwhile continued to generate
healthy profits of about three quarters of a million pounds per annum. This was therefore
a period of considerable change for Guinness and Mahon. Among the changes were:

• the resignation of several directors including Mr Traynor on May 2, 1996;

• the replacement of Messrs Touche Ross as auditors by Messrs Coopers &

Lybrand;

• the ongoing losses required substantial injections of capital. The share capital of
the company increased from £1m in 1986 in stages to £7.3m by 1993. At the
same time the share premium account increased from £50,000 to £3.9m;

• the 1988 accounts record redundancy payments of £1.6m in addition to the bad
debt reserve of £5m;

1988 onwards
As described in Chapter 2, Chichester Investments Limited, owned by Messrs Traynor,
Furze, Collins and Hart, purchased GMCT from GMOIL in 1988 and, within months,
sold a majority stake in it to Ansbacher. This had implications for Guinness and Mahon.
The deposits, which had previously been placed by a fellow Guinness and Mahon group
member were now third party deposits. This must have been viewed with some concern
by Guinness and Mahon management as the GMCT or Ansbacher deposits represented
some 35% of its deposit base at that time. The agreement for the sale of GMCT to
Chichester Investments Limited preserved the level of London deposits on a reducing
basis up to September 1990. As a matter of practice, the Irish deposits also followed this
pattern.

4.7 Contribution of GMCT to Guinness and Mahon

The Inspectors considered the importance of GMCT as a contributor to the assets and
profits of the Irish group. The concern that arose at the time of the sale of the Company to
Ansbacher was a clear reflection of the fact that Guinness and Mahon management was
fully conscious of the importance of this business as a contributor to Guinness and
Mahon profits.

Graph 4 shows the total customer deposits as revealed in the balance sheets of GMCT
and Guinness and Mahon. It is noteworthy that from 1982 onwards GMCT had a higher
level of customer deposits than Guinness and Mahon peaking at over £200m in 1984.*

Graph 4
GMCT Customer Deposits v GMI Customer Deposits

250,000,000

200,000,000

150,000,000

100,000,000
—
ii —
- -

—
50,000,000

0
J J rl J
1973 1974 1975 1976
rl rl
1977 1978
rl 1 1
1979 1981 1982 1983 1984

• GMCT DOM!

Graph 5 illustrates the relationship between the GMCT balances at Guinness and Mahon
(the Dublin deposits) and the total of customers current and deposit accounts appearing in
the Guinness and Mahon balance sheet. Guinness and Mahon customer deposits grew
from £25m in 1973 to £100m in 1984, while the GMCT deposits with Guinness and
Mahon ranged from £5.5m to £21.3m peaking at £32.7m in 1982. Thus the GMCT
deposits were an important feature of the Guinness and Mahon balance sheet. Typically
they amounted to between 10% and 20% of non-group customer deposits but peaked at

* GMCT was no longer a subsidiary of Guinness and Mahon after 1984

40% in 1982. As mentioned above, the deposits were said to have amounted to some
35% of non-group deposits by the time of the sale of GMCT to Ansbacher in 1988.

GRAPH 5
GMCT balances v GMI current & deposit accounts

«.120
C
0

1
100

80
|

J JJ r717
60

40

20
1 r i-l nz m c l
1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984
0
• GMCT balance DCunent & deposit accounts |

4.8 The IIB years

IIB has informed the Inspectors that that some £96m passed through the Ansbacher/
Hamilton Ross accounts with IIB during the period 1991 to 1997. In addition, IIB
provided the following year end deposit balances for both Ansbacher and Hamilton Ross:

31 December: Ansbacher Hamilton Ross Total

IR£ IR£ IR£

1991 21,343,476 21,343,476

1992 11,735,959 11,621,708 23,357,667
1993 9,777,211 11,347,444 21,124,655
1994 5,921,746 11,007,911 16,929,657
1995 2,438,546 9,627,439 12,065,985
1996 1,669,575 13,873,788 15,543,363
1997 1,596,124 585,309 2,181,433
4.9 Back-to-back loans and guarantees
In the case of IIB, formal hypothecation of Cayman deposits occurred in respect of both
loans and guarantees given by IIB on behalf of Cayman. For the years 1991 to 1997 the
amounts were approximately:

Sterling £

1991 9.7m
1992 16.2m
1993 19.01m
1994 20.7m
1995 22.1m
1996 3.9m
1997 2.7m

4.10 Number of clients

The Order of the Grand Court of Cayman made on 24 May 2001 precluded Ansbacher
from identifying to the Inspectors its clients. However, the Company was in a position to
furnish the Inspectors with certain information regarding the number of clients as
opposed to the identity of the clients. The Inspectors had furnished to the Company a list
of persons in respect of whom the Inspectors had some information indicating that they
might be clients of the Company. Ansbacher was able to indicate to the Inspectors that
there were only 28 clients known to the Company who did not appear on the list
furnished by the Inspectors. In addition, the Company indicated that an unidentified
number of persons appearing on the list were not in fact clients of the Company.

Since receipt of that information, the Inspectors have refined further their list of clients
by excluding certain persons in respect of whom there was insufficient evidence to
conclude that they were a client. The Inspectors also excluded the names of corporate
entities used by clients as a vehicle for their investments, except in the small number of
cases where the principals of such entities were not known. In addition, they have
concluded that another 25 persons (additional to the persons appearing on their list
forwarded to the Company) were or are clients. If one assumes that the Inspectors have
not mistakenly excluded any person from their original list, then it might appear
reasonable to conclude that the Inspectors have identified all but three of the clients of the
Company. However, some allowance must be made for frailties in record-keeping and
research. Accordingly, while the Inspectors are satisfied that they have identified the vast
majority of the clients, they cannot report with certainty that only three clients remain
unidentified. The Inspectors have identified a total of 190 clients.
 CHAPTER 5

THE WRONGDOING OF ANSBACHER (CAYMAN) LIMITED

INDEX

Page
5.1 Introduction 82

5.2 Conducting its affairs with intent to defraud a creditor of some

of its clients 82

5.3 Criminal Offences 83

5.4 Breaches of the Companies Acts 83

5.5 Unlicensed banking 85

5.6 Breaches of the taxation code 89

5.7 Taxation on Irish profits 89

5.8 Return to the Revenue Commissioners 91

5.9 Taxation on Illegal Trading Activities 93

5.10 Withholding tax on interest 93

5.11 Reporting of interest 94

5.12 Deposit Interest Retention Tax (DIRT) 95

5.13 Operation of PAYE 95

5.14 Breaches of Cayman law 97

CHAPTER 5

THE WRONGDOING OF ANSBACHER (CAYMAN) LIMITED

5.1 Introduction
As appears from the Order of 22 September 1999 appointing the Inspectors, they are
required, at paragraph 2:

'(c) to examine whether the Companies Acts 1963-1990 were breached by the
Company..... and if so to identify the provisions involved.....'
and
'(d) to examine whether the affairs of the Company were conducted with
intent to defraud its creditors or the creditors of any other person or
otherwise for fraudulent or unlawful purpose and if so to identify the
statutory provisions involved.....'

The Inspectors considered it relevant also to examine whether or not there was evidence
tending to show that Ansbacher carried on an unlicensed banking business, was in breach
of the Taxation Code or breached certain aspects of Cayman law.

5.2 Conducting its affairs with intent to defraud a creditor of some of its clients
As has been set out in the preceding chapters of this report the Inspectors are satisfied
that, in the course of conducting its Irish business, Ansbacher provided a range of
services to clients which were calculated to facilitate those clients in the evasion of their
taxation liabilities. The Inspectors are satisfied that there is evidence tending to show
that some of the clients of Ansbacher availed of its services for that purpose and did so
with Ansbacher's knowledge. So far as sub-paragraph (d) of the Order is concerned the
Inspectors are satisfied therefore that there is evidence tending to show that the affairs of
Ansbacher were conducted with intent to defraud a creditor of some of its clients, namely
the Revenue authorities.

5.3 Criminal Offences

The conclusion that there is evidence tending to show that Ansbacher conducted its
affairs with intent to defraud a creditor of some of its clients leads the Inspectors to
conclude that there is also evidence tending to show that Ansbacher was guilty of a
number of criminal offences including:
(a) The common law offence of conspiracy (with, inter alia, some of its
clients) to defraud, which is an offence punishable by a fine or
imprisonment; and
(b) The offence of knowingly aiding, abetting, assisting, inciting or
inducing another person to make or deliver knowingly or wilfully any
incorrect return, statements or accounts in connection with their tax
contrary to the provisions of the appropriate tax legislation now
consolidated in Sections 1056 and 1078(2) of the Taxes Consolidation
Act 1997.

5.4 Breaches of the Companies Acts

The Inspectors are also required to consider whether Ansbacher has breached any of the
provisions of the Companies Act 1963-1990. In this context, it is important to bear in
mind that Ansbacher is a company incorporated outside the State and relatively few of
the provisions of the Companies Acts therefore apply to it. However, Part XI of the
Companies Act 1963 ('1963 Act') applies specifically to companies incorporated outside
the State that have an established place of business within the State. The Inspectors are
satisfied that Ansbacher had established places of business within the State, being at first
the premises of Guinness and Mahon and later the premises of CRH plc and accordingly,
Part XI of the 1963 Act applies to Ansbacher.

The principal purpose of the provisions contained in the 1963 Act is to ensure that some
basic information is available in Ireland in relation to companies incorporated outside the
State but doing business in Ireland. Thus, Section 352 requires such a company, within
one month of the establishment of a place of business within the State, to deliver to the
Registrar of Companies certain basic information including:

(a) A certified copy of its constitutional documents (e.g. the Memorandum

and Articles of Association) and, if applicable, a certified translation
thereof;
(b) Particulars of its directors and secretary;
(c) The names and addresses of persons resident in the State who are
authorised to accept service of process notices and the like on behalf of
the company;
(d) The address of the company's principal place of business in the State;
(e) Any changes in all or any of the aforementioned documents and
particulars.

By Section 353, the company is obliged, if there is any alteration in any of the foregoing,
to deliver a return to the Registrar of Companies containing the prescribed particulars of
the alteration.

Pursuant to Section 355, Ansbacher was obliged to exhibit conspicuously on every place
where it carried on business in the State the name of the company and the country in
which it is incorporated. By Section 357, Ansbacher, if it ceased to do business in the
State (which it did not do earlier than 1995) was obliged to forthwith give notice of the
fact to the Registrar of Companies.

It was of the essence of Ansbacher's Irish business that it should be conducted in secret.
The Inspectors have detailed elsewhere the lengths to which Mr Traynor went to conceal,
even in statements of account given to clients, the fact that Ansbacher was doing business
in Ireland. It comes as no surprise therefore to find, as the Inspectors do, that Ansbacher
breached each and every one of the provisions referred to above. Such breaches cannot
be described as inadvertent, given that it was a conscious decision of Ansbacher's to
conduct its business in a secret fashion.

By Section 358 of the Act of 1963, it is provided that if any company fails to comply
with any of the provisions of Part XI of the Act, the company and every officer or agent
of the company who knowingly and wilfully authorises or permits the default is liable to
a fine not exceeding £500. The Inspectors are satisfied that Ansbacher has failed to
comply with each of the foregoing provisions. 1

5.5 Unlicensed banking

The business of banking in Ireland is regulated, inter alia, by the provisions of the Central
Bank Act 1971 (as amended) and the Central Bank Act 1989. It is necessary to know
something of the provisions of these Acts before being in a position to address the
question of unlicensed banking.

Section 2 of the Act of 1971 defines banking business as meaning business that consists
of:

'(a) the business of accepting deposits payable on demand or on notice or

at a fixed or determinable future date, but excluding deposits with a
trader from persons employed by him in his trading business or from
his customers in the normal course of his trading business and deposits
or instalments in respect of the letting or selling of goods under a Hire
Purchase Agreement or a Credit Sale Agreement, or

1
The Inspectors have considered also the extent to which Ansbacher might be said to
have breached the provisions of the European Communities (Branch Disclosure) Regulations of
1993,which came into force in the State on 1 February 1994. The disclosure requirements
contained in the Regulations are similar to those contained in Part XI of the 1963 Act save that
they apply to companies having a branch in the State as opposed to an established place of
business. Given the overlap between the two provisions and given the fact that the conduct of
business by Ansbacher in Ireland ceased in or about 1995 the Inspectors have not considered
further the provisions of these Regulations.
 (b) the business aforesaid and any other business normally carried on by a
bank,'

Section 29 of the Central Bank Act 1989 replaced the definition of banking business
contained in Section 2 of the Central Bank Act 1971 with a more detailed definition, the
text of which is set out in the footnote below. 2 However, for present purposes it does not
materially alter the matters under consideration.

Section 7 of the 1971 Act provides (in so far as is relevant) that a person shall not on his
own behalf or on behalf of any other person in or outside the State carry on banking
business or hold himself out or represent himself as a banker or as carrying on banking
business unless -

'(a) he is a holder of a licence, and

(b) he maintains a deposit in the Central Bank of an amount determined in
accordance with the provisions of the Act.'

2
Section 2 of the Act of 1971 is hereby amended -
'...'banking business' means business which consists of -
(a) the business of accepting deposits payable on demand or on notice or at a fixed or
determinable future date, or
(b) the business of taking funds, other than deposits, from the public payable on
demand or on notice or at a fixed or determinable future date (whether or not
involving the issue of securities or other obligations, however described), but
excluding -
(i) deposits with a trader from persons employed by him in his trading business or
from his customers in the normal course of his trading business and deposits or
instalments in respect of the letting or selling of goods under a Hire Purchase
Agreement or a Credit Sale Agreement, or
(ii) the taking of other funds by persons from the public where it can be shown that -
(I) no part of the business activities of the persons so taking or of any other
person who is financed wholly or substantially out of those funds, and
(II) such funds are, in the normal course of business, taken on a casual or
incidental basis only,
or
(III) monies taken solely as a premium in respect of the issue or renewal of a
Life Assurance Policy issued by a holder of an authorisation under the
European Communities (Life Assurance) Regulations, 1984 (S.I. No. 57 of
1984), or
either or both of the businesses aforesaid and any other business normally
carried on by a bank and 'banking' and words cognate thereto shall be
construed accordingly;'
Subsection 2 of Section 7, in so far as is relevant, deems a person to hold himself out as a
banker:

'(a) if, being a body corporate carrying on any business, the name of the
body includes any of the words bank', banker' or banking' or any
word which is a variant, derivative or translation of or is analogous to
any of those words or.....
(d) in any case, if by the use, in an advertisement, circular, business card
or other document, of any of the words bank', banker' or banking' or
any word which is a variant, derivative or translation of any of those
words or any word or phrase analogous thereto, he holds himself out
or represents himself as conducting or being willing to conduct
banking business.'

Section 58 of the Act of 1971 provided that any person who contravened Section 7 of the
Act should be guilty of an offence and should be liable on summary conviction to a fine
not exceeding £100 or on conviction on indictment to a fine not exceeding £5,000. A
continued contravention of Section 7 after conviction rendered the person liable to a
further conviction on indictment and to a fine not exceeding £250 for each day on which
the contravention was continued. These penalties were increased significantly by Section
9 of the Central Bank Act 1989 so that, for example, a conviction on indictment exposed
the person convicted to a fine not exceeding £50,000 or to a term of imprisonment not
exceeding five years or to both.

The Inspectors are satisfied that there is evidence tending to show that Ansbacher carried
on banking business in Ireland. In particular:

(a) Irish clients were able to lodge and withdraw the funds in their
Ansbacher accounts in Ireland. Up to 1988, these transactions were
carried out in Guinness and Mahon and after that date, principally on
 the premises of CRH. Occasionally, Mr Traynor would meet people by
arrangement to conduct their transactions, or money would be delivered
to their homes by Mr Traynor's driver or by the CRH porter. A number
of persons have given evidence to the Inspectors that they made
lodgements on the premises of CRH.

(b) Transactions in relation to Ansbacher funds of Irish clients were

entered on a computer on the premises of Guinness and Mahon (and
later on the premises of CRH) weeks before similar entries were made
in Cayman. To quote the internal audit report of Guinness and Mahon
of February 1989, Mr Padraig Collery acted in practice as 'the Dublin
based agent of Ansbacher.' The report went on to state:

'All transactions relating to [the] deposits are initiated and

processed by [Mr Collery]. In addition to negotiating with both
parties to the transactions, he raises accounting entries and
prepares input vouchers, deals slips etc. for both the parties
(Guinness and Mahon and the customers of Ansbacher
Limited) [Mr Collery] together with certain agent[s] of the
customers negotiates not only interest payable on the Customer
Deposits but also interest payable on the Ansbacher Deposits.'

Furthermore, there is evidence that Ansbacher held itself out as carrying on banking
business. Between November 1992 and September 1994, it was registered as 'Cayman
International Bank and Trust Company Limited'. Letters emanating from 42 Fitzwilliam
Square were on headed paper bearing this name and requesting that, where appropriate,
replies be directed to 42 Fitzwilliam Square. Similarly, the 'Ansbacher Limited' headed
notepaper used by Mr Traynor throughout most of 1991 carried the legend 'A Member of
the Henry Ansbacher Holdings Plc Merchant Banking Group'. By these communications,
Ansbacher held itself out as being engaged in the business of banking.
Ansbacher did not have the licence required by Section 7 of the Central Bank Act 1971
(as amended) to carry on the business of banking in Ireland or to hold itself out as
carrying on such a business. Indeed, it did not even apply for such a licence (see
Appendix V(a)). The Inspectors are therefore satisfied that there is evidence tending to
show the commission of a criminal offence.

5.6 Breaches of the taxation code

The question of whether there is evidence tending to show that Ansbacher was in breach
of the taxation code has been referred to in this Report in general terms. It is dealt with
here in some detail.

5.7 Taxation on Irish profits

Certain taxation consequences follow from a finding that Ansbacher had established a
place of business in the State. In short, the Irish branch of a non-resident company
carrying on business in the State is subject to Irish tax as if it (the branch) were resident
in the State.

Ansbacher was formed in 1971 and accordingly part of its commercial activities would
pre-date the coming into force of the Corporation Tax Act, 1976. At that time, the
primary tax legislation dealing with the activities of foreign persons carrying on business
in the State was contained in Chapter II of Part IX of the Income Tax Act 1967.
However, as the preponderance of Ansbacher's activities related to the period after the
1976 Act came into force and its import is the same as the legislation that pre-dated it, the
following comments are made in the context of the 1976 Act. The provisions of the
Corporation Tax Act 1976 have since been incorporated into the Taxes Consolidation Act
1997.

Section 1(5) of the Corporation Tax Act 1976 provides that the term 'company' for the
purposes of corporation tax means any body corporate. Thus, it includes a company
registered abroad. Section 6(1) of the Act then goes on to provide as follows:
 'Subject to any exceptions provided for in this Act, a company shall be
subject to corporation tax on all of its profits wherever arising.'

This suggests that foreign companies could be subject to Irish corporation tax
notwithstanding the fact that such companies might have no connection whatsoever with
Ireland. However, the ostensibly wide remit of Section 6(1) is restricted by Section 8
which provides as follows:

'(1) A company not resident in the State shall not be within the charge to
corporation tax unless it carries on a trade in the State through a branch
or agency but, if it does so, it shall, subject to any exceptions provided for
by this Act, be chargeable to corporation tax on all its chargeable profits
wherever arising.

(2) For purposes of corporation tax the chargeable profits of a company not
resident in the State but carrying on a trade there through a branch or
agency shall be—
(a) any trading income arising directly or indirectly through or from the
branch or agency, and any income from property or rights used by, or
held by or for, the branch or agency (but so that this, paragraph shall
not include distributions received from companies resident in the
State); and
(b) such chargeable gains as, but for this Act would be chargeable to
capital gains tax in the case of a company which is not resident in the
State:

Provided that such chargeable profits shall not include chargeable gains accruing
to the company on the disposal of assets which, at or before the time when the
chargeable gains accrued, were not used in or for the purposes of the trade and
were not used or held or acquired for the purposes of the branch or agency.'
The effect is that a non-resident company is liable to corporation tax only on the profits
and gains attributable to its Irish branch.

The Inspectors are satisfied that Ansbacher carried on business in the State through a
branch or agency in that they have concluded that Ansbacher had an established place of
business within the State. The consequence is that the profits of such branch were liable
to corporation tax and the appropriate tax returns and payments should have been made to
the Revenue Commissioners.

5.8 Returns to the Revenue Commissioners

Prior to the introduction of self-assessment the onus for taking the initiative in relation to
the obtaining returns and the assessment of taxes rested with the Inspector of Taxes. For
example, Section 169 of the Income Tax Act 1967 provided:

'Every person chargeable under this Act, when required to do so by any general
or particular notice given in pursuance of this Act, shall, within the period limited
by such notice, prepare and deliver to the inspector, a statement in writing as
required by this Act, signed by him, containing—

( b ) the amount of the profits or gains arising to him, from

each and every source chargeable according to the respective
schedules, estimated for the period and according to the provisions
of this Act. '

Similarly Section 143 of the Corporation Tax Act 1976 provided:

'A company may be required by a notice served on it by an inspector or

other officer of the Revenue Commissioners to deliver to the officer
within the time limited by the notice a return of the profits of the
company computed in accordance with this Act. '
However, the onus did not rest solely with the Revenue. The tax legislation contains
provisions which oblige taxpayers who have a liability to taxation to so inform the
Inspector of Taxes. The purpose, of course is to enable the inspector to request the
relevant returns and make the appropriate assessments.

Section 5 of the Finance (Miscellaneous Provisions) Act 1968 (now section 876 Taxes
Consolidation Act 1997) provided that:

'Every person who is chargeable to income tax for any year of

assessment and who, in relation to that year, has not been given a
notice under section 169 or section 172 of the Income Tax Act, 1967,
and has not made a return of his total income, shall, not later than one
year after the end of the year of assessment, give notice to the inspector
of taxes that he is so chargeable.'

Section 142 of the Corporation Tax Act 1976 applied to companies for this purpose from
April 1976 onwards:

'(1). Every company which is chargeable to corporation tax for any

accounting period and which has not made a return of its profits for that
accounting period shall, not later than one year after the end of that
accounting period, give notice to the inspector that it is so chargeable:
Provided that this subsection shall not impose a duty to give any notice
before the 6th day of April, 1976.

(2) Where a company fails to give a notice which it is required to give

under this section—

a. the company shall be liable to a penalty of £500 and, if the failure

continues after judgement has been given by the court before which
 proceedings for the penalty have been commenced, to a further penalty
of £50 for each day on which the failure so continues, and

b. the secretary of the company shall be liable to a separate penalty of

£100.'

Following the introduction of self-assessment it became mandatory, under Section 10 of

the Finance Act 1988, to make a return without being required to do so by an Inspector of
Taxes.

Apart from the penalties recited in section 142 of the Corporation Tax Act 1976, Sections
500 and 503 of the Income Tax Act 1967 (now Sections 1052 and 1054 Taxes
Consolidation Act 1997) imposed penalties for failure to make a return. Prior to the
introduction of self-assessment these penalties could be incurred only if the failure
occurred after an Inspector of Taxes had requested a return. Following the introduction
of self-assessment, failure to make the relevant mandatory returns incurs the relevant
penalties.

5.9 Taxation of Illegal Trading Activities

The Inspectors have concluded that there is evidence tending to show the commission of
a criminal offence by the Company in that it carried on an unlicensed banking business in
the State. Prior to the enactment of Section 19 of the Finance Act 1983 (now Section 58
Taxes Consolidation Act 1997), the profits from an illegal trade were not assessable to
tax. That section brought such profits within the charge to tax. It applies to assessments
made on or after 8 June 1983.

5.10 Withholding tax on interest

Section 31 of the Finance Act 1974 imposed an obligation on certain persons to withhold
income tax when paying interest and to account for that tax to the Revenue
Commissioners. This legislation remains in force and is now contained in Section 246
Taxes Consolidation Act 1997. However, it was superseded, in the case of banks, by the
introduction of DIRT in 1986.

In summary, the legislation imposes an obligation to withhold income tax at the standard
rate on payments of interest by:

• A company
• Any person paying interest to a non-resident.

It provides an exemption in the case of interest paid by a bank in the ordinary course of
carrying on a bona fide banking business in the State.

The inspectors are satisfied that there is substantial evidence that Ansbacher carried on a
banking business in the State. However, they are not satisfied that this was a bona fide
banking business on the grounds that it was not licensed. Therefore Ansbacher had an
obligation to withhold income tax at the standard rate on payment in the State of interest
to its customers and should have accounted to the Revenue Commissioners for this
taxation.

5.11 Reporting of interest

Section 175 of the Income Tax Act 1967 (now Section 891 of the Taxes Consolidation
Act 1997) imposes a requirement to report to the Revenue Commissioners all payments
of interest which were made without deduction of withholding tax. This requirement
applies in the case of every person carrying on a trade in the course of which interest
amounting to £50 or more per annum is paid (£70 in the period 1968 to 1982). It did not
apply where the owner of the interest made a declaration of non-residence to the person
paying the interest.

This requirement was primarily aimed at bona fide banks which were permitted to pay
interest gross. It has been concluded above that Ansbacher had an obligation to withhold
tax when paying interest. Consequently these reporting obligations would not apply to it.
5.12 Deposit Interest Retention Tax (DIRT)
The Finance Act 1986 introduced DIRT with effect from 6 April 1986. The two major
effects of this were:

1. It removed the exemption from withholding tax on interest paid by banks.

2. It removed the requirement for banks to report interest payments to the Revenue
as such interest was not longer paid gross.

The obligation to withhold DIRT and account for it to the Revenue Commissioners rests
only with 'relevant deposit takers'. These were defined in Section 31 of the Finance Act
1986 as follows:

'(a) a person who is a holder of a licence granted under section 9 of the

Central Bank Act, 1971,
(b) a building society,
(c) a trustee savings bank within the meaning of the Trustee Savings Banks
Acts, 1863 to 1979,
(d) the Agricultural Credit Corporation, p. l. c.,
(e) the Industrial Credit Corporation, p. l. c., and the
(f) Post Office Savings Bank. '

As Ansbacher did not hold a licence under Section 9 of the Central Bank Act 1971
(although it ought to have done), and did not fall within any of the other categories of
'relevant deposit taker', the obligation to withhold DIRT would not have applied to it.
As a result of its failure to obtain a licence, it instead had the obligation to withhold tax
under Section 31 of the Finance Act 1974. It failed in this obligation.

5.13 Operation of PAYE

Employers are obliged to withhold income tax, pay related social insurance contributions
and levies etc on making payments of emoluments to employees (Section 126 Income
Tax Act 1967 - now Section 985 Taxes Consolidation Act 1997). These regulations
apply only when the relevant emoluments are assessable to income tax under Schedule E.
Broadly three conditions must be present before emoluments are assessable under
Schedule E:

1. There must be a contract of service ie the relationship between the parties must be
that of employer/employee
2. The contract of employment must be entered into in the State
3. The payment of the emoluments is made in the State

If the contract is not one of service but rather for services, the recipient is regarded as self
employed and subject to tax under Schedule D Case I or II. The 'employer' in such cases
has no obligation to withhold tax but the 'employee' is obliged to make his or her own
returns and pay any resultant tax liabilities.

If the contract is one of employment but is made outside the State it is regarded as a
foreign possession and assessable under Schedule D Case III even though the duties of
the employment may be performed in the State. Again the employer in such cases has no
obligation to withhold tax but the employee is obliged to make his or her own returns and
pay any resultant tax liabilities

As PAYE withholding arises at the point of payment, it does not apply where the pay
point is outside the State as Irish taxes cannot be imposed outside the jurisdiction of the
State.

The Inspectors have found that Ansbacher retained the services of three individuals and
made regular payments of remuneration to them. The individuals involved were Messrs
Desmond Traynor, Padraig Collery and Ms Joan Williams. Their duties are described
elsewhere in the report. The payments of remuneration were effected within the State by
crediting the memorandum accounts of the individuals in the Dublin books. The same
arrangements were continued by Hamilton Ross.
The Inspectors are satisfied that the relationship between Messrs Traynor, Collery and
Ms Williams on the one hand and Ansbacher and Hamilton Ross on the other was one of
employer/employee. In the view of the Inspectors, these arrangements constituted
employment contracts entered into in the State, the remuneration in respect of which was
paid in the State and consequently was assessable under Schedule E. PAYE was not
operated. The result is that the employer in each case was in default under the PAYE
regulations.

Having regard to the above, the Inspectors have concluded that there is evidence tending
to show that Ansbacher:

(a) Breached Section 5 of the Finance (Miscellaneous Provisions) Act 1968 by

failing to deliver to the Revenue Commissioners a statement in writing
containing the particulars therein set out;
(b) Breached Section 141 of the Corporation Tax Act 1976 by failing to deliver to
the Revenue Commissioners a statement in writing containing the particulars
therein set out;
(c) Breached Section 142 of the Corporation Tax Act 1976 by failing to deliver to
the Revenue Commissioners a Notice of Liability to Corporation Tax;
(d) Failed to pay Corporation Tax lawfully due;
(e) Breached Section 31 of the Finance Act 1974 in respect of the obligation to
deduct tax from interest payments; and
(f) Failed to make deductions from payments to employees (Mr Traynor, Ms
Williams and Mr Collery) contrary to Section 126 of the Income Tax Act 1967
(now Section 985 of the Taxes Consolidation Act 1997).

5.14 Breaches of Cayman law

Section 10(a) of the Cayman Islands Banks and Trust Companies Law (as amended)
provides as follows:
 'A licensee incorporated under the Companies Law (2001 Second
Revision) shall not, without the prior written approval of the Authority-

(a) open outside the Islands a subsidiary, branch, agency or

representative office; ...'

A provision in identical terms has been in force in the Cayman Islands since 1989. The
information available to the Inspectors indicates that had Ansbacher applied for such a
permission it would almost certainly have been granted. To do so however would have
run counter to its policy of secrecy and concealment in relation to its Irish business. It
did not apply for such permission and the absence of such permission, there is evidence
tending to show that it acted in breach of the laws of the Cayman Islands.
 PART III

RESPONSIBILITY FOR THE WRONGDOING OF ANSBACHER

(CAYMAN) LIMITED
 CHAPTER 6

RESPONSIBILITY - OFFICERS AND AGENTS

INDEX

Page

6.1 Introducti on 101

6.2 The officers of Ansbacher 102

6.3 Mr James Desmond Traynor (1971-1994) 102

6.4 Mr John Anthony Collins (1971-2000) 103

6.5 Mr John Andrew Furze (1971-1995) 103

6.6 Mr Hugh Cecil Hart (1980 to February 2002) 103

6.7 The agents of Ansbacher 104

6.8 Mr Padraig Collery 104

6.9 Ms Joan Williams 104

6.10 Particular responsibility of certain individuals 105

CHAPTER 6

RESPONSIBILITY - OFFICERS AND AGENTS

6.1 Introduction
Up to this point in the report, the Inspectors have outlined the history of Ansbacher,
described the services it provided and considered the evidence tending to show that
certain wrongs were committed. The Order of 22 September 1999 appointing the
Inspectors required, at paragraph 2(b), that they investigate and report on the affairs of
the company, and in particular:

'to identify as far as possible all of the parties who were either officers (including
shadow directors) and agents of the Company, clients of the Company or who
otherwise assisted in the carrying out of the business at the relevant time;'

As described in Chapter 2, Ansbacher underwent a number of changes of ownership

during its lifetime. It was originally a wholly owned subsidiary of Guinness and
Mahon, and was sold in 1984 to another member of the Guinness Mahon Group,
Guinness Mahon Overseas Investments Limited. Following a brief period during which
it was owned by Mr Traynor and his colleagues, it was purchased by the Henry
Ansbacher Group and the company's name was changed again to Ansbacher Limited. It
was later acquired by the First National Bank of Southern Africa, and became known as
Ansbacher (Cayman) Limited. In 1998, the company became a subsidiary of First Rand
Limited through that group's acquisition of First National Bank of Southern Africa
Limited. In this Part of the Report, the Inspectors identify the officers and agents of
Ansbacher, consider the responsibility of certain of them, consider the roles and
responsibilities of each of the owners of Ansbacher (with the exception of FirstRand, as
the Irish business of Ansbacher had ceased by 1998) and examine the extent to which
they may have to accept responsibility for its wrongdoing, if at all.

6.2 The officers of Ansbacher

Section 2(1) of the Companies Act, 1963 defines an officer as 'including a director or
secretary' Officers of a company are responsible for the company's actions. Clearly,
however, there are degrees of responsibility related to the roles played in the company.
A non-executive director cannot be said to be as knowledgeable about day-to-day
company activities as an executive director. A financial director will be expected to
have a much better understanding of the financial issues in a company than a director
involved in a non-financial role. A managing director or executive chairman, especially
if his or her role involves the strategic development of the company, will bear a
significant responsibility for the actions of a company. So it was with Ansbacher, where
individual directors played a greater or lesser part in its development and day-to-day
management.

A list of the directors and company secretaries of Ansbacher from its incorporation in
1971 as Guinness Mahon Cayman Trust Limited is set out in Appendix VI(a). Many of
the persons named on the list acted for varying periods of time, mostly short, as non-
executive directors. Some, such as Messrs Bryan Bothwell and Fraser Jennings who
acted as executive directors from the early 1990s, appear to have played little if any part
in the Irish business.

Those who did play an influential role in the Irish business of Ansbacher, or a significant
role over a lengthy period in the life of the company, were:

6.3 Mr James Desmond Traynor (1971- 1994)

Mr. Traynor was one of the founders of GMCT, together with John Collins and the late
John Furze. For many years until his death, he was the Chairman of GMCT and
Ansbacher, and, although described as a non-executive director, carried out executive
functions in Ireland, where he was its principal representative.
6.4 Mr John Anthony Collins (1971 - 2000)
Mr John Collins was an employee of the Bank of Nova Scotia, which administered
GMCT from 1971 to 1973. He was appointed a director of GMCT by his employer. He
left the Bank of Nova Scotia in 1973 to take up duties as an executive director of GMCT.
He was mainly responsible for the American and Jamaican clients of the company. He is
the only surviving member of the founding group of GMCT, and he gave evidence on
oath to the Inspectors. The transcript of Mr Collins's evidence is attached at Appendix
VI(b).

6.5 Mr John Andrew Furze (1971 - 1995)

Mr John Furze was also formerly employed by the Bank of Nova Scotia, and was
appointed a director of GMCT at the same time as Mr Collins. He too left the Bank of
Nova Scotia in 1973 to become an executive director of GMCT. He, together with Mr
Traynor, was responsible for the management of the affairs of the Irish clients of the
company.

6.6 Mr Hugh Cecil Hart (1980 to February 2002)

Mr Hugh Hart was a practising lawyer based in Jamaica who appears to have generated
business for GMCT within the Caribbean from early in the life of the company. In 1980,
he became a non-executive director, which role he retains to the present day. In 1988, he
was the prime negotiator on behalf of the management team in the acquisition of the
company from the Guinness Mahon Group. Along with the management team of Messrs
Traynor, Collins and Furze, he personally took up a share in the equity at that time. Mr
Harte appears to have been a very important source of business for the Company,
particularly business from the US and the Caribbean. There is no evidence, however, to
indicate that he had any significant connection with the Irish business of
GMCT/Ansbacher.
6.7 The agents of Ansbacher
An agent is a person who has authority to carry out acts affecting the legal position of
another person, termed the principal. When an agent acts on behalf of his principal, the
law treats the act as being that of the principal himself, and renders the principal liable for
it. In the opinion of the Inspectors, the following persons were agents of Ansbacher:

6.8 Mr Padraig Collery

Mr Padraig Collery assisted Mr Traynor in the operation of Ansbacher's Irish business.
He has had a lengthy career in banking, commencing with his first employment in Lloyds
Bank in London in 1968. From 1974 to 1989, he was a senior official in Guinness and
Mahon with responsibility for accounts and computer operations. In 1976, he succeeded
Mr Ru Leonard in the maintenance of the so-called 'memorandum accounts'. When Mr
Traynor left Guinness and Mahon in 1986, Mr Collery continued to operate the
memorandum accounts. An internal audit report on Guinness and Mahon commissioned
by its parent Guinness Mahon London in 1989 states, referring to Mr Collery:

'In practice (but not officially) therefore, DPC acts as a Dublin-based agent of
Ansbacher Limited insofar as the management of Customer and Ansbacher
Deposits is concerned...'

Following Mr Traynor's death in 1994, Mr Collery effectively replaced him as

Ansbacher's representative in Ireland. He took on this task at the specific request of Mr
Furze. This task continued with the management of the memorandum accounts in respect
of clients of Hamilton Ross up to the late 1990s.

6.9 Ms Joan Williams

Ms Joan Williams was Mr Traynor's personal secretary from 1972 until his death, and
she worked very closely with him both in Guinness and Mahon and in CRH. Ms
Williams acted as signatory on bank accounts used in the Ansbacher process, such as the
Kentford Securities account. Ms Williams's working relationship with Mr Traynor, on
whose instructions she acted, gave her a good view of the nature of the Irish business.
After Mr Traynor's death, Ms Williams facilitated the transfer of the Ansbacher and
Hamilton Ross business to the control of Mr Collery.

6.10 Particular responsibility of certain individuals

The Inspectors have concluded that the late Mr Traynor, the late Mr Furze and Mr Collins
have a particular responsibility to bear in respect of the wrongdoing of Ansbacher. The
Inspectors' reasons for so concluding are set out in the following chapters of this Part of
the Report.
 CHAPTER 7

RESPONSIBILITY OF MR DESMOND TRAYNOR

INDEX
Page
7.1 Introduction 108

7.2 Mr Traynor's role in Guinness and Mahon 108

7.3 Mr Traynor as a director of Guinness Mahon London 109

7.4 Mr Traynor's role in GMCT 110

7.5 Mr Traynor's role after his resignation from Guinness and Mahon 111

7.6 Mr Traynor's Ansbacher role at 42 Fitzwilliam Square 112

7.7 Mr Traynor's role in GMCT while employed by Guinness and Mahon 113

7.8 Mr Traynor's role in Hamilton Ross 113

7.9 Poinciana and Worldwide Management 114

7.10 Amiens Securities Limited, Amiens Investments Limited and

Kentford Securities Limited 114

7.11 Total control exercised by Mr Traynor 114

7.12 Mr Traynor as part-owner of Ansbacher 115

7.13 Additional matters 115

7.14 Mr Traynor and the Central Bank of Ireland 115

7.15 Assessment of Mr Traynor's responsibility for the wrongdoing of

Ansbacher and Hamilton Ross 117

7.16 Operation of trusts 117

7.17 Unlicensed banking 117

7.18 Breaches of Companies Acts 117

7.19 Conspiracy to defraud 118

7.20 Use of subordinates 118

7.21 Making of payments without deduction of tax 118

7.22 Corporation tax 118

7.23 Possible criminal offences 118

CHAPTER 7

RESPONSIBILITY OF MR DESMOND TRAYNOR

7.1 Introduction
In view of the criticisms of Mr Traynor set out hereunder, it is appropriate that the
Inspectors record the high esteem in which those who dealt with him held Mr Traynor.
Almost without exception his personal qualities were emphasised by those with whom he
came into contact. The Inspectors have discovered no case where any of the persons who
entrusted money to him were themselves treated by him other than fairly. He was a man
of immense energy who was very well organised in his business affairs.

7.2 Mr Traynor's role in Guinness and Mahon

In order to set out fully the impact made by Mr Traynor on the Company under
investigation, it is necessary to understand the role he played in the Guinness Mahon
Group on a company-by-company basis.

It is of some significance that Mr Traynor joined Guinness and Mahon in 1969, as this
was a time of great change and development within the Guinness Mahon Group's Irish
operation. From the time he joined the bank, he was one of the most important
executives in the organisation. In documentation dated 1971, he is described as
Managing Director, but this must be considered in the context that, at that time, this title
was given simultaneously to up to four officers of the bank. There appeared to be a
pecking order among those holding these apparently equal titles, and Mr Traynor's place
was clearly near the top of that order. The precise range of Mr Traynor's activities and
responsibilities in these early years are now unclear but as noted below he played a
central role in organising the expanded functions of Ansbacher (under its original name
of GMCT).
Mr Traynor was the executive in Guinness and Mahon who controlled the relationship
between GMCT and Dublin to the virtual exclusion of all others. This was surprising at
least in the early years, as the suggestion for the establishment of GMCT seems to have
originated from Mr John Guinness, the Executive Chairman.

The influence and power of Mr Traynor within Guinness and Mahon grew quickly. Part
of the reason must have been the increasing importance of GMCT to the financial well
being of Guinness and Mahon. Cash injected by GMCT increased between 1973 and
1983 from £3 million to £30 million in respect of deposits in Guinness and Mahon and
from £2 million to £90 million in respect of Guinness Mahon London. This put Mr
Traynor in a very strong position within the Guinness Mahon hierarchy. From the other
evidence received by the Inspectors, it is also likely that Mr Traynor's increasing status
reflected his ability and dedication.

Up to May 1976, Guinness and Mahon was managed by a conclave of four managing
directors. On the 10 May 1976, Mr Forwood resigned and the executive authority was
redefined. Mr John Guinness remained as Chairman but now in a non-executive
capacity. Mr Traynor became deputy Chairman and Chief Executive. Mr Maurice
O'Kelly retained the title of Managing Director. This was the culmination of a process
within Guinness and Mahon by which Mr Traynor's dominance grew. From that time,
the running of Guinness and Mahon was primarily in the hands of Mr Traynor. From
May 1976 to May 1986, there was only one executive whose views mattered within
Guinness and Mahon - Mr Desmond Traynor. During this period, the deposits of GMCT
in Dublin grew from £3 million to £39 million.

7.3 Mr Traynor as a director of Guinness Mahon London

Guinness Mahon & Company Limited, the London based principal operating entity in the
Guinness Mahon group of companies, was the owner of Guinness and Mahon and
assumed sole control of GMCT within the group after 1984, even though the shares in
GMCT were nominally owned by one of Guinness Mahon's other subsidiaries. Mr
Traynor was appointed a director of Guinness Mahon London in 1971. He remained a
director of the main board for as long as he was a director and an employee in Ireland.
He severed the connection in 1986 in circumstances which reflected profound
disagreements between himself and Mr Bruce Ursell, the managing director of the
London bank.

By reason of his membership of both Guinness and Mahon in Dublin and Guinness
Mahon London, Mr Traynor was at all times from 1971 up to his departure in May 1986
on the Board of directors of the controlling entity of GMCT.

7.4 Mr Traynor's role in GMCT

As described above, Mr Traynor was appointed a director of GMCT upon its
incorporation. He was described for many years as the chairman of the company and was
still on the board of directors of Ansbacher (as it had by then become) at the date of his
death, 11 May 1994. Ansbacher has informed the Inspectors that Mr Traynor was not a
director from 1974 to 1981. There is some evidence that the Central Bank was informed
of the intention of GMCT to protect itself against potential Irish tax complications by not
having Irish officers. The Inspectors have concluded that any such formal decision was
cosmetic only and that Mr Traynor should be considered a director or shadow director of
Ansbacher/GMCT from the date of its incorporation to the date of his death.

As a director, Mr Traynor was involved in and responsible for the strategic decisions of
the company. He had also a further responsibility as an executive of the company in
relation to its Irish business. In the absence of information from Mr Traynor himself, the
Inspectors could have been seriously disadvantaged in separating that portion of his work
relating to his role as an executive of GMCT from his work as an executive of Guinness
and Mahon. The potential confusion arises from the fact that actions taken by Mr Traynor
in the period up to 1986 (when he retired as an executive of Guinness and Mahon)
relating to GMCT business could have been take either in his capacity as an executive of
Guinness and Mahon or in his capacity as an executive of GMCT or as a combination of
both. The Inspectors have deemed it necessary to consider this matter in some depth so
as to properly assess the role of GMCT in Ireland and Mr Traynor's part in it during that
period.

That the executive work of Mr Traynor while employed by Guinness and Mahon
included an element of work on behalf of GMCT is clear from a proposal made to Mr
Traynor by Mr Bruce Ursell at the time of Mr Traynor's retirement from GMI. In a
memo dated 17 October 1985, Mr Ursell discusses the proposed arrangements for Mr
Traynor's departure as follows:

'Further to our conversation last week, I confirm that we would be very pleased
for you to continue in the role of Chairman of Guinness Mahon Cayman Trust for
a period of at least three years from the end of your employment at Guinness and
Mahon. We would be agreeable to you moving into the office previously occupied
by Don O'Connor and having a computer terminal wired up to tap into the
Cayman Bureau.'

In the present context, this extract shows that the chief executive of the parent company
acknowledged that there would be continuing executive work for Mr Traynor on his
resignation. This demonstrates that the executive tasks previously performed by Mr
Traynor were partly done as an executive of GMCT. What remains is an assessment of
the extent of the GMCT work. The Inspectors have concluded that the extent of the
intermingling of Guinness and Mahon and GMCT work by Mr Traynor can best be
assessed by considering what executive work continued to be performed by Mr Traynor
after his resignation from Guinness and Mahon.

7.5 Mr Traynor's role after his resignation from Guinness and Mahon
Immediately after his resignation in 1986, Mr Traynor commenced operating as arranged
from a Guinness and Mahon premises in Trinity Street, Dublin. This office was
immediately adjacent to the Guinness and Mahon headquarters. In the year during
which Mr Traynor was at this address, there was no identifiable change in the way
GMCT business was conducted. The computer access to Guinness and Mahon records
that had earlier been offered to Mr Traynor was apparently put in place. It appears that in
respect of the transaction of GMCT business, the office at Trinity Street was treated as an
integral part of Guinness and Mahon.

7.6 Mr Traynor's Ansbacher role at 42 Fitzwilliam Square

In May 1987, Mr Traynor was appointed chairman of CRH plc and commenced operating
firstly from 19 Pembroke Street and later from 42 Fitzwilliam Square Dublin. From that
time, a gradual change took place in his relationship with Guinness and Mahon. The
internal memo format of issuing instructions gave way to a more formal communication
pattern. Two examples of the mixing of the formal with the informal can be seen in two
documents, a note to the Securities Department of Guinness and Mahon dated 7 October
1987 and a more informal instruction to Mr P O'Dwyer in Guinness and Mahon dated 3
August 1988 (see Appendix VII(a) and Appendix VII(b)).

Mr Traynor transferred to 42 Fitzwilliam Square when CRH moved there in 1989. From
this address, Mr Traynor conducted business on a significant scale on behalf of
Ansbacher under its various names. The movement of money between accounts, the
lodgement of funds, the organisation of payments to Ansbacher clients, the arrangement
of back-to-back loans and other banking services, were all carried out by Mr Traynor
from this address to the date of his death. The documents available to the Inspectors
originating from or addressed to Fitzwilliam Square number many thousands. More than
two thousand are executive instructions of one kind or another. The Inspectors obtained
most of these documents from Guinness and Mahon and IIB. Other documents were
obtained from Bank of Ireland and from NCB Stockbrokers. Communications from the
Irish offices of Ansbacher to other parties were destroyed or removed by Mr John Furze
of Ansbacher after the death of Mr Traynor.

An examination of these facts and of the available documents has led the Inspectors to
conclude that all executive activity carried out in Ireland on behalf of Ansbacher from
1986 until the date of Mr Traynor's death, was carried out under his direction and
control.
7.7 Mr Traynor's role in GMCT while employed by Guinness and Mahon
The Inspectors have further concluded that Mr Traynor's control of Ansbacher's Irish
operation after he left Guinness and Mahon merely reflected similar activity conducted
by him while also an executive in Guinness and Mahon (though it had become more
complicated as ownership and control of the company was transferred elsewhere). This
conclusion is entirely consistent with the memo from the London managing director
quoted above on the occasion of Mr Traynor's departure from Guinness and Mahon. The
facts found are also supported by the absence of any instructions from Cayman or any
outside source for the majority of GMCT transactions while Mr Traynor was in Guinness
and Mahon. This leads to the conclusion that Mr Traynor, in originating the action
within Guinness and Mahon, was doing so in a dual capacity as an executive of GMCT
and Guinness and Mahon.

7.8 Mr Traynor's role in Hamilton Ross

In addition to the companies within the Guinness Mahon Group, Mr Traynor also had a
relationship with other entities used in the offshore scheme. As will be considered in
greater detail further on in this Report, Hamilton Ross Company Limited played in later
years an increasing role in Ansbacher's Irish business. Prior to the late 1980s, it had no
part to play. From 1988 onwards, GMCT/Ansbacher used it as a convenience for
recording, in the company's books in Cayman, a portion of the sterling pooled accounts.
Up to September 1992, the Hamilton Ross name was not used in Ireland. Ansbacher's
name was used exclusively in Ireland as the depositor of the Cayman funds. At this time,
Hamilton Ross was probably owned by Mr Traynor but was managed and controlled by
Ansbacher. Any fees earned by Hamilton Ross were credited to the Ansbacher profit and
loss account. Those customers in Ireland who used the facility were probably unaware
that their Cayman funds were held in the name of Hamilton Ross.

After September 1992, the status of Hamilton Ross changed. As related in Chapter 2, in
1992, all Hamilton Ross accounts were taken off Ansbacher's books at the direction of
London management. At the same time, Mr Traynor gave instructions to IIB to close
certain accounts that had been held in that bank in the name of Ansbacher, and to transfer
the funds to new accounts in the name of Hamilton Ross. In Chapter 24, the Inspectors
conclude that there is evidence tending to show that, from September 1992 to early 1997,
Hamilton Ross was engaged in banking in Ireland without a licence, and in other illegal
activities as successor to Ansbacher's Irish business. Mr Desmond Traynor was
responsible for that activity as the prime mover in its implementation. Indeed, the control
exercised by him over Hamilton Ross was such that he was at all material times after
September 1992 a shadow director of Hamilton Ross.

7.9 Poinciana and Worldwide Management

Two entities carried the Poinciana name, Poinciana Fund and Poinciana Fund Limited.
These entities, together with Worldwide Management and Consultancy Services Ltd
formed the assets of a trust called Poinciana Trust, which was established by Mr Traynor
in 1993. Poinciana Fund Ltd had been used much earlier as an Ansbacher vehicle in its
Cayman Island books in the same way as Hamilton Ross was later used.

The Poinciana entities were beneficially owned by Mr Traynor. They still exist and now
appear to be awaiting trustee action to distribute the funds held for the named
beneficiaries, members of the Traynor family

7.10 Amiens Securities Limited, Amiens Investments Limited and Kentford

Securities Limited
The Amiens companies, and the use made of them by Mr Traynor have been described in
Chapter 2. Kentford Securities Limited was a company whose Bank of Ireland account
was used as a vehicle to cash cheques issued by IIB to clients of Ansbacher, as IIB did
not have a cash facility. These entities were part of the unlicensed banking operation and
Mr Traynor controlled each of these companies.

7.11 Total control exercised by Mr Traynor

In summary, the Inspectors are satisfied that Mr Traynor acted as the Dublin executive of
GMCT while in the employment of Guinness and Mahon in addition to his Guinness and
Mahon executive responsibilities. From the date of his resignation from Guinness and
Mahon in 1986 until his death in 1994, he continued to be the executive presence of
GMCT/Ansbacher in Ireland, although located outside Guinness and Mahon. At no time
during Mr Traynor's lifetime was any other person in control of Ansbacher's Irish
business.

7.12 Mr Traynor as part-owner of Ansbacher

Mr Traynor was briefly part of the consortium that owned the company in 1988. Later
that year, the consortium disposed of 75% of the company to Henry Ansbacher Holdings
Plc, London. The consortium continued to own 25% of the company until it was bought
out in April 1993.

7.13 Additional matters

Before considering the responsibility of Mr Traynor as a director and executive of
Ansbacher, certain additional matters arise which relate to Mr Traynor himself. Over the
years, he made certain representations to others, which in the view of the Inspectors were
not correct. These representations, which are set out below, were made in his capacity as
a director of Guinness and Mahon.

7.14 Mr Traynor and the Central Bank of Ireland

In 1976, the Central Bank of Ireland expressed to Mr Traynor its concern that tax
avoidance was one of the main objects of GMCT. Mr Traynor denied this and said that
the Guinness and Mahon subsidiaries (including GMCT) were all deposit taking
institutions offering full banking services. Their main income, he said, derived from
executor and trustee business. In fact, the balance sheet of GMCT at 31 March 1972
shows that 80% of its funds were lent to companies in the Guinness Mahon Group and
only 20% lent to ordinary customers. This indicates the true nature of the operation at
this stage. GMCT was at that time a company whose function was twofold: firstly, to
collect offshore deposits for both Guinness and Mahon and Guinness Mahon London for
the purpose of assisting the liquidity of the Irish and UK operations, and secondly, to
provide a tax haven for the funds of Irish residents.
A minute of a meeting between Mr Traynor and the Central Bank on 8 February 1977
contains the following statement:

'Tax Havens.
Mr Traynor outlined in some detail the operations of the bank's subsidiary
companies in Cayman Island. Guernsey and Jersey. He stressed that they were
basically trust companies but that a proportion of the assets being managed were
deposited with the trust companies themselves. The three companies themselves
have banking status. He also emphasised that the funds were not placed on
deposit for the purpose of tax avoidance or evasion.'

Customers' deposits at this stage had reached £19 million and the tax evasion scheme
was well in place. In fact, as is clear from a 1978 report, by that time the Central Bank
was aware that documentation relating to the Cayman business was kept offshore as a
precaution against a physical inspection of the bank's affairs by the Revenue
Commissioners.

Mr Traynor assured the Central Bank on a number of occasions during the 1970s and
1980s that no funds had been transferred from Ireland to the Cayman Islands since 1972
(see Appendix VII(c)). This may have been literally true, but in fact funds were sent
from Ireland to College Trustees Ltd, a Guinness Mahon trust vehicle in Guernsey, which
in turn transferred these funds to Cayman. However, in fairness to Mr Traynor, he had
explained this to the Central Bank in 1979 as follows:

'Another Guinness Mahon company, Guinness Mahon Guernsey Limited, are the
trustees of hundreds of discretionary trusts, owning companies with registered
offices in the Cayman Islands. Deposits from Irish residents were placed in the
name of one of these trusts which onlends to one of these companies and the funds
are in turn deposited with the Cayman bank. The Cayman bank redeposits these
 funds with the Dublin bank which may give an advance to a customer (original
depositor) secured by these funds.' (see Appendix VII(d)).

7.15 Assessment of Mr Traynor's responsibility for the wrongdoing of Ansbacher

and Hamilton Ross
In Chapters 5 and 24, the Inspectors have examined the evidence tending to show
wrongdoing on the part of Ansbacher and of Hamilton Ross. They now assess the extent
of Mr Traynor's responsibility for any such wrongdoing

7.16 Operation of trusts

As described in Chapter 3, trusts were established by Irish clients - in many cases
legitimately - in the Cayman Islands. They were, however, operated by the beneficial
owners in a manner that rendered them sham operations. The Inspectors conclude that
there is evidence tending to show that Mr Traynor facilitated this abuse of the trusts in
that he accepted instructions from beneficial owners in Ireland and implemented these
instructions without proper authorisation from the trustees

7.17 Unlicensed banking

Again it can be seen in Chapter 3 that Ansbacher operated a deposit taking service in
Ireland from the 1970s to 1994. After 1992, Hamilton Ross was also used for this
purpose. Money belonging to depositors was accepted and credited to Ansbacher and
Hamilton Ross accounts in Guinness and Mahon, IIB and to a lesser extent, Bank of
Ireland Private Banking. There is evidence tending to show that Mr Traynor thereby
facilitated the carrying on of a banking business by Ansbacher and Hamilton Ross in
Ireland without a banking licence.

7.18 Breaches of Companies Acts

The Inspectors have also concluded that there is evidence tending to show that Mr
Traynor, while an executive director of Ansbacher and Hamilton Ross, knowingly and
wilfully permitted Ansbacher, while it was carrying on business in Ireland, to fail to
furnish to the Registrar of companies the information required by sections 352, 353, 355
and 357 of Part XI of the Companies Act, 1963.

7.19 Conspiracy to defraud

The Inspectors have concluded that there is evidence tending to show that Ansbacher and
Hamilton Ross conducted their business in Ireland in such a manner as to intentionally
defraud the Revenue authorities. As executive director of Ansbacher and Hamilton Ross
in Ireland, Mr Traynor was fully aware of the activities in question. There is therefore
evidence tending to show that Mr Traynor was the instrument by which Ansbacher and
Hamilton Ross committed these acts.

7.20 Use of subordinates

In his role as executive director of the operations of Ansbacher and Hamilton Ross in
Ireland, there is evidence tending to show that Mr Traynor improperly used subordinates
such as Mr Padraig Collery and Ms Joan Williams in the unlawful activities of that
business.

7.21 Making of payments without deduction of tax

There is evidence tending to show that Mr Traynor approved of and participated in the
making of payments to Mr Padraig Collery and Ms Joan Williams without deduction of
appropriate tax.

7.22 Corporation Tax

Ansbacher and Hamilton Ross, while trading in Ireland, were potentially liable for Irish
Corporation Tax. There is evidence tending to show that Mr Traynor through his actions
facilitated the evasion by each of these companies of its tax responsibilities.

7.23 Possible criminal offences.

The Inspectors are of the view that many of the actions of Mr Traynor as set out above
may constitute evidence tending to show the commission of criminal offences. Because
Mr Traynor is no longer alive, the Inspectors did not further consider this matter. It is,
however, possible that Mr Traynor's actions, taken together with those of others, would
constitute evidence of conspiracy offences for which those third parties would still have a
responsibility. It is also possible that the actions of Mr Traynor would constitute
evidence of criminal acts of corporate bodies of which he was a principal. In this context,
the Inspectors have been asked by Mr Traynor's family to point out that, in the family's
view, his actions were taken in the context of his implementation of Guinness and Mahon
policy, and not otherwise.
 CHAPTER 8

RESPONSIBILITY OF MR JOHN FURZE

INDEX

Page
8.1 Introduction 122

8.2 Mr Furze as director of GMCT 122

8.3 Mr Furze in charge of Irish clients 122

8.4 Policy of concealment 123

8.5 Visits to Ireland 123

8.6 Part-ownership of GMCT 124

8.7 The Pruna affair 124

8.8 Hamilton Ross 125

8.9 Buy-out of Mr Furze's minority shareholding 126

8.10 Death of Mr Traynor and destruction of GMCT files 127

8.11 Role of Mr Furze after Mr Traynor's death 127

 Page

8.12 Assessment of Mr Furze's responsibility for the wrongdoing of Ansbacher 127

8.13 Conspiracy to defraud 128

8.14 Unlicensed banking 128

8.15 Breaches of Companies Acts 128

8.16 Breach of Cayman law 128

RESPONSIBILITY OF MR JOHN FURZE

8.1 Introduction
Together with John Collins and the late Desmond Traynor, the late Mr John Furze was
one of the first directors of GMCT, and was to become the individual most closely
involved with Mr Traynor in the running of Ansbacher's Irish business. He was also a
director of Hamilton Ross Company Limited, and of Poinciana Fund Limited. He first
went to the Cayman Islands in 1967 or 1968 to assist Mr Collins in the new branch of the
Bank of Nova Scotia, which had just opened there. He left again for a brief period, but
returned about 1970, and remained there until his death in 1997. He was regarded as one
of the pioneers in the evolution of the Islands as an offshore financial centre. During his
time in Cayman, he was active in both civil and community affairs, and was a leading
member of the Rotary Club. According to officials of Ansbacher, a leading Caymanian
politician described Mr Furze after his death as being 'among the best of persons who
emigrated to the Cayman Islands'. He has been described to the Inspectors by those
who met him as a bluff and jovial person, who, when he visited Mr Traynor in Guinness
and Mahon or CRH, was in the habit of giving little gifts to members of staff who
provided him with assistance.

8.2 Mr Furze as director of GMCT

As related in Chapter 2, when Guinness and Mahon established GMCT as a trust
company in January 1971, its administration was carried out at first by the Cayman
branch of the Bank of Nova Scotia. The Bank nominated Mr Collins and Mr Furze as
directors. When in 1973, GMCT obtained its own premises in Cayman, Mr Collins and
Mr Furze left the Bank of Nova Scotia to become full time employees of GMCT.

8.3 Mr Furze in charge of Irish clients

Although, in Ansbacher's own words in the information document provided by them to
the Inspectors (see Appendix II(c)) 'GMCT was, in essence, run as a quasi partnership',
the informal division of responsibilities between the two men meant that, while Mr
Collins looked after the North American and Caribbean business, Mr Furze was mainly
responsible for administration and in effect acted as the account manager for Irish clients
- in particular, those introduced by Mr Traynor. Whenever Mr Traynor had occasion to
communicate with GMCT about its Irish business, he almost invariably contacted Mr
Furze.

8.4 Policy of concealment

From an early date, Mr Furze was active in promoting the policy of concealment by
means of which, as described in Chapter 3, GMCT conducted its business with intent to
defraud creditors of some of its clients. The bureau system on which the memorandum
accounts were maintained by Mr Collery in Guinness and Mahon was originally set up at
the request of Mr Furze. He makes the request in a letter to Guinness and Mahon in
February 1978, and goes on to say:

'Needless to say, we will also require your written assurance that neither
the programme information stored nor the accounting records themselves,
are made available to any third parties such as auditors, bank inspectors,
etc.'

8.5 Visits to Ireland

Mr Furze visited Ireland annually. On those occasions, he would 'set up shop' in one of
the conference rooms in Guinness and Mahon. During this time, it was his habit to send
out statements to Irish clients. Mr Traynor's secretary, Ms Williams, would type the
covering letters for him. Mr Furze also made use of the CRH premises when he came to
visit Ireland. He used the offices for the purpose of preparing reconciliation statements
between the records held in Cayman and the records held in Dublin. It appears that he
also met there some clients who were known to him.
8.6 Part-ownership of GMCT
As related elsewhere, Mr Furze, together with Messrs Traynor and Collins and Mr Hart
formed a consortium in June 1988 for the purpose of purchasing GMCT. In August of the
same year, four companies representing the four men sold 75% of their shareholding in
GMCT to Henry Ansbacher Holdings plc.

8.7 The Pruna affair

Although the division of responsibilities between Mr Collins and Mr Furze meant that Mr
Collins looked after American business, for some reason that remains unexplained, Mr
Furze had a number of American clients, who were in the main members of a family
called Pruna, or associates of that family. Mr Furze's involvement in the affair of the
Pruna loans is one of the most bizarre matters in the whole Ansbacher saga. The Pruna
family members and their associates were residents of the United States. During the
relevant period, some of them were under investigation for drug-related offences in the
US. Two members of the family, Fernando and Eudelia Pruna, who were clients of
Ansbacher, had loans from Guinness and Mahon backed by their Cayman funds.

Guinness and Mahon furnished the Inspectors with copies of correspondence consisting
of letters written on Guinness and Mahon notepaper, but bearing an illegible signature,
from which it appeared that Guinness and Mahon had made a loan to two other members
of the Pruna family, Andreas Pruna and his wife Maria Isobel, secured on a property in
Miami Beach, Florida. In November 1985, Mr Andreas Pruna wrote to Guinness and
Mahon saying that he would be unable to make the first interest payments and that he had
doubts about his ability to repay the principal sum. He offered to transfer the deeds of the
property in Miami Beach to Guinness and Mahon in lieu of foreclosure. By further letter
on Guinness and Mahon notepaper, Guinness and Mahon appeared to accept the offer,
and to arrange for the property to be registered in the name of Mars Nominees, their
nominee company. This registration in fact took place. Steps were later taken to convey
the property by warranty deed to Ms Maria Isobel Pruna, the wife of Andreas.
The Inspectors have received evidence from Guinness and Mahon to the effect that no
bank documentation relating to the alleged loan exists, that Guinness and Mahon believes
that the loan was a fiction, and that GMCT falsely used Guinness and Mahon's notepaper
to create the alleged correspondence between Guinness and Mahon and Mr Andreas
Pruna.

In 1988, Mr Furze wrote to Mr Traynor to inform him that the Prunas were under
investigation in the US for alleged drug-related offences. He explained that they were
clients of Cayman, and that Mars Nominees would be involved in the investigation
because the Miami Beach property had been registered in its name. Mr Furze alleged that
he had not known this. Subsequently, an arrest and forfeiture notice was served on
Guinness and Mahon and Mars Nominees

The Inspectors believe that on the balance of probabilities, Mr Furze not only knew of the
registration of the property in the name of Mars Nominees, but also was active in
bringing it about. It is not possible to say whether anyone in Guinness and Mahon was
complicit in the affair, but it is clear that Mr Furze could easily have obtained Guinness
and Mahon headed notepaper on his trips to Dublin, without the involvement of any other
person. The Inspectors have obtained evidence from Mr John Collins to the effect that,
although Mr Collins himself usually dealt with American clients, Mr Andreas Pruna was
a client solely of Mr Furze. The Inspectors are of the view that there is thus evidence
tending to show that Mr Furze, acting in his capacity as a director of GMCT, conspired
with Mr Andreas Pruna in an attempt to prevent, by fraudulent means, the forfeiture of
the Miami Beach property by the US authorities.

8.8 Hamilton Ross

As related in Chapter 24, in September 1992, the London management of Ansbacher
discovered the existence of the Hamilton Ross accounts. Mr Furze described Hamilton
Ross's business to Mr McAuliffe of the London office as being that of receiving deposits
in Ireland from clients, and then banking them in IIB 'on behalf of AL [Ansbacher
Limited] '1. Upon further investigation, it emerged that Mr Furze was the registered owner
of the majority shareholding and was also one of the directors. The company had no
reserves, and appeared to be used exclusively for the purpose of the collection and
onward transmission of deposits to Ansbacher.

Mr McAuliffe and his colleague, Mr Fraser Jennings, noted that Hamilton Ross did not
have a bank mandate for the operation of its accounts with Ansbacher. They were greatly
disturbed by their findings and, in a fax to the chief executive, Mr Fenhalls, indicated
their fears that the Hamilton Ross operation may have been in breach of the law in
Ireland. They stressed that urgent action needed to be taken to ensure the speedy
termination of the business.

Mr Fenhall's immediate reaction was to rid the company of both Mr Traynor and Mr
Furze, but, on receiving reassurance from Mr Traynor that the Hamilton Ross business
would be taken off Ansbacher's books with immediate effect, he and other members of
London management realised that the sudden departure of both directors might have had
a detrimental effect upon Ansbacher's standing with its clients and with the market.

8.9 Buy-out of Mr Furze's minority shareholding

However, this event, which had shaken the trust of London management in Mr Traynor
and Mr Furze, was a major factor in causing Ansbacher to seek an early buy-out of the
minority shareholding in the company held by Messrs Traynor, Collins, Furze and Hart.
In a draft internal memo of 16 September 1992, Mr Fenhalls sets out his thoughts on the
matter as follows:

'The role envisaged for Messrs Furze and Collins would be that of non-
executive deputy chairmen of the organisation (thus enabling them to
maintain their face on the Island) '.

1
See Appendix II(c)
8.10 Death of Mr Traynor and destruction of GMCT files
In May 1994, Mr Traynor died suddenly. His death threw the Ansbacher operation in
Ireland into disarray. Mr Furze came to Ireland to attend Mr Traynor's funeral, and while
in Ireland, he attempted to make some temporary arrangements about the running of the
business. He asked Mr Padraig Collery to act as a liaison person in Ireland until such time
as alternative arrangements were made. He also asked him to contact Ms Joan Williams
and to obtain possession of the Cayman files, which, of course, were at that time in Mr
Traynor's office on the premises of CRH at 42 Fitzwilliam Square. Mr Collery did so,
and removed the files to a premises owned by Mr Sam Field-Corbett at Winetavern
Street.

In October or November of the same year, Mr Furze paid another visit to Dublin. He
examined the files in Winetavern Street, and, under his instructions, some were
destroyed. Of the remainder, some stayed in Winetavern Street and some returned to
Cayman in Mr Furze's custody. It appears that Mr Furze and Mr Collery destroyed more
files in or around September 1995. The deliberate destruction of the files has been
a major impediment to the Inspectors in their investigation of Ansbacher's Irish business
and it is reasonable to conclude that it served to protect the identity of the Irish clients,
and to prevent knowledge of their offshore funds from coming to the attention of the Irish
Revenue Commissioners.

8.11 Role of Mr Furze after Mr Traynor's death

After Mr Traynor's death, Mr Furze took over responsibility for decisions on the Irish
accounts. If one of the Irish clients wished to withdraw some funds, Mr Collery would
ring Mr Furze to verify the matter. Again, it was Mr Furze who, after Mr Traynor's death,
organized the continuation of payments to Mr Collery for his work on behalf of Hamilton
Ross. Mr Furze resigned as a director of Ansbacher in April 1995. He died in 1997.

8.12 Assessment of Mr Furze's responsibility for the wrongdoing of Ansbacher

In summary, Mr Furze worked closely with Mr Traynor. From the beginning of his time
at Ansbacher, he was fully aware of the nature of its Irish business. As a director, he must
have consented to the opening and maintenance by Ansbacher of accounts in Guinness
and Mahon and in IIB, knowing them to contain funds beneficially owned by Irish
residents. He must also have consented to the use of the memorandum accounts by
Ansbacher's representatives in Ireland to keep secret the identity of Ansbacher's clients,
and to the making of lodgements to and withdrawals from the accounts in Ansbacher's
name in Guinness and Mahon and in IIB by Ansbacher's Irish clients. It was Mr Furze
who reconciled those accounts when Mr Collery sent them to Cayman on a monthly
basis. As one of the first directors, and particularly as the director with responsibility for
Irish clients, Mr Furze bears equal responsibility with Mr Traynor for any wrongdoing on
the part of the company.

8.13 Conspiracy to defraud

The Inspectors have concluded that the matters set out above constitute evidence tending
to show that Mr Furze conspired with his fellow-director Mr Traynor to conduct
Ansbacher's affairs with intent to defraud a creditor of some of its clients, namely, the
Irish Revenue Commissioners. This conclusion might, if Mr Furze were still alive, have
given rise to the possibility that he had committed certain criminal offences. However,
because Mr Furze is no longer alive, the Inspectors did not think it useful to consider this
matter further.

8.14 Unlicensed banking

The Inspectors have concluded in Chapter 5 that there is evidence tending to show that
Ansbacher carried on an unlicensed banking business in Ireland. They have also
considered the responsibility of Mr Furze for any such unlicensed banking business
carried on by Ansbacher and have concluded that there is evidence tending to show that
he consented to or approved of the carrying on of such business.

8.15 Breaches of Companies Acts

The Inspectors have also concluded that Mr Furze, while a director of Ansbacher,
knowingly and wilfully permitted Ansbacher, while it was carrying on business in
Ireland, to fail to furnish to the Registrar of companies the information required by
sections 352, 353, 355 and 357 of Part XI of the Companies Act, 1963.

8.16 Breach of Cayman law

Finally, the Inspectors have concluded that there is evidence tending to show that Mr
Furze failed in his duty under Cayman law to apply for the permission required by
Section 10(a) of the Cayman Islands Banks and Trust Companies Law of 1989 (as
amended) to open outside the Cayman Islands 'a subsidiary, branch, agency or
representative office' without the prior written permission of the relevant Cayman Islands
authority.
 CHAPTER 9

RESPONSIBILITY OF MR JOHN COLLINS

INDEX

Page
9.1 Introduction 131

9.2 Early contacts with Mr Traynor 131

9.3 Mr Collins as director of GMCT 132

9.4 Mr Collins as part-owner of GMCT 133

9.5 Loans from Guinness and Mahon to US clients 134

9.6 Hamilton Ross 134

9.7 Day-to-day running of GMCT 135

9.8 Assessment of responsibility of Mr Collins for the wrongdoing of

Ansbacher 136

9.9 Unlicensed banking 137

9.10 Breaches of the Companies Acts 137

9.11 Breach of Cayman law 137

RESPONSIBILITY OF MR JOHN COLLINS

9.1 Introduction
Mr John Collins is the sole surviving founding director of Ansbacher (Cayman) Limited.
He gave evidence on oath to the Inspectors in London in October 2001. Mr Collins's
career has always been in the trustee department of banks, beginning with his first
position as a seventeen year-old in the Luton UK branch of Barclay's Bank. In 1965, he
went to Jamaica as trust manager for the Montego Bay office of the Bank of Nova Scotia
Trust Company. In 1966, he was sent to open an office of that Bank in the Cayman
Islands. In 1967 or 1968, the head office of the Bank of Nova Scotia sent another official
to assist Mr Collins. This was Mr John Furze. Mr Furze assisted Mr Collins for a short
period, and then returned to Jamaica. However, at Mr Collins' request, he returned to
Cayman in the late 1960s or early 1970s to take up the position of assistant manager.

9.2 Early contacts with Mr Traynor

On a trip to Ireland in the late 1960s to visit a colleague who was there to expand Nova
Scotia's international business, Mr Collins was introduced to Mr Desmond Traynor, who
at that time was still working in Haughey Boland. Shortly afterwards, on another trip, Mr
Collins met him again, but this time in Guinness and Mahon, where he had been
appointed to the board of directors. Mr Collins was soon involved in Guinness and
Mahon's plans for expansion into the Cayman Islands. Guinness and Mahon had at that
time instructed the late Mr Liam McGonagle, solicitor, to arrange for the incorporation of
seven companies in the Caymans, of which four were to be tax-exempt companies. In
June of 1969, Mr Collins called to see two of the Guinness and Mahon directors, Mr John
Guinness and Sir George Mahon, to discuss the companies.
Around that time, Mr Collins tried to interest Guinness and Mahon in a deal to purchase
some land in Cayman. Guinness and Mahon agreed; a Cayman company, Northern
Finance Limited, was established to carry out the transaction, and in due course the land
was sold and a substantial profit made.

9.3 Mr Collins as director of GMCT

When Guinness and Mahon established GMCT as a trust company in January 1971, its
administration was carried out by the Bank of Nova Scotia Trust Company (Cayman)
Limited. The Bank nominated Mr Collins and Mr Furze as directors. For some years, the
company was effectively run by both of them, together with Mr Traynor who was of
course operating at all times in Ireland. In Ansbacher's own words:

'GMCT was, in essence, run as a quasi partnership. Of the 'partners', Mr

Traynor remained based in Dublin, although he would visit Cayman at least three
times a year for board meetings and to work with Mr Furze on issues such as the
reconciliation of the client accounts ... Mr Furze, conversely, visited Mr Traynor
once or twice a year in Dublin. The two executive directors, Messrs Furze and
Collins, worked in the offices of GMCT in Cayman. There was some formal
division of responsibilities between those two individuals but with considerable
'blurring' at the edges reflecting the partnership nature of the organisation.'

Ansbacher goes on to indicate what these formal divisions of responsibilities were:

'For example, Mr Furze was mainly responsible for administration and in effect
acted as the account manager for Irish clients, and in particular those introduced
by Mr Traynor, whereas local Cayman public relations and marketing were
mainly the responsibility of Mr Collins. Mr Collins never introduced or managed
any Irish business, although from time to time he did complete administrative
tasks on such accounts in the absence of Mr Furze.' (see at Appendix II(c)).
In May of 1971, Mr Collins visited Ireland, where Mr Traynor set up meetings with the
accountancy firm of Kennedy Crowley (now KPMG) who were interested in finding out
what services the new GMCT could offer to their clients. Mr Collins visited Dublin again
in the late summer of 1972, where he had talks with Mr Traynor about Cayman trusts.
When, in 1973, GMCT obtained its own premises in Cayman, Mr Collins and Mr Furze
left the Bank of Nova Scotia to become full time employees of GMCT. Mr Collins told
the Inspectors that, given his age, he saw this as possibly his last opportunity to take part
in an entrepreneurial venture and although it was a risk when compared with a safe career
in the Bank of Nova Scotia, he decided to seize the opportunity. He had by then spent
some years in Cayman and had built up contacts. As he explained, trust company
business is very personal, clients tend to stay with someone with whom they have built up
a relationship, and Mr Collins, in his own words, felt that he could 'make a go of it'.
Around that time too, the Cayman Islands were removed from the scheduled territories,
with the disincentive to Irish business that this implied, and Mr Collins and Mr Furze felt
they might be able to develop business for GMCT in North America and the Caribbean.

9.4 Mr Collins as part-owner of GMCT

When in 1988 Guinness Mahon & Company in London decided to sell GMCT, which
they had purchased from Guinness and Mahon some years before, it was purchased by a
consortium comprising Messrs Collins, Traynor and Furze and Mr Hugh Hart, a Cayman
lawyer who had become a director of GMCT. They used a vehicle called Chichester
Investments Limited to do so. Mr Collins told the Inspectors that the matter arose when
the Guinness Peat Group Ltd, the ultimate holding company, indicated its intention to
divest. GMCT was very keen to maintain its independence and to avoid being sold en
bloc with other Guinness Group companies. The negotiations on behalf of GMCT were
undertaken principally by Mr Hart, although Mr Collins himself was deeply involved.
The sale went through, but almost immediately, the consortium sold 75% of the
shareholding to the Henry Ansbacher Group. This transaction is dealt with in greater
detail elsewhere in this report. Mr Collins's explanation for this immediate abandonment
of independence is that having bought the company, the group of directors began to
worry that there was not perhaps a great future for a totally independent trust company
with no backing. They were willing to try, if backing was not forthcoming, but they felt
somewhat unhappy with the situation in a climate where business was not exactly
booming. They therefore approached several parties, including Credit Suisse, without
success, and finally approached Richard Fenhalls of Ansbacher, who they had known in
the days when he was chief executive of Guinness Mahon London. This led to the
purchase of GMCT by the Ansbacher Group.

9.5 Loans from Guinness and Mahon to US clients

From that time on, Mr Collins appears to have had very little involvement in the Irish
business of Ansbacher, devoting himself to the interests of the American clients.
Occasionally, however, American and Irish interests overlapped, as in the case of back-
to-back loans from Guinness and Mahon to the Enochs, clients of Mr Collins who,
though Irish, resided in the United States. The Enochs' case is dealt with in Chapter 23 of
this report. For present purposes, it is noteworthy that in a letter written to Guinness and
Mahon on 13 June 1990 to negotiate the terms of the loans, Mr Collins stated: 'Your
facility letter to Stephen Enoch will not mention the hypothecated deposits that are being
provided as security'. The omission from Guinness and Mahon facility letters of any
mention of a GMCT deposit securing a loan was part of GMCT's policy of concealment,
and the Inspectors have concluded in Chapter 5 that there is evidence tending to show
that it formed part of the method by which GMCT conducted its affairs with intent to
defraud creditors of some of its clients, whether they were the Irish Revenue
Commissioners or the Revenue authorities of other countries.

Mr Collins remained an executive director of GMCT until May 1995, and continued as a
non-executive director until his retirement in October 2000.

9.6 Hamilton Ross

A later section of this Report deals in some detail with the discovery by Ansbacher's
London management in 1992 of the Hamilton Ross accounts, and the ensuing attempts by
management to have that part of the Irish business closed down. Mr Collins appears to
have been involved only in a peripheral way in those events. As a member of the board,
he was of course aware that they were taking place, but, as he himself told the
Inspectors, 'By that time, Fraser had come in and when this was going on, I think I was
one of the excluded parties'.

Mr Collins told the Inspectors that for the first couple of years, although both he and Mr
Furze held the title of joint managing director, he, as the elder by some seven or eight
years was primus inter pares. After that time, he said, they were equals, reporting
regularly to Mr Traynor back in Dublin. As time went on, Mr Collins did more of the
North American and Caribbean business, while Mr Furze worked more closely with Mr
Traynor on the Irish business.

9.7 Day-to-day running of GMCT

Mr Collins told the Inspectors that board meetings were held about once every three
months in the early days. These were attended by Mr Traynor and a representative from
Guinness Mahon London. However, all day-to-day management decisions were made by
Mr Collins and Mr Furze, who effectively ran the little company between them. As Mr
Collins said, they were in daily contact and their office doors were wide open.
Notwithstanding the greater involvement of Mr Furze, Mr Collins was not totally
uninvolved in the Irish business of the new company. It was he who conducted the initial
discussions on trusts with Kennedy Crowley and Guinness and Mahon and who obtained
as a result some Irish trust business. He also visited solicitors' firms on these marketing
trips. Even when he was not actively involved in a particular aspect of the Irish business,
Mr Collins would have had a general awareness of what it was: as he told the Inspectors,

'Fraser' was Mr Fraser Jennings of Ansbacher's London office. In 1989 the Ansbacher group
purchased another Cayman company, CITCO. Ansbacher then set about merging its two Cayman
companies. The proposed merger apparently met with some resistance, particularly from Mr Furze. This
difficulty, together with a growing realisation of the autonomy enjoyed by Mr Traynor in his conduct of the
Irish business of Ansbacher, prompted the Chief Executive, Mr Richard Fenhalls, to second Mr Jennings
and Mr Kevin McAuliffe to Cayman in early 1992. As part of his secondment, Mr Jennings was made a
managing director of Ansbacher.
 '.it isn't a question that there is a wall there that I cannot know what is going on
over there and [John Furze] can't know what is going on over here, that didn't
happen.'

9.8 Assessment of responsibility of Mr Collins for the wrongdoing of Ansbacher

The Inspectors, while acknowledging that there was a formal division of responsibilities
among the members of the board, point out that in such a small company the three early
directors must take equal responsibility for the management decisions that were made at
that time - in particular, for the opening and maintenance of the non-resident accounts in
GMCT's name in Guinness and Mahon. These accounts, as seen in Chapter 3, contained
the funds of Irish GMCT depositors, which funds were lodged in those accounts by
GMCT itself. The Inspectors have concluded in Chapter 5 that these accounts were
opened as part of GMCT's policy of concealment, and are satisfied that by means of
those accounts, Ansbacher provided a range of services to clients which were calculated
to facilitate those clients in the evasion of their taxation liabilities. The Inspectors are
therefore satisfied that there is evidence tending to show that in this way, Ansbacher
conducted its affairs with intent to defraud the Irish Revenue Commissioners. Mr Collins
must take his share of the responsibility for the decision to open and maintain the
accounts.

Again, as explained in Chapter 3, where an Irish client had funds in foreign currency on
deposit with GMCT, his funds were contained in an account in GMCT's name on the
books of Guinness and Mahon, but with a coded reference. However, all accounts held in
sterling were pooled, and placed in one large account in GMCT's name. Records of the
sub- (or 'memorandum') accounts of the pooled account did not appear on Guinness and
Mahon's books, but instead were held on a computer system maintained by Mr Padraig
Collery, which, although sharing the same hardware as Guinness and Mahon's own
system, was completely independent of it. Customer names were not held on the system;
instead, each account was identified by a code. The clients could use the GMCT
accounts in Dublin to make lodgements to and withdrawals from their Cayman funds, and
these transactions were recorded by Mr Collery and sent on a regular basis to Cayman,
where the account of the client in question was updated accordingly. The Inspectors
have found evidence tending to show that Ansbacher had structured its system in this way
with intent to defraud the Irish Revenue Commissioners. The early directors, including
Mr Collins, must also take responsibility for this. The Inspectors do not consider,
however, that the involvement of Mr Collins was so substantial as to amount to evidence
tending to show the commission of any criminal offence in this regard. As pointed out
above, Mr Collins was principally concerned with the American business of the
company, and did not take an active part in the day-to-day conduct of the Irish business

9.9 Unlicensed banking

The Inspectors have also found in Chapter 5 that there is evidence tending to show that
Ansbacher conducted a banking business in Ireland without the licence required by the
Central Bank Act, 1971 (as amended). For this too, Mr Collins, as a director involved in
the making of the decision to carry on business in Ireland, must take his share of
responsibility. In the opinion of the Inspectors, Mr Collins either approved of or
consented to the carrying on of this banking business, or he was wilfully negligent in not
seeking to prevent it.

9.10 Breaches of the Companies Acts

Mr Collins also knowingly and wilfully permitted GMCT to carry on business in Ireland
without furnishing to the Registrar of companies the information required in respect of
foreign companies by sections 352, 353, 355 and 357 of Part XI of the Companies Act,
1963

9.11 Breach of Cayman law

Finally, Section 10(a) of the Cayman Islands Banks and Trust Companies Law of 1989
(as amended), a Cayman Islands law, forbids a bank licensed under that law from
'opening outside the islands a subsidiary, branch, agency or representative office' without
the prior written permission of the relevant Cayman Islands authority. The information
available to the Inspectors indicates that had Ansbacher applied for such a permission it
would almost certainly have been granted. To do so however would have run counter to
its policy of secrecy and concealment in relation to its Irish business. It did not apply for
such permission and the absence of such permission rendered it in breach of the laws of
the Cayman Islands. For this too Mr Collins must accept his share of the responsibility.
 CHAPTER 10

RESPONSIBILITY OF GUINNESS AND MAHON

INDEX

Page
10.1 Introduction 140

10.2 Involvement of Guinness and Mahon 140

10.3 Conspiracy to defraud 141

10.4 Breaches of taxation legislation 141

10.5 Unlicensed banking 141

10.1 Introduction
The activities of Guinness and Mahon referred to in this conclusion ceased a number of
years prior to the acquisition of Guinness and Mahon by Irish Life & Permanent plc. Irish
Life & Permanent plc bears no responsibility for any of the said activities of Guinness
and Mahon.

10.2 Involvement of Guinness and Mahon

As described in preceding chapters, much of that wrongdoing took place on the premises
of Guinness and Mahon. The Inspectors have concluded that Guinness and Mahon, as
Ansbacher's parent from 1971 to 1984, bears a grave responsibility for its wrongdoing
during that period. During part of that period, Mr Desmond Traynor was both Chairman
of Ansbacher and Managing Director of Guinness and Mahon. Again, the Irish business
of Ansbacher was carried out entirely by Guinness and Mahon personnel during that
time. As described previously, Mr Padraig Collery and Ms Joan Williams were both
actively involved in the promotion and carrying out of Ansbacher's Irish business. The
evidence is that during the relevant period, Guinness and Mahon maintained accounts in
the name of the then GMCT, knowing them to contain funds beneficially owned by Irish
residents. Through the use of the memorandum accounts Guinness and Mahon kept secret
the identity of GMCT's clients. As part of the policy of secrecy surrounding Ansbacher's
Irish business, Guinness and Mahon concealed the nature of the security in bank
documentation, when a loan was secured on a GMCT deposit. Finally, Guinness and
Mahon facilitated Irish residents in making withdrawals from and lodgements to their
GMCT accounts, and provided staff and technical facilities for maintaining GMCT's
Irish accounts and for processing its Irish customer statements.
10.3 Conspiracy to defraud
The Inspectors are satisfied that there is evidence tending to show that from 1971 to
1984, during which time Ansbacher (then called Guinness Mahon Cayman Trust) was its
subsidiary, Guinness and Mahon conspired with Ansbacher to defraud a creditor of
Ansbacher's clients, namely, the Revenue Commissioners, and that that there is therefore
evidence tending to show that during the period 1971 to 1984, Guinness and Mahon may
have committed the offence of conspiracy to defraud contrary to common law, which is
an offence punishable by a fine or imprisonment.

10.4 Breaches of taxation legislation

The conclusion set out above leads the Inspectors to conclude further that there is
evidence tending to show that during the period 1971 to 1984 Guinness and Mahon may
have committed the offence of knowingly aiding, abetting, assisting, inciting or inducing
another person to make or deliver knowingly or wilfully any incorrect return, statements
or accounts in connection with their tax contrary to the provisions of the appropriate tax
legislation now consolidated in Sections 1056 and 1078(2) of the Taxes Consolidation
Act, 1997.

10.5 Unlicensed banking

The matters set out above also constitute evidence tending to show that from 1971 to
1984 Guinness and Mahon aided and abetted Ansbacher to carry on a banking business in
the State without the licence required by Section 7 of the Central Bank Act, 1971.

This leads the Inspectors to conclude further that there is evidence tending to show that
Guinness and Mahon was an accessory to the carrying on of Ansbacher's unlicensed
banking business within the State, and that there is therefore evidence tending to show
that Guinness and Mahon may have committed an offence of carrying on an unlicensed
banking business within the State contrary to Section 7 of the Central Bank Act, 1971 (as
amended).
 RESPONSIBILITY OF GUINNESS MAHON LONDON

INDEX

Page
11.1 Introduction 143

11.2 Lack of co-operation on the parts of Guinness Mahon London and

Investec Bank (UK) Limited 143

11.3 Guinness Mahon London as parent of GMCT 144

11.4 GMCT accounts in Guinness Mahon London 144

11.5 Mr Bruce Ursell 144

11.6 The internal audit of 1989 145

11.7 Back-to-back loans 145

11.8 Mr Richard Fenhalls 146

11.9 Assessment of responsibility of Guinness Mahon London for the

wrongdoing of Ansbacher 147

11.10 Inspectors' recommendation 148

RESPONSIBILITY OF GUINNESS MAHON LONDON

11.1 Introduction
Guinness Mahon & Company Limited, London ('Guinness Mahon London') was
established in 1873 as a sub-office of Guinness and Mahon. In 1923, Guinness Mahon
London became the bank's headquarters. In 1966, Guinness and Mahon became
Guinness and Mahon (Ireland) Limited, which then became a wholly owned subsidiary of
Guinness Mahon London. Guinness Mahon London is now a wholly owned subsidiary of
Investec Bank (UK) Limited.

11.2 Lack of co-operation on the parts of Guinness Mahon London and Investec
Bank (UK) Limited
The Inspectors wrote to Investec on 1 March 2001, seeking information about Ansbacher
pursuant to the Irish Companies legislation. On 9 March, a response was received from
Mr Richard Vardy, company secretary of Investec, seeking evidence of the Inspectors'
authority in the English jurisdiction. The Inspectors accept that as a matter of strict
procedure, their original letter ought to have been addressed to Guinness Mahon London.
Accordingly, they wrote to Guinness Mahon London on 5 April 2001, and by letter of the
same date, so informed Mr Vardy. On 25 April 2001, Mr Vardy wrote again to the
Inspectors, noting the position and saying that the letter to Guinness Mahon London had
been passed to him. Speaking on behalf of both companies, Mr Vardy said that while
neither company wished to obstruct the work of the Inspectors, they were concerned not
to breach any obligations they might owe to customers or to third parties. Mr Vardy
concluded by regretting his inability to be of further assistance. Finally, the Inspectors
wrote again to Mr Vardy on 30 April, noting his concerns as to confidentiality, but
explaining that the information they sought (as set out in their letter of 1 March) related,
not to customers either of Investec or of Guinness Mahon London, but to the organisation
and governance of Ansbacher, which at all relevant times was either a subsidiary of
Guinness Mahon London, or a subsidiary of Guinness Mahon London's subsidiary,
Guinness and Mahon. The Inspectors concluded by suggesting a meeting between them
and representatives of Investec. Mr Vardy responded finally to this letter on 5 June 2001
simply noting its contents and requesting the Inspectors to seek assistance from the UK
Department of Trade and Industry. In the light of the refusal of co-operation from
Investec and Guinness Mahon London, the Inspectors have been obliged to proceed to
draw their conclusions without the benefit of the assistance of the two companies.

11.3 Guinness Mahon London as parent of GMCT

In 1984, Guinness Mahon London acquired GMCT from Guinness and Mahon through
its wholly owned subsidiary Guinness Mahon Overseas Investments Limited. It was sold
again in 1988.

11.4 GMCT accounts in Guinness Mahon London

GMCT had a number of accounts with Guinness Mahon London. Guinness and Mahon
has given evidence to the effect that sterling lodgements made by Irish residents to their
GMCT accounts were frequently made through Guinness Mahon London, either by the
Irish resident giving the funds to Mr Traynor, who lodged them to Guinness and Mahon's
nostro account in Guinness Mahon London, from where they were transferred to
GMCT's account in Guinness Mahon London, or by Irish residents transferring funds
directly to GMCT's account in Guinness Mahon London.

11.5 Mr Bruce Ursell

Mr Bruce Ursell was a director both of Guinness Mahon London and of Guinness and
Mahon during the 1980s. It is clear from numerous documents that he was aware that the
Ansbacher deposits in Guinness and Mahon concealed funds beneficially owned by Irish
residents. In a letter written to Mr Traynor on 17 October 1985 at the time of the latter's
resignation from Guinness and Mahon, Mr Ursell assures him that Guinness Mahon
London would be agreeable to his moving temporarily into a vacant office in Guinness
and Mahon 'and having a computer terminal wired up to tap into the Cayman Bureau'.
The 'Cayman Bureau' was the computer set up specially to hold the coded accounts of
the Irish residents whose funds made up the GMCT deposits.

11.6 The internal audit of 1989

In February 1989, Guinness Mahon London conducted an internal audit on Guinness and
Mahon. The audit report concentrated particularly on Guinness and Mahon's
management and control of the GMCT—or, as they had by then become known, the
Ansbacher—deposits. Commenting on the fact that the management of the deposits was
in the sole charge of an associate director of Guinness and Mahon (Mr Padraig Collery),
the report goes on to say:

'the Associate Director, additionally, manages the related anonymous off-shore

'customer' deposits, on behalf of Ansbacher ... the ledger accounting records of
the Customer Deposits are maintained by the Bank on a 'Bureau System ' ... Thus
the Ansbacher Deposits held on the Bank's computer system are represented by
the Customer Deposits held on the Bureau system.'

The report explains in some detail the management of the account, and Mr Collery's role
therein, including the fact that payments to Ansbacher customers were made from the
Ansbacher deposits held in Guinness and Mahon. It is clear that Guinness Mahon
London knew the purpose of the bureau system.

11.7 Back-to-back loans

Guinness and Mahon was required to report weekly to Guinness Mahon London on credit
issues. From September 1979, Guinness and Mahon reported to an official of Guinness
Mahon London after every executive directors' meeting in which credit matters had been
dealt with. Guinness and Mahon was required to seek sanction from Guinness Mahon
London in respect of every property-backed loan greater than £100,000, and every non-
property-backed loan greater than £250,000. In this way, some of the Guinness and
Mahon loans backed by Ansbacher deposits came before Guinness Mahon London for
approval. Guinness Mahon London also was conversant with Guinness and Mahon's
practice of referring to loans backed with Ansbacher deposits as being 'suitably' or
'adequately' secured (or other similar terminology). This can be seen from the following
examples: An internal memo of 1 May 1990 from Michael Whitmarsh to the Credit
Committee entitled 'G&M Dublin - John Byrne Group Connection' commences T h e
annual renewal for these 'fully adequate' facilities was submitted to Credit Committee on
the 24 April ...' The memo goes on to state that backing deposits are held at Guinness
and Mahon in the name of Ansbacher. (see Appendix VIII(a)) Another memo dated 28
September 1989, same to same, and entitled 'J. Turley connection - G&M Dublin' says:
' The present limits to the Group are set out on page 1 of the accompanying memoranda
[sic] and total an exposure of £450,000 and these are currently secured by 'adequate'
deposits which are effectively under Dublin's control. The Committee will be aware of
the background of such security and the fact that, in certain cases, this may be withdrawn
in the foreseeable future.' (see Appendix VIII(b)).

Evidence was given on behalf of Guinness and Mahon to the effect that in the case of
certain loans, where large sums in pounds sterling were transferred to Guinness and
Mahon from Cayman trusts, the money was transmitted via Ansbacher's seven-day
deposit account in Guinness Mahon London, whence it was placed in Guinness and
Mahon's nostro account in the same bank.

Guinness Mahon London itself provided loans that were backed by Cayman deposits. In
relation to one of these, a loan to PV Doyle Hotels Limited, a memo dated 11 June 1984
from Mr Traynor to Mr Pat O'Dwyer of Guinness and Mahon recites the fact of the loan
and adds 'G&M [Guinness and Mahon] has guaranteed the facility and is charging ¥%
for the Guarantee. The Guarantee is for cosmetic purposes.' (see Appendix VIII(c)).

11.8 Mr Richard Fenhalls

Mr Richard Dorian Fenhalls has at different times held the positions of Managing
Director of Henry Ansbacher and Company, Managing Director of Guinness Mahon
London, Chief Executive of the Guinness Mahon Group, director of Guinness and
Mahon, director of Ansbacher (Cayman) Limited and non-executive director of Irish
Intercontinental Bank ('IIB').

During his time on the boards both of Guinness Mahon London and of Guinness and
Mahon, Mr Fenhalls was well acquainted with Guinness and Mahon's Cayman portfolio.
An internal memo dated 18 December 1984 from Bruce Ursell to the directors of
Guinness Mahon London refers to the 'Cayman loan portfolio' and says that it has been
agreed, in view of the small size of the loan book, 'to accept the assurances of RDF
[Richard Fenhalls] on the working methods and his own look at the portfolio'. It is clear
from a comment in the memo about Mr Traynor that the reference is to loans from
Guinness and Mahon backed by Ansbacher deposits. The memo goes on to say that no
one has looked at the portfolio since 'RDF's' visit eight months previously (see
Appendix VIII(d)).

11.9 Assessment of responsibility of Guinness Mahon London for the wrongdoing

of Ansbacher
The Inspectors conclude that the fact that Guinness Mahon London permitted the
maintenance of the memorandum accounts during the time that Guinness and Mahon was
its subsidiary, the fact that it actively facilitated their continuation when Mr Traynor left
Guinness and Mahon, the fact that it facilitated the lodgement of funds of Irish residents
to their Ansbacher accounts and the fact that it provided loan facilities to Irish residents
which were secured by Ansbacher deposits, when taken together constitute evidence
tending to show that Guinness Mahon London knowingly assisted Ansbacher in
conducting its affairs so as to defraud a creditor of some of its clients, namely, the
Revenue Commissioners, and that there is therefore evidence tending to show that the
common law offence of conspiracy to defraud may have been committed, as well as the
offence of knowingly aiding, abetting, assisting, inciting or inducing another person to
make or deliver knowingly or wilfully any incorrect return, statements or accounts in
connection with their tax contrary to the appropriate tax legislation now consolidated in
Sections 1056 and 1078(2) of the Taxes Consolidation Act, 1997.
11.10 Inspectors' recommendation
While understanding the issues of confidentiality that arise for a bank in relation to
requests for information coming from outside the jurisdiction, the Inspectors nevertheless
point out the obligations imposed by the Companies Acts upon persons who are or may
be in possession of information concerning a company under investigation. At all
relevant times, the Irish business of Ansbacher was conducted in or with the assistance of
Guinness and Mahon, a subsidiary of Guinness Mahon London. The Inspectors take the
view that Guinness Mahon London cannot distance itself from its Irish subsidiary in such
a way as to refuse to provide information relating to the way in which it conducted its
business with Ansbacher - which itself (as has already been pointed out) formed at all
relevant times part of the Guinness Mahon Group structure. The Inspectors are of the
view that those who wish to take the benefit and protection of the limited liability granted
to companies by Irish law must respect the rules under which the limited liability system
operates.

In view, therefore, of the failure of Guinness Mahon London and Investec Bank (UK)
Limited to cooperate with them, the Inspectors recommend that consideration should be
given by the appropriate authorities as to whether an application should be made for
disqualification orders, pursuant to Section 160(2) (e) of the Companies Act, 1990 in
respect of each and every member of the boards of both companies.
 RESPONSIBILITY OF HENRY ANSBACHER HOLDINGS PLC

INDEX

Page
12.1 Introduction 151

12.2 The McAuliffe review 153

12.3 Moving of Ansbacher accounts to IIB 154

12.4 Disquiet of Ansbacher's auditors 154

12.5 Mr Fenhalls' growing concerns about Mr Traynor 156

12.6 The Jennings-McAuliffe investigation and the discovery of the Hamilton

Ross accounts 158

12.7 Implications of the Hamilton Ross discovery 159

12.8 Jennings and McAuliffe seek legal advice 161

12.9 Removal of Hamilton Ross from Ansbacher's books 161

12.10 First appearance of Hamilton Ross in Ireland 162

12.11 Continuation of remaining Irish business 162

 Page
12.12 Concerns of First National Bank of Southern Africa 163

12.13 Assessment of the responsibility of Henry Ansbacher Holdings

plc for the wrongdoing of Ansbacher 164

12.14 Unlicensed banking 164

RESPONSIBILITY OF HENRY ANSBACHER HOLDINGS PLC

12.1 Introduction
As described earlier in the Report, Mr Richard Fenhalls, former chief executive of the
Guinness Mahon Group, had become chief executive of the Henry Ansbacher Group in
1985. In 1988, pursuant to his desire to build up an offshore banking group for Henry
Ansbacher, he entered into negotiations with Mr Traynor, Mr Collins, Mr Furze and Mr
Hart for the purchase of GMCT, which was by then owned by Chichester Investments
Limited, a company of which they were the shareholders, and which, as shown above,
had earlier purchased GMCT from Guinness and Mahon. The negotiations reached a
successful conclusion, and in August 1988, Henry Ansbacher Holdings plc acquired a
75% interest in the Company at a price of £750,000 cash plus shares in Henry Ansbacher
Holdings plc valued at £2.25 million. Following the share sale, Mr Traynor was
appointed Chairman, GMCT's name was changed to Ansbacher Limited on 29 August
1988, and the Company remained under that name until November 1992, when it became
known as Cayman International Bank and Trust Company Limited. The Henry
Ansbacher Group owned GMCT until 20 January 1993 when First National Bank of
Southern Africa Limited purchased the entire Henry Ansbacher Group.

Henry Ansbacher Holdings held the shares in GMCT only for a period of four months, at
which time they were transferred to the Ansbacher Offshore Group in Guernsey as part of
a group reorganisation. Solicitors for FirstRand (the present owners of Ansbacher) have
told the Inspectors that, thereafter, responsibility for the offshore subsidiaries lay with the
Ansbacher Offshore Group, senior management of which were based in Guernsey. The
Inspectors are satisfied that this did not alter the reality of the situation, namely that
responsibility for decisions taken in relation to GMCT rested at all times with London
management. That this was so is clear from documentation provided to the Inspectors by
Henry Ansbacher & Company of London, which includes extracts from minutes of board
meetings, and meetings of the Audit and Compliance committees of Henry Ansbacher &
Company Ltd and Henry Ansbacher Holdings Ltd. These extracts show that the meetings
(which were held in the 1990s, and thus long after the transfer of the shares to Guernsey)
frequently considered matters relating to Ansbacher (Cayman) Limited. Included in the
same documentation are memos relating to Ansbacher (Cayman) Limited from Mr
Fenhalls, written on Henry Ansbacher headed paper. A letter dated 5 February 1992 from
Mr Fenhalls to Mr Fraser Jennings of Henry Ansbacher is also written on Henry
Ansbacher notepaper, and deals exclusively with Cayman matters. Some extracts from
that letter exemplify the matter (Inspectors' emphasis):

'The total cost of your package, which is to be agreed, would be paid for by the
Cayman Islands, but will be prorated between time spent on Cayman Island work
and the rest of the Group; that is to say, when you are in London _ for your monthly
Henry Ansbacher Holdings plc Executive Committee meetings - this ultimately
would be a London cost.'

'As you know, I have never conceived of your role in the Cayman Islands as a
permanent appointment. The whole issue behind sending you out there was to
understand the risk _profile of the organisation and the business and to _put it right
from an administrative and professional point of view.'

' This may all seem a little trite to you in the light of our conversations that what
you were going to do was put in place in the Cayman Islands the exact replica of
what we do in London ...'

'I have said to Hugh that I have no idea how long the job you have been asked to
do will take overall. My real delight would be if it could be done sooner rather
than later, but I know that we have to get it done.'

The Inspectors are satisfied therefore that their conclusions in this regard properly relate
to Henry Ansbacher Holdings.
The Inspectors have concluded in Chapter 5 that there is evidence tending to show that
GMCT/Ansbacher was guilty of certain wrongdoing. The Inspectors now consider what,
if any, responsibility should be borne by Henry Ansbacher Holdings plc for Ansbacher's
wrongdoing during the period 1988 - 1993.

12.2 The McAuliffe review

Prior to Ansbacher's purchase of the company, Mr Kevin McAuliffe, the then financial
director of the Ansbacher Offshore Group, visited Cayman to conduct a review. His brief
was essentially to review the organisational structure, systems and controls within the
company, and to comment on strengths and weaknesses. His review did not turn up any
problems significant enough to prevent the acquisition. However, among the weaknesses
identified by him, some are of note in the light of later events. Under the heading
'General Systems/Controls' Mr McAuliffe notes that the receipt of telephone instructions
by trust officers is not recorded on client files, nor confirmed in writing. Again, under the
heading 'Standard of management of companies/trusts' he remarks that no trustee
minutes are kept. This practice of non-minuting of trustee decisions facilitated the system
described elsewhere, whereby Irish residents could withdraw funds from offshore trusts
by means of a simple request to Mr Traynor in Dublin and underlines what the Inspectors
have concluded was a sham trust structure in the manner of its operation.

An investigation of the loan book was undertaken by KPMG Peat Marwick. Mr John
Button, another Henry Ansbacher director, wished to have further investigations
undertaken, but was dissuaded from this ambition by Mr Fenhalls. According to a
corporate history document prepared for the Inspectors by Ansbacher (Cayman) Limited
in July 2001, Mr Fenhalls acted in this way because

'in common with most bankers at the time, he believed that a bank could
only fail if its loans collapsed (i.e. through non repayment for whatever
reason) Corporate transactions were not seen as a likely cause of failure.
Here GMCT had a large deposit base (largely placed in the money
markets) but, importantly, relatively little advanced in commercial loans.
 Having satisfied himself about the loan book, there seemed to him little
needfor any more comprehensive due diligence'.

Mr Fenhalls himself gave evidence to the Inspectors to the same effect. The
investigations found nothing to cause any concern in relation to the Irish business of
GMCT.

12.3 Moving of Ansbacher accounts to IIB

Over the years that followed, Mr Fenhalls became increasingly worried about the credit-
worthiness of Guinness and Mahon, and he told the Inspectors that by 1991 he had come
to the view that it was unsafe for Ansbacher to continue to place large group deposits
with it. He discussed the position with Mr Traynor, who, according to Mr Fenhalls, was
reluctant at first to close the accounts. Finally, however, on the instructions of Mr
Fenhalls he did so, and opened new accounts with IIB. Mr Fenhalls had first paved the
way with that bank where, of course, he was well known, having formerly been a
member of its board. Ansbacher thus became a customer of IIB, holding accounts in the
same way as it had held them in Guinness and Mahon, namely, on behalf of its clients. As
outlined earlier in this Report, memorandum accounts continued to be maintained by Mr
Collery in the offices of CRH, and everything continued much as before.

12.4 Disquiet of Ansbacher's auditors

Around the same time, more serious concerns began to trouble Ansbacher's management.
At a board meeting on 30 October 1991, it was noted

'The auditors of Ansbacher Limited, Cayman Islands, had expressed

disquiet on various outstanding matters in regard to the movement of
funds on the Dublin accounts held in the Cayman Islands. Mr Fenhalls

3
Ansbacher remained a customer of Guinness and Mahon to a small extent even after 1991, with
some cash-backed loan accounts remaining on the books until Guinness and Mahon's takeover by Irish
Permanent in 1994.
 requested Mr Jennings to pursue this matter during the latter's
discussions next week with Mr Traynor.'

Mr Jennings carried out this commission, and reported back to Mr Fenhalls in a memo
dated 12 November 1991, in which he expresses concern on a number of fronts. From
this memo it is clear that the following matters had been raised with Mr Traynor: the
concern that he was the sole signature on the accounts and concerns about instructions on
the accounts. Mr Traynor had dealt with the first concern by saying that it was 'fatuous',
as the individuals concerned were his clients, and that as a matter of practicality there was
nobody else available to perform the task. In relation to the second concern, Mr Traynor
said that it was unfounded 'given the longstanding and personal nature of the
relationships involved'. Mr Jennings concludes as follows:

'On a broader note, Ifeel we must accept and respect the secrecy attached
to the offshore deposits . but in doing so recognise the trust and
responsibility empowered to offshore's senior executives to ensure that
their activities are at all times in compliance with both the relevant
regulating bodies and the bank's own rules of conduct.' (See Appendix
IX(a)).

Mr Fenhalls took a high tone in response to any implied criticism of Mr Traynor's

conduct, saying that he accepts Mr Traynor's explanations and continuing:

'I find it inconceivable to make the assumption that the Chairman of

Ireland's largest Company, director of a number of prestigious Irish
companies, adviser to the good and great in Dublin and approved by the
Central Bank of Ireland to be a fit and proper person to run a Bank would
be conducting improper, illegal or clandestine activities contrary to the
law. What I suggest we do to put an end to the situation is as follows: - I
propose that you and John Button visit Des, go through what he does, how
he does it, and we advise the Audit Committee and the Auditors thereafter
 that we are satisfied with the overall position (if we are) '. (see Appendix
IX(b)).

12.5 Mr Fenhalls' growing concerns about Mr Traynor

Throughout the year that ensued, concerns in relation to the Dublin accounts were raised
periodically at meetings of the board of directors and of the audit and compliance
committees, usually with the comment that the matter was being looked into. Extracts
from the relevant minutes can be found at Appendix IX(c). It would appear that the
growing concerns had considerably altered Mr Fenhalls' view of Mr Traynor's conduct,
because in a draft internal memo dated 16 September 1992, Mr Fenhalls, referring to
management restructuring, and the position of Mr Traynor within the company, says:

'With regard to Des Traynor, my view is that the sort of business that he
can usefully introduce to the Cayman Islands is more than outweighed by
the regulatory risks involved of his conducting a pseudo banking business
in Dublin ...
...For some time now we have been concerned about the regulatory
aspects of someone physically present in Dublin maintaining accounts in
the Cayman Islands for the benefit of Irish residents.' [Inspectors'
emphasis]

Mr Fenhalls goes on to say that he believes the time has come to 'unwind' the Dublin
accounts and place them with a bank of Mr Traynor's choice. In this memo, Mr Fenhalls
is not speaking about the Hamilton Ross business described later in this chapter, which
coincidentally was revealed to him on that very day. He told the Inspectors that he was
satisfied that at the time he wrote the draft memo, he had not yet received the
Jennings/McAuliffe fax of the same date (see below ). He told the Inspectors that the
memo was a record of 'an increasingly growing concern' explaining it as follows:

'You know the first time someone says no to you there is not a problem
you accept it, you go through this and then factors become more prevalent
 and you have more internal memos from colleagues, you have more
questions raised, inevitably this is going to raise a concern.'

Asked by the Inspectors what factors influenced him, prior to the revelation of the
Hamilton Ross business, in forming the view that the Dublin accounts should be
unwound, Mr Fenhalls replied:

'I suspect, but do not know it was again that they were never a large
income producer. There had been quite a lot of ongoing operational
difficulties. There were [sic] the management hassle of having one
signature as opposed to two. All these blind trusts where Traynor was
dealing with them on his own. Ultimately things just are not worth the
managerial hassle and I think this was the easiest way in retrospect to
bring it all to a conclusion.'

The Inspectors pointed out to Mr Fenhalls that one of the concerns that appeared to be
reflected in the document was that of Irish Exchange Control. The following exchange
then took place, commencing with Mr Fenhalls' reply:

'A. Yes, but equally well if Irish residents were drawing cash from
offshore trusts I think it is a perfectly proper question to ask, you know, 'Is
this in breach of exchange control and is this absolutely acceptable in
central banking terms?' and I was consistently assured that it was.
Q By Mr Traynor?
A Yes, of course. I don't know who else could have assured me.
Q This was what I was curious to find out, did you, at any stage, seek
legal advice from lawyers in Ireland as to what was the position under
Irish exchange control laws?
A No.
Q Or any banking advice?
A I don't see what banking advice I could have taken. Frankly, this
 goes back to the extent and level of enquiry that you do in relation to your
senior and trusted colleagues. It is very easy for you to say in hindsight
A,B, C ought to have been done. Do not lose sight of the fact that this was
a senior respected figure who knew the banking regulations better than I
did and was telling me that this was perfectly acceptable.
Q As a matter of fact then no other advice or assurance was sought
other than what Mr Traynor had said?
A Absolutely.'

12.6 The Jennings-McAuliffe investigation and the discovery of the Hamilton

Ross accounts
Meanwhile, back in 1989, the Henry Ansbacher Group had purchased another Cayman
company, CITCO. Henry Ansbacher then set about merging its two Cayman businesses.
The proposed merger apparently met with some resistance, particularly from Mr John
Furze. This difficulty, together with a growing realisation of the autonomy enjoyed by Mr
Traynor in his conduct of the Irish business of Ansbacher, prompted Mr Fenhalls to
second Mr Fraser Jennings and Mr Kevin McAuliffe to Cayman in early 1992. As part of
his secondment, Mr Jennings was made a managing director of Ansbacher. At that time,
the main concern in relation to Mr Traynor's activities was one of internal control.
Accordingly, Mr Jennings undertook an investigation of the business carried out by Mr
Traynor.

On 16 September 1992, Messrs Jennings and McAuliffe faxed Mr Fenhalls and Mr

Button from Cayman to relate the discovery of a matter hitherto unknown to the English
management (see Appendix IX(d)). Having asked Mr Furze why it was not possible to
ensure that transactions recorded in the memorandum accounts in Dublin would be
entered in the books of Ansbacher more speedily, Mr McAuliffe had been told that there
were approximately 250 transactions per month on the memorandum accounts, and that
the majority were passed through a Cayman company called Hamilton Ross Limited. Mr
Furze described Hamilton Ross's business as being that of receiving deposits in Ireland
from clients, and then banking them in IIB 'on behalf of AL [Ansbacher Limited]'. Upon
further investigation by Messrs Jennings and McAuliffe, it emerged that Hamilton Ross
was a Cayman company formed in 1981, whose directors were Mr Furze and two others.
Mr Furze was the registered owner of the majority shareholding. The company had no
reserves, and appeared to be used exclusively for the purpose of the collection and
onward transmission of deposits to Ansbacher.

An examination of the books of Ansbacher showed twenty-nine deposit accounts in the

name of Hamilton Ross, each of which showed a numeric sub-designation. These were
funded from a similar number of 'suspense' accounts, the majority of which carried no
sub-designation. Mr Furze said that once a quarter, statements of these accounts were
printed in Ireland and were given to the underlying clients. Messrs Jennings and
McAuliffe noted that Hamilton Ross did not have a bank mandate for the operation of its
accounts with Ansbacher. The two men also found another company with similar
bookkeeping but with a lesser number of sub-accounts. This entity was Poinciana Fund
Limited. The remaining Irish business appeared to them to consist of individual deposits
sourced in Ireland and placed by managed companies and trusts with Ansbacher.

12.7 Implications of the Hamilton Ross discovery

In the course of his evidence to the Inspectors, Mr Fenhalls impressed upon them that this
was shocking news for Ansbacher management. However, from what has already been
written, it will be clear that management had been concerned about the possible legal
implications of the Irish business for at least a year before. It would seem that what
troubled Mr Fenhalls most in relation to the Hamilton Ross business was the fact that the
identities of Hamilton Ross's clients were unknown to Ansbacher, and it was this,
coupled with what he saw as a betrayal of trust on the part of Mr Traynor, that shocked
him, rather than the regulatory aspects of the matter.

It is clear, however, that Mr Jennings and Mr McAuliffe saw the wider picture. They
were greatly disturbed by their findings concerning Hamilton Ross and Poinciana, and in
their fax to Mr Fenhalls, summarised the areas which caused them concern as follows:
 • 'Carrying out a deposit taking activity in Eire without a licence.
• Trading within Eire without declaring this to the Revenue.
• Possible breach of Eire Exchange Control
• Assisting Eire residents to avoid Eire tax.
• Failure to comply with the Money laundering regulations.
• Possible risk of error on money transfer between the clients and AL.
• Risks associated with the absence of dual controls'

They stressed that it was necessary to take urgent action in order to ensure the speedy
termination of the Hamilton Ross and Poinciana business. They also felt that
consideration should be given to the desirability of keeping on any remaining Irish
business. A note in Mr Fenhall's handwriting, dated 17 September, appears on the face
of this fax. It says:

'JMB [Mr John Button] will handle: find out facts: will get off books by
end September. Will advise if not: JDT's position agreed to be untenable
and he would have to go in due course. RDF.'

Despite the apparently robust reaction indicated by the above handwritten note, a
responding fax sent to Messrs Jennings and McAuliffe by Mr Fenhalls' colleague, Mr
Button, on the following day was more measured in its tone. Mr Button had by then
spoken to Mr Traynor, and had been somewhat reassured. Among other things, Mr
Traynor said he would be happy to remove the deposits from Ansbacher by the end of
September, if Ansbacher so wished. He also assured Mr Button that Hamilton Ross was
not taking deposits as principal, but was placing them as fiduciary for individual clients
with Ansbacher. The Inspectors have found it to be a remarkable feature of the
Ansbacher management's investigation of the Irish business that the alarm and concern
induced by every fresh indication of what was going on was always allayed by a
conversation with Mr Traynor. London management appeared to accept with very little
question Mr Traynor's assurances that no laws were being or had been broken, and
perhaps this is yet again a measure of the confidence and trust that Mr Traynor inspired in
all who met him. In the course of Mr Fenhalls' evidence to the Inspectors, it was put to
him that every so often, he would approach Mr Traynor with his concerns, and would
come away reassured. Mr Fenhalls agreed that this was so, but added, significantly:

'the fact that I kept on going back to Traynor and asking these questions
thus indicate that I am becoming increasingly more concerned.'

It is also remarkable, in the Inspectors' view, that management focussed all its energy on
the Hamilton Ross and Poinciana business, but ignored the remainder of the Irish
business, in spite of the fact that Mr Jennings had strongly recommended reconsideration
of the maintenance of that business.

12.8 Jennings and McAuliffe seek legal advice

Messrs Jennings and McAuliffe had also taken the step of seeking legal advice on the
matter in the Cayman Islands. A file note of Mr Tim Ridley, an attorney with the firm of
Maples & Calder, recounts in informal style the visit of the two men to his office at short
notice on 16 September 1992 and comments that the matter was 'extremely convoluted in
the best tradition of the Irish Gnomes'. Mr Ridley found himself unable without more
information to say whether Hamilton Ross was carrying on an unlicensed banking
business, but he was quite satisfied that what was going on was extremely bad banking
practice. He thought 'that any banking regulator would throw a fit if he knew about it.'
He gave it as his opinion that the business was not an appropriate one for Ansbacher, and
recommended that they should get rid of it (see Appendix IX(e)).

12.9 Removal of Hamilton Ross from Ansbacher's books

There appears to have been a rumour going around at this time that Mr Traynor and Mr
Furze were going to leave because of the decision to drop the Hamilton Ross business. A
handwritten file note dated 21 September 1992 and signed by Mr Fenhalls notes a
discussion with Mr Jennings about the matter, in which Mr Jennings told him he had no
knowledge of such a move. He also told Mr Fenhalls that Hamilton Ross belonged to Mr
Traynor, and confirmed that it would be off Ansbacher's books by 30 September 1992.
Indeed, minutes of a meeting of the combined Audit and Compliance committees of
Henry Ansbacher Holdings plc and Henry Ansbacher & Company Limited on 5 October
1992 show that Mr Button advised the meeting that the Hamilton Ross and Poinciana
accounts had now been closed.

12.10 First appearance of Hamilton Ross in Ireland

Back in Ireland, Mr Traynor gave instructions to IIB, the effect of which was that the
clients' funds which had been in an Ansbacher pooled account in IIB, and held in an
account in the name of Hamilton Ross in Ansbacher in Cayman, now ceased to be held in
any Ansbacher account either in Ireland or in Cayman. Instead, they were held on the
clients' behalf in IIB in an account in the name of Hamilton Ross Limited. From then on,
those people who had hitherto been clients of Ansbacher became simply clients of
Hamilton Ross. Statements of the memorandum accounts continued to be printed on
Ansbacher headed paper until January 1993, but Mr Collery has explained to the
Inspectors that this was because he was using up existing stationery until new stationery
was printed. Mr Collery is clear on one vital point, namely, that from 30 September 1992
these statements were no longer sent for reconciliation to Ansbacher, instead, they were
sent to Hamilton Ross at its Cayman address.

12.11 Continuation of remaining Irish business

The remainder of the Irish business carried on as before. In a management letter signed
on 30 October, 1992, KPMG Peat Marwick, auditors to Ansbacher, identified what they
referred to as the 'Dublin accounts' as an area of weakness on the Ansbacher books. They
described these accounts as follows:

'There is a book of customer accounts ('Dublin accounts') which are

operated and controlled in Dublin, Ireland by the Chairman of Ansbacher
Limited. The Dublin accounts are operated outside the regular internal
control environment of Ansbacher Limited. The documentation supporting
the balances and transactions through these accounts is weak and in
general transactions are initiated verbally by the beneficiaries of the trusts
 which own the account holding companies. The only control over these
accounts has been that a managing director has prepared statements for
the operating companies and these have been approved annually by the
trust beneficiaries. Accordingly any irregularities in the operation of these
accounts could remain undetected for up to twelve months. We have seen
no formal consideration of the regulatory and taxation consequences of
the Company operating these accounts from Dublin.'

The auditors recommended:

' The Directors should consider the desirability of operating these

accounts outside the regular internal controls of the company and obtain
advice on the possible consequences of carrying on business in Dublin'
(see Appendix IX(f)).

In the view of the Inspectors, the above letter ought to have caused alarm bells to ring in
the ears of London management, coming as it did so soon after the Hamilton Ross
debacle, and using phraseology reminiscent of the Jennings-McAuliffe fax. But nothing
was done. The last memorandum account was not closed until after the sale to First
National Bank of Southern Africa.

12.12 Concerns of First National Bank of Southern Africa

In the same month of October 1992, Mr Fenhalls, together with Mr Brian Lavelle of the
First National Bank of Southern Africa met with Mr Traynor to discuss the whole
question of the Dublin accounts. At that meeting, the following issues were raised:

'To what extent was there a permanent establishment created in Dublin

and to what extent was a Banking licence needed to conduct the business
in the manner in which it was conducted, particularly as the mind and
management of the accounts was in Dublin?'
Mr Fenhalls indicated that he did not think it was banking business, but noted in a
subsequent memo that the 'regulatory consequences' of the way in which the Dublin
accounts were managed remained to be dealt with (see Appendix IX(g)).

12.13 Assessment of the responsibility of Henry Ansbacher Holdings plc for the
wrongdoing of Ansbacher
The Inspectors are of the view that Ansbacher's London management was on notice of
the possible regulatory concerns relating to the Irish accounts at least from October 1991.
In particular, they were aware of the possibility that an unlicensed banking business was
being carried on in Ireland. The Inspectors note that Mr Fenhalls in his evidence assured
them that if he had known that regulatory breaches had occurred, he would have taken
immediate action to put an end to them. However, the Inspectors note the failure of
Henry Ansbacher Holdings plc to obtain advice from anyone other than Mr Traynor on
the regulatory implications of the Dublin accounts, which, the Inspectors conclude,
permitted the continuation of those accounts (excluding the Hamilton Ross and Poinciana
accounts) notwithstanding warnings from Messrs Jennings and McAuliffe and
Ansbacher's auditors. The Inspectors conclude that Ansbacher's London management
ought to have taken legal advice on the issue, and ought not to have accepted the
assurances of Mr Traynor that the matter was not of concern. They are satisfied that if
London management had sought and received legal advice to that effect, the unlicensed
banking business would have ceased at a date earlier than it did.

12.14 Unlicensed banking

The Inspectors therefore conclude that, insofar as the evidence tends to show the
continuation of an unlicensed banking business in Ireland after October 1991,
Ansbacher's London management bears responsibility.
 FIRST NATIONAL BANK OF SOUTHERN AFRICA LIMITED

INDEX

Page

13.1 Introduction 166

13.2 Death of Mr Traynor 166

13.3 Resignation of Mr Furze 166

13.4 Winding down of Ansbacher's Irish business 167

CHAPTER 13

FIRST NATIONAL BANK OF SOUTHERN AFRICA LIMITED

13.1 Introduction
On 20 January 1993, the entire Henry Ansbacher Group was purchased by First National
Bank of Southern Africa Limited ('FNBSA'). The Cayman Island subsidiary assumed its
present name of Ansbacher (Cayman) Limited in September 1994. FNBSA remained the
parent company of the Cayman company until 1998, when FirstRand, the present owner,
acquired its shares. FNBSA has co-operated with the Inspectors by making available to
them documentary and oral evidence. The Inspectors commend this co-operation.

The Irish business of Ansbacher (Cayman) Ltd having concluded in 1996, the Inspectors
have considered the question of what, if any responsibility FNBSA should bear for the
Company's wrongdoing from 1993 to 1996. During that period, a number of events took
place.

13.2 Death of Mr Traynor

In April 1993, Mr Traynor resigned as Chairman and became a non-executive director,
which position he held until his death in 1994. After Mr Traynor's death, Mr Collery took
over his role and at the request of Ansbacher (Cayman) Ltd, began the winding down of
operations in Ireland. Mr Collery had never been an employee of the Cayman bank, but
had, it appears, been paid personally by Mr Traynor. However, following Mr Traynor's
death, he was paid a retainer by the Company to 'ensure an orderly transition in respect
of /Ansbacher] 's dealings with Irish clients' (see Appendix II(c)).

13.3 Resignation of Mr Furze

In April 1995, two significant changes occurred: Mr Furze resigned as executive director
and Mr Collins became a non-executive director, which position he held until his
resignation on 31 October 2000
13.4 Winding down of Ansbacher's Irish business
The Inspectors accept that the winding down of the Irish business began shortly after the
takeover by FNBSA. Although FNBSA permitted Mr Traynor and Mr Furze to continue
to serve on the board of Ansbacher (Cayman) Ltd - in Mr Traynor's case until his death,
and in Mr Furze's case until 1995 - the Inspectors note that this was motivated by a wish
to protect the Company from adverse reaction to the resignation or dismissal of the
Chairman and an executive director. All of the Irish business was ultimately wound up
prior to the commencement of the investigation of these matters undertaken by the
McCracken Tribunal.

Taking all the circumstances into account therefore, the Inspectors conclude that it would
be unfair to categorise FNBSA as having equal responsibility with others for the conduct
of the Company's unlicensed banking business.
 PART IV

ASSISTING ANSBACHER (CAYMAN) LIMITED

Introduction to Part IV
The Order of 22 September 1999 appointing the Inspectors obliges them, inter alia, to
identify as far as possible all of the parties who were either officers (including shadow
directors) or agents of the Company, clients of the Company or who otherwise assisted in
the carrying out of the business at the relevant time. This Part of the Report considers
those parties who assisted in the carrying out of the business at the relevant time.

The Inspectors have concluded that a wide range of persons and bodies assisted the
carrying out of the Ansbacher business at different times and indeed that without their
help the business could not have been continued. However, the Inspectors are conscious
that some of the parties who helped Ansbacher in the carrying out of its Irish business
may have done so without knowing the true nature of the Ansbacher business or the
wrongdoing committed by Ansbacher. Accordingly, in an effort to be fair to all parties,
the Inspectors, in reporting on the parties who assisted, have distinguished between those
parties who may be said to have knowingly assisted and those parties who assisted
without knowledge of the true nature of the Ansbacher business or the wrongdoing being
committed by Ansbacher. Where the party providing assistance to Ansbacher is a body
corporate, the Inspectors have been conscious of the fact that special legal rules apply
when seeking to ascertain whether a body corporate (as opposed to an individual officer,
agent or employee of the corporation) may be said to have acquired knowledge. 1

1
See, inter alia, the decision of Viscount Haldane in Lennard's Carrying Company Limited v.
Asiatic Petroleum Company Limited [1915] AC 705; the decision of Denning L.J. in H.L. Bolton
(Engineering) Company Limited v. T.J. Graham & Sons Limited [1956] 1 QB 159; the decision of the
House of Lords in Tesco v. Nattrass [1972] AC 153; the decision of Lord Hoffmann in Meridian Global
Funds Management Asia Limited v. Securities Commission [1995] 3 All ER 918 and the decision of both
the High Court and Supreme Court in the Attorney General (SPUC) v. Open Door Counselling Limited and
the Dublin Well Woman Centre Limited [1988] IR 593.
 INDEX

Page

14.1 Introduction 171

14.2 Conclusions 171

14.3 Assisting to defraud 171

14.4 Assisting the carrying on of an unlicensed banking business 172

14.1 Introduction
As related in Chapter 10, the Inspectors have found evidence tending to show that
Guinness and Mahon was responsible for the wrongdoing of Ansbacher (then known
as GMCT) during the time when it was Guinness and Mahon's subsidiary, that is,
between 1971 and 1984. There is, however, another aspect of the relationship
between Ansbacher and Guinness and Mahon to be considered. This chapter relates to
whether or not Guinness and Mahon assisted GMCT in the period after it ceased to be
its subsidiary. GMCT continued to conduct its Irish business from the premises of
Guinness and Mahon until the departure of Mr Traynor in 1986. Even after that date,
Guinness and Mahon continued to maintain the Ansbacher accounts upon its books.
This continued until the accounts were moved to IIB in 1991.

14.2 Conclusions
Up to 1989, when the memorandum accounts were moved to Mr Traynor's office at
42 Fitzwilliam Square, Guinness and Mahon continued to conceal the identity of
Ansbacher's clients, through the use of the memorandum accounts, and continued to
provide staff and technical facilities for keeping Ansbacher's Irish accounts and for
processing its Irish customer statements. From 1989 to 1991, when the Ansbacher
accounts were transferred to IIB, Guinness and Mahon concealed the fact that
accounts in the name of Ansbacher contained funds beneficially owned by Irish
clients, concealed the nature of the security in bank documentation when a loan was
secured on an Ansbacher deposit and facilitated Irish residents in making withdrawals
from and lodgements to their Ansbacher accounts
14.3 Assisting to defraud
The Inspectors have therefore concluded that from 1971 to 1991, there is evidence
tending to show that Guinness and Mahon knowingly assisted Ansbacher to conduct
its affairs with intent to defraud the Revenue Commissioners and was knowingly a
party to the carrying on of the business of Ansbacher with that intent.

14.4 Assisting the carrying on of an unlicensed banking business

The Inspectors have also concluded that the concealment of the fact that accounts in
the name of Ansbacher contained funds beneficially owned by Irish clients and the
facilitation of Irish residents in making withdrawals from and lodgements to their
Ansbacher accounts from 1984 to 1991 constitute evidence tending to show that
Guinness and Mahon aided and abetted Ansbacher to carry on a banking business in
the State without the licence required by Section 7 of the Central Bank Act, 1971 (as
amended). This means that there is also evidence tending to show that Guinness and
Mahon was during that time an accessory to the carrying on of Ansbacher's
unlicensed banking business within the State, and that there is therefore evidence
tending to show that that Guinness and Mahon may have committed an offence of
carrying on an unlicensed banking business within the State contrary to section 7 of
the Central Bank Act, 1971 (as amended).
 CHAPTER 15

ASSISTANCE PROVIDED BY CRH PLC

INDEX

Page
15.1 Introducti on 175

15.2 Mr Traynor's relationship with CRH 175

15.3 The nature and extent of the assistance afforded by CRH 177

15.4 Mr Traynor's use of CRH employees for Ansbacher business 177

15.5 42 Fitzwilliam Square 177

15.6 Incoming post for Ansbacher 178

15.7 Preparation of Ansbacher statements 178

15.8 Lodgements to Ansbacher accounts 179

15.9 Withdrawals from Ansbacher accounts 179

15.10 Work of Mr Padraig Collery on CRH premises 181

15.11 Work of Mr John Furze on CRH premises 181

15.12 Ansbacher letterhead 181

15.13 Visits of Henry Ansbacher executives to 42 Fitzwilliam Square 182

15.14 After Mr Traynor's death 182

15.15 Knowing or unknowing assistance? 183

15.16 The range and duration of the activities carried out on CRH premises 183

15.17 Transparency of conduct of Ansbacher business at 42 Fitzwilliam Square 183

15.18 CRH directors as clients of Ansbacher 184

15.19 Mr James Culliton 184

15.20 Mr Anthony Barry 184

15.21 The location of the Chairman's office 187

15.22 No knowledge of the CRH Board 187

15.23 No collective knowledge 187

15.24 Absence of knowledge on the part of many 188

15.25 Trust in Mr Traynor 188

15.26 Conclusion 188

15.1 Introduction
Mr Traynor was appointed chairman of CRH Plc in 1987 and remained as such until his
death in 1994. From some time in 1989, the Irish business of Ansbacher was conducted
from the premises of CRH, making use of CRH's facilities. In this chapter, the
Inspectors examine the relationship between Mr Traynor and CRH, identify the nature
and extent of the assistance afforded to Ansbacher by CRH and question whether that
assistance can be said to have been knowingly provided by CRH.

15.2 Mr Traynor's relationship with CRH

Prior to 1970, Mr Traynor had been a non-executive director of Irish Cement Limited.
In 1970, Irish Cement Limited and Roadstone Limited merged to form the company
now known as CRH. Mr Traynor became a non-executive director of CRH from the
date of its formation. From 1973 until 1987, Mr Michael Dargan was Chairman of
CRH. At a board meeting of the company on 9 April 1986, Mr Dargan announced his
intention to resign as Chairman at the AGM in 1987. At the same meeting, Mr Traynor
was appointed Deputy Chairman with immediate effect. This was tantamount to being
appointed Chairman designate. On 13 May 1987, Mr Dargan formally tendered his
resignation as Chairman and by unanimous resolution Mr Traynor was appointed in his
stead, with effect from the end of that meeting.

Prior to his appointment as Deputy Chairman and then as Chairman, Mr Traynor had
been an active member of the board of CRH. He attended board meetings regularly and
was active on the board's various sub-committees. From the time of his appointment as
chairman until his death in 1994, he was a continuous member of the Acquisitions
Committee, the Finance Committee and the Standing Orders/Chairman's Advisory
Committee for the years ending 30 June 1991, 1992, 1993 and for the year of his death.
He was also a member of the Remuneration Committee.2

During Mr Traynor's time with CRH, it always ranked in the top five Irish companies,
holding the number one position in three years, 1980, 1989 and 1990.3 In his period as
chairman, CRH's turnover increased from €916.2m to €2,064.8 m (2.25 times) and
market capitalisation increased from €433.26 m to €1,584.63 m (3 .75 times).

By the time Mr Traynor became chairman of CRH, he had apparently divested himself of
all outside executive functions. Accordingly, he had no place of work other than the
office provided to him by CRH. The Chairman's office was originally situated at 19
Lower Pembroke Street, Dublin, but moved to 42 Fitzwilliam Square Dublin in 1988.
From that time until the time of his death, 42 Fitzwilliam Square was Mr Traynor's only
place of work. He worked there full time. The board of CRH knew that Mr Traynor had
other interests and that he used the office and facilities provided to him by CRH to pursue
those other interests. Amongst those other interests was Mr Traynor's involvement in
banking and, in particular, in the Cayman Islands subsidiary of Guinness and Mahon.

Mr Anthony Barry was the chief executive of CRH from 1988 until Mr Traynor's death
in 1994 and succeeded him as Chairman of the company. Mr Barry told the Inspectors
that it was not unusual for a major corporation wishing to have the services of a full time
Chairman to make office and secretarial facilities available to the chairman to enable him
pursue his other interests. He also told the Inspectors that he was aware of Mr Traynor's
continuing interest in banking and in particular in the Guinness and Mahon subsidiary in
the Cayman Islands. At a later stage, he learned that 'Ansbacher had bought the
business'. Mr Patrick Molloy, the current Chairman of CRH, confirmed to the Inspectors
that, based on inquiries he had made of directors at the time, it was known that Mr
Traynor had some ongoing involvement with Guinness and Mahon / Ansbacher. Mr

2
Information supplied by Gerrard Scallan & O'Brien Solicitors.

3
Ranking is assessed by reference to market capitalisation
Traynor attended at the CRH offices daily arriving early in the morning before most of
the other staff and leaving usually some time around mid afternoon. Approximately two
days a week would have been spent on CRH business with the balance of the week being
spent pursuing his other interests

15.3 The nature and extent of the assistance afforded by CRH

In addition to providing Mr Traynor with an office that enabled him to carry out his other
activities, including his interests in offshore banking, CRH provided other facilities to
Mr Traynor. His long time secretary in Guinness and Mahon, Ms. Joan Williams,
became an employee of CRH.

15.4 Mr Traynor's use of CRH employees for Ansbacher business

As an employee of CRH, Ms Williams became an important functionary of the
Ansbacher business, enjoying a significant level of delegated authority to conduct its
affairs. Mr Traynor also made use of the services of other CRH employees for the
purpose of carrying on the Ansbacher business. In particular, he made use of the services
of the caretaker of 42 Fitzwilliam Square and the driver provided to him by CRH.

15.5 42 Fitzwilliam Square

The office provided by CRH to Mr Traynor became the centre of the Ansbacher business
in Ireland. As will be detailed below, much of the ordinary routine of banking occurred
at these offices. A striking feature of this routine activity is that little attempt was made
to conceal it from persons not directly involved. To better understand the transparency of
this activity, it is worth saying something of the layout of the offices at 42 Fitzwilliam
Square. The offices were in a Georgian building. The front door worked on a monitor,
which could be operated by a number of people in the building. At ground floor level
was a reception area and a room occasionally occupied by the caretaker of the premises.
The Chairman's office was on the first floor. Adjacent to his office was an office
occupied by his secretary, Ms Joan Williams, and the secretary to the Company Secretary
('the other secretary'). There was also a boardroom on the premises. The upper floors
housed the company's secretarial department, its registry and the insurance departments.
15.6 Incoming post for Ansbacher
The day-to-day routine of the office was unexceptional. Typically, the caretaker would
open the premises at approximately 7.45 am. Mr Traynor was usually one of the first to
arrive thereafter. The incoming post for the office would arrive some time between 9.00
a.m. and 10.00 am. The caretaker would usually sort the post and leave it in bundles on a
table in the hallway on the ground floor. The bundles were organised by reference to the
addressee of the letters. The caretaker confirmed to the Inspectors that letters addressed
to 'Guinness and Mahon' and 'Ansbacher' arrived at 42 Fitzwilliam Square but he
described the volume of the latter category of letters as very small. He knew that such
letters were for the attention of Mr Traynor. Such incoming post for Ansbacher appears
to have included bank statements from Guinness and Mahon. Thus, whilst the volume of
incoming post addressed to GMCT or Ansbacher might have been small no attempt was
made to treat it any differently from other incoming post and it was left on the table in the
hall where it might be seen by anyone passing.

15.7 Preparation of Ansbacher statements

The offices at Fitzwilliam Square were also used for the preparation of statements for
those clients who had memorandum accounts. The task was a cumbersome one. Mr
Traynor would have the statement bearing the GMCT or Ansbacher name and the code
number printed from a computer, which was situated in his office where Mr Collery
visited to maintain the records on it. Mr Traynor would use a ruler to tear off that portion
of the statement containing the GMCT/Ansbacher name and the code number. He would
then pass the remainder of the statement containing only a set of figures to Ms Williams
and would tell her the name of the person to whom the statement related. It was her job
then to ensure that each statement dealt with in this manner was sent ultimately to the
person to whom the statement related. She devised a system of attaching loose pieces of
paper to each statement with the name of the person to whom the statement related
written on the loose piece of paper. When putting the statement in an envelope she
removed the loose piece of paper. The statement was accompanied by nothing more than
a 'With Compliments' slip from Mr Traynor. The envelope was then addressed to the
person whose statement it contained and sent out with the ordinary CRH post. This
system of preparing statements for clients occurred on a three-monthly basis.

15.8 Lodgements to Ansbacher accounts

The CRH facilities were also used to enable clients make lodgements to their Ansbacher
accounts. The Inspectors have evidence of clients calling to 42 Fitzwilliam Square for
the purpose of giving Mr Traynor cheques with a view to having those cheques lodged
to their Ansbacher account. Mr Traynor would then entrust the cheque to Ms Williams
and request that she lodge the cheque to the GMCT or Ansbacher account at either
Guinness and Mahon or IIB, depending upon the period during which the lodgement
was being made. Lodgements to Guinness and Mahon were dealt somewhat less
formally than lodgements to IIB. Lodgements to Guinness and Mahon might be
accompanied merely by a 'With Compliments' slip bearing some handwritten note,
whereas lodgements to IIB were always accompanied by a covering letter typed by Ms
Williams. In the ordinary way either the caretaker or Mr Traynor's driver would be
asked to deliver the envelope or envelopes to either Guinness and Mahon or IIB.

15.9 Withdrawals from Ansbacher accounts

Withdrawals from the accounts were also effected making use of CRH facilities. Mr
Traynor would give the essential instructions to Ms Williams. He would inform her of
the amount of the withdrawal and the account from which it was to be debited. He
would tell her whether or not the withdrawal was to be in cash or by way of a cheque or
draft. If the withdrawal were to be by way of a cheque he would inform her as to the
payee of the cheque being either the account holder or some third party to whom the
account holder wished to make a payment. Ms Williams would then prepare a letter of
instruction to either Guinness and Mahon or IIB and a copy of that letter would go to Mr
Padraig Collery so as to ensure that Mr Collery knew to debit the memorandum account
of the individual client. The caretaker or Mr Traynor's driver would be asked to deliver
the letter of instruction. When either Guinness and Mahon or IIB had complied with the
instruction someone from the paying bank would telephone Ms Williams to inform her
that the instruction had been met and the draft, cheque or cash was available for
collection. An envelope would be left at Reception to be collected by the caretaker or
Mr Traynor's driver. This system of making withdrawals has been described to the
Inspectors as fairly regular and accordingly the caretaker and Mr Traynor's driver knew
to check at Reception on each occasion they went to the relevant bank to see if there was
anything for delivery back to CRH.

Cash withdrawals from IIB were a little more complex because IIB did not have a cash
facility. When cash was required the letter of instruction to IIB would request a cheque
payable to either Bank of Ireland or Kentford Securities - the name of the account that
was used for this purpose in Bank of Ireland. The cheque would then be lodged in Bank
of Ireland and the cash equivalent withdrawn. Once again either the caretaker or Mr
Traynor's driver would be asked to make the cash collection though on one or two
occasions Ms Williams herself collected cash from Bank of Ireland.

Withdrawals from the Ansbacher accounts were always brought back in the first
instance to the CRH offices. Cheques or drafts were either entrusted to Mr Traynor for
onward delivery to the clients, or delivered by the caretaker or Mr Traynor's driver or,
on some occasions, posted to clients. Some clients called to Mr Traynor at 42
Fitzwilliam Square to pick up their withdrawals.

When the withdrawals were in the form of cash Ms Williams would usually take the
precaution of counting the cash. This she would do at her desk and there was no secrecy
attaching to the task. The other secretary who shared an office with Ms Williams
remarked upon her performing this task and was quite clear in her own mind that this
activity had nothing whatsoever to do with CRH's business but was related to Mr
Traynor's other interests. Cash withdrawals were either collected by the client at
Fitzwilliam Square or delivered by the caretaker or Mr Traynor's driver to the client or the
person for whom the cash was intended. The caretaker 's recollection is that the cash
withdrawals usually ranged somewhere between IR£3,000 and IR£15,000 whilst Mr
Traynor's driver's recollection is that the cash withdrawals might be something in the
region of IR£4,000, IR£6,000 or IR£8,000. Both the caretaker and Mr Traynor's driver
recollect larger withdrawals. The caretaker recollects a withdrawal of approximately
IR£28,000/IR£30,000 whilst Mr Traynor's driver recollects a withdrawal which he
knew to be substantially larger than IR£8,000 by reason of the size of the box in which
the money was contained and because both Ms Williams and staff at Guinness and
Mahon requested that he take particular care.

15.10 Work of Mr Padraig Collery on CRH premises

Lodgements to and withdrawals from the various accounts had to be recorded for the
purposes of preparing balances and statements of account. Mr Collery would visit the
CRH premises for the purpose of preparing up to date balances. His visits were usually
after hours. He worked in Mr Traynor's room on a computer that had been installed
there specifically for this purpose. Up to date balances appear to have been produced in
this way on a monthly basis although, as indicated previously, statements of account
went to the clients only every three months. Mr Collery was known by other members of
the CRH staff to be using the chairman's office for purposes that had nothing to do with
CRH.

15.11 Work of Mr John Furze on CRH premises

Mr Furze (who, it will be recalled, was one of the Cayman based Ansbacher directors)
also made use of the CRH premises when he came to visit Ireland. He used the offices
for the purpose of preparing reconciliations between the records held in Cayman and the
records held in Dublin. It appears that he also saw some clients known to him in the
offices in Dublin. Mr Furze was known to the staff in 42 Fitzwilliam Square as a banker
from the Cayman Islands who was involved with Ansbacher. No attempt was made to
conceal from the staff in 42 Fitzwilliam Square the fact that a Cayman Islands banker
was making use of the CRH premises for the purpose of preparing reconciliations.

15.12 Ansbacher letterhead

The Inspectors have seen thousands of documents bearing the Ansbacher letterhead and
an annotation containing the words 'please reply to 42 Fitzwilliam Square'. The
annotation was actually affixed to the original of the documents by way of a label.
Letters of this nature were typed by Ms Williams and on occasion by the other secretary
in the CRH offices and sent out at Mr Traynor's request. Letters bearing the Hamilton
Ross letterhead and carrying a similar annotation were also dealt with in this fashion.
Thus, 42 Fitzwilliam Square was actually notified openly as being the premises at which
Ansbacher (Cayman) Limited and Hamilton Ross might be contacted.

15.13 Visits of Henry Ansbacher executives to 42 Fitzwilliam Square

It was not unusual for executives from Henry Ansbacher & Company to visit Mr
Traynor at 42 Fitzwilliam Square. Thus, at a time when there was some concern being
expressed in London regarding the Dublin accounts, Mr Kevin McAuliffe, an executive
from Henry Ansbacher & Company, visited Mr Traynor in May of 1992. He spent
approximately one hour examining the memorandum accounts on the computer at
Fitzwilliam Square. He reported that the bookkeeping system appeared to be
satisfactory and that earlier difficulties in reconciling the position with Cayman
appeared to have been alleviated by that time (see Appendix X(a)). Later, in October of
1992, Mr Richard Fenhalls and Mr Brian Lavelle of First National Bank of South Africa
met with Mr Traynor at 42 Fitzwilliam Square. Mr Collery also attended part of this
meeting. This meeting was referred to in Chapter 12 (see Appendix IX(g)). For present
purposes, it is sufficient to note that this important meeting regarding the Dublin
business and involving high ranking executives from Henry Ansbacher & Company and
the ultimate purchasers of the Ansbacher business took place at 42 Fitzwilliam Square.

15.14 After Mr Traynor's death

Even after Mr Traynor's death, a certain amount of Ansbacher business continued to be
transacted through 42 Fitzwilliam Square. Ms Williams continued to send out written
instructions, usually at the direction of Mr Collery. After Mr Traynor's death, both Mr
Furze and Mr Collery visited the premises at 42 Fitzwilliam Square. The computer and
an amount of Ansbacher related documentation was removed and this ended the
relationship between CRH and Ansbacher.
15.15 Knowing or unknowing assistance?
The Inspectors are satisfied that CRH did in fact assist Ansbacher in the carrying out of
its business in the manner described above. The question arises however as to whether or
not CRH may be said to have done so knowingly or unknowingly. The Inspectors have
already concluded that there is evidence tending to show that Ansbacher was guilty of the
criminal offence of carrying on unlicensed banking business within the State contrary to
Sections 7 and 58 of the Central Bank Act, 1971, as amended by Section 9 of the Central
Bank Act, 1989. If the Inspectors conclude that CRH knowingly assisted Ansbacher in
the carrying out of its business in Ireland then there would be evidence tending to show
that CRH was also guilty of the criminal offence of carrying on an unlicensed banking
business within the State by virtue of having aided and abetted Ansbacher to do so. One
who aids and abets, by virtue of Section 8 of the Accessories and Abettors Act, 1861 and
Section 7(1) of the Criminal Law Act, 1997 is to be treated as a principal offender. The
Inspectors will consider therefore the evidence suggestive of knowing assistance and the
evidence suggestive of unwitting assistance.

15.16 The range and duration of the activities carried out on CRH premises
The Inspectors are struck by the range of activities carried out on CRH premises and
making use of the CRH facilities. Mr Traynor's activities bore all the hallmarks of
banking and he carried out these activities in CRH for almost six years. The range and
duration of the activities is suggestive, but no more than that, of the idea that CRH was
actually aware of Mr Traynor's conduct.

15.17 Transparency of conduct of Ansbacher business at 42 Fitzwilliam Square

The Ansbacher activities at 42 Fitzwilliam Square making use of CRH facilities and CRH
staff were open and transparent. The caretaker confirmed to the Inspectors that there was
no secret about what he was doing and no one asked him not to say anything about his
activities. Similarly, Mr Traynor's driver told the Inspectors that there was nothing
hidden in relation to his activities. Of course, the fact that Ansbacher was carrying on
business in Ireland from the CRH premises at 42 Fitzwilliam Square was well known to
those with whom it regularly did business, including in particular Guinness and Mahon,
IIB and Bank of Ireland. The fact that Mr Traynor had influence over the funds of
private clients and could be contacted in that regard at the premises of CRH appears to
have been known to persons in the business community. Thus, Mr Ray McLoughlin
told the Inspectors that when seeking support for a rights issue in James Crean plc it
became known to himself and his advisors that Mr Traynor and his clients might be able
to assist. Mr McLoughlin made contact with Mr Traynor seeking his support and that of
his clients and indeed Mr Traynor offered Mr McLoughlin a positive response. They
met to discuss this issue at the CRH premises at Fitzwilliam Square.

The transparency of the activities taken with the range and duration of the activities is a
further indication that CRH was actually aware of what Mr Traynor was doing at 42
Fitzwilliam Square.

15.18 CRH directors as clients of Ansbacher

As appears in Chapter 23, the Inspectors have concluded that eight directors of CRH
were, in their personal capacities, clients of GMCT/Ansbacher. This is of some
significance when considering the knowledge of CRH, as a corporate entity, of the
activities of Ansbacher in Ireland. The eight directors are:

1. Mr Anthony Barry;
2. Mr James Culliton;
3. Mr Michael Dargan;
4. Mr Gerald Hickey;
5. Mr Diarmuid Quirke;
6. Mr Desmond Traynor;
7. Mr Robert Willis;
8. Mr Richard Wood.
Given that they held the senior executive functions within the company in the relevant
period, it is important to say something of the circumstances surrounding the relationship
of Mr Culliton and Mr Barry with GMCT/Ansbacher.

15.19 Mr James Culliton

Mr Culliton was appointed Chief Executive of CRH in July 1974. He joined the board of
CRH at that time and came in contact with Mr Traynor. He retired as Chief Executive in
1987 - the same year that Mr Traynor became Chairman. Mr Culliton's stewardship of
the group is associated with its outstanding success. Some time in 1979, Mr Traynor
suggested an offshore banking facility to Mr Culliton. Mr Culliton believes that he may
himself have prompted this suggestion by referring to the very high rate of taxes at that
time. Mr Traynor told Mr Culliton that he could place money for him in a demand
account, that the deposit would have a variable rate of interest and that the interest would
be paid gross. It was made quite clear to Mr Culliton that the arrangement was to be
secretive. He got no application form to sign, no documents whatsoever were produced
to him, no statements were given to him and there was no reference to fees or
commissions. Mr Culliton terminated the facility some time in 1987 around the time of
his retirement as chief executive. Mr Culliton made an arrangement with the Revenue
Commissioners arising from these dealings. After his retirement, Mr Culliton remained a
non-executive director of CRH until 1994.

15.20 Mr Anthony Barry

Mr Barry succeeded Mr Culliton as Chief Executive of CRH. His tenure of that position
coincided broadly with Mr Traynor's chairmanship. He succeeded Mr Traynor as
Chairman. Some time in 1989, knowing of Mr Traynor's background in banking, Mr
Barry initiated a discussion with Mr Traynor in which he explained that he was in receipt
of certain monies by way of expenses and that he wished to get these monies to children
who were living abroad. This conversation probably took place in 42 Fitzwilliam Square.
Mr Traynor suggested making use of the offshore facilities available to him. From time
to time Mr Barry gave cheques to Mr Traynor for lodgement to his account. He would
either send them through the internal mailing system marked for the personal attention of
Mr Traynor or would deliver them to him personally on one of his regular visits to
Fitzwilliam Square. Mr Barry gave instructions in relation to a small number of
withdrawals to Mr Traynor personally. He also received from Mr Traynor statements in
relation to his account. The statements were sent to him at his office in Belgard Road
from 42 Fitzwilliam Square. Mr Barry acknowledged that the features of his personal
relationship with Ansbacher bore the hallmarks of banking and that they took place
making use of the CRH premises and facilities.

It is apparent, therefore, that a number of directors of CRH including successive Chief

Executives availed of the private banking facilities being offered by Mr Traynor. So far
as Mr Culliton is concerned, the Inspectors are satisfied that Mr Traynor promoted his
offshore banking facility to Mr Culliton as being one which could assist Mr Culliton to
evade tax and that Mr Culliton was aware of Mr Traynor's intentions in this regard. Mr
Culliton, after his retirement as Chief Executive, remained a director of CRH during the
period when Mr Traynor was Chairman of CRH. In Mr Barry's case, the actual banking
relationship with Mr Traynor existed during Mr Traynor's period as Chairman and the
service provided by Mr Traynor to Mr Barry involved the use of CRH facilities. The
banking relationship of the other directors was no less unorthodox. For example, Mr
Willis, himself a former Chairman of CRH, referring to statements of his account which
he received from Mr Traynor, was concerned that 'everything wasn 't quite kosher'. Mr
Willis' dealings with Mr Traynor were effected usually either on the way to CRH
meetings, immediately before the meetings or immediately after the meetings.

The fact that a significant number of directors of CRH, including successive Chief
Executives (Mr Culliton and Mr Barry), were themselves clients of Ansbacher and the
fact that some of them conducted their dealings with Mr Traynor making use of CRH
facilities or at least in a CRH context is a further suggestion of knowledge on the part of
CRH of the assistance it was providing to Mr Traynor and Ansbacher.
There is then a substantial body of evidence indicative of knowledge on the part of CRH
of the assistance it was providing to Ansbacher but there is also a body of evidence to the
contrary effect which the Inspectors must also consider.

15.21 The location of the Chairman's office

Mr Traynor's office at 42 Fitzwilliam Square was isolated from the main executive and
administrative centre of CRH's business which was located at Belgard Road, Clondalkin.
It is true that the chief executives of the company visited Mr Traynor on occasion at 42
Fitzwilliam Square and it is true also that a number of committee meetings were held in
the Board Room in 42 Fitzwilliam Square, but the main board meetings of the company
were held in Belgard Road and a significant number of the executives of the company
had no dealings with Mr Traynor whatsoever at 42 Fitzwilliam Square. This isolation of
Mr Traynor from the main executive and administrative centres of the CRH business is of
some significance when assessing the knowledge of CRH.

15.22 No knowledge of the CRH Board

The Inspectors have heard sworn testimony from a number of CRH directors past and
present. Each and every director of CRH who has given evidence to the Inspectors has
stated that the affairs of Ansbacher or indeed the private affairs of individual directors
who were clients of Ansbacher were never discussed at board meetings of CRH. The
Inspectors have no difficulty in accepting this evidence and indeed it is not surprising. It
would have been unusual for Mr Traynor to discuss these matters at a CRH Board
meeting and it would have been counter to everything that the Inspectors know of the
nature and character of the man. The Inspectors are satisfied therefore that knowledge of
Ansbacher's activities cannot be attributed to the Board of CRH per se.

15.23 No collective knowledge

Each of the directors of CRH who was a client of Ansbacher has denied knowledge of the
fact that any other director of CRH was also a client of Ansbacher. In each case, the
individual director gave evidence to the effect that they regarded Mr Traynor as effecting
a personal favour on his behalf. The Inspectors accept this evidence. Once again it is
consistent with the nature of the man that Mr Traynor for his part would not speak of the
affairs of any one director to another director and given the nature of their dealings with
Mr Traynor it is not surprising that each of the directors did not speak to others about
their own affairs. The Inspectors conclude therefore that there was no substantial body
of knowledge within CRH of what it was that Mr Traynor was doing but rather there
was piecemeal knowledge of his activities. It is notable also that some of the directors
who were clients of Ansbacher ceased to be clients before others became clients and/or
before Mr Traynor became Chairman of CRH and/or before Mr Traynor began using the
CRH facilities to conduct the Ansbacher business.

15.24 Absence of knowledge on the part of many

The Inspectors accept the evidence of those directors of CRH who said they knew
nothing whatsoever of Mr Traynor's activities. Mr Molloy described these directors as
being 'astonished' and 'genuinely dismayed' on learning of his activities. The
Inspectors also accept that the majority of the Board of Directors was at any one time
made up of individuals who knew nothing of the business that Mr Traynor was carrying
out from the CRH premises.

15.25 Trust in Mr Traynor

A number of the directors of CRH who gave evidence to the Inspectors spoke of the
trust which they had in Mr Traynor. Even those who had a banking relationship with
him spoke of his integrity and the confidence that they had in him. The Inspectors
accept that those directors who had no banking relationship with Mr Traynor were
entitled to have trust in him and were reasonable in assuming that he was at all times
discharging his duties as Chairman of CRH in a wholly proper and legal fashion.
However, the Inspectors do not accept that those directors who did have a banking
relationship with Mr Traynor were entitled to hold him in the same regard.

15.26 Conclusion
Having considered all of the relevant evidence and having regard to the relevant legal
principles concerning corporate knowledge the Inspectors conclude, on balance, that
CRH as a corporation cannot be said to have knowingly assisted in the carrying out of
Ansbacher's activities in Ireland. In coming to that conclusion, the Inspectors accept
that the knowledge of Ms Williams, the other secretary, the caretaker and Mr Traynor's
driver of the banking business carried on from 42 Fitzwilliam Square is not knowledge
which can be imputed to CRH, albeit that the Inspectors note the transparency with
which that activity was conducted. In the words of Lord Denning, those persons were
the 'hands to do the work' they were not 'the directing mind and will of the company'.4

Several of the directors of CRH who gave evidence to the Inspectors spoke of the pride
CRH takes in its systems of corporate governance. Whilst the Inspectors have
concluded that CRH cannot be said to have knowingly assisted the carrying out of the
Ansbacher business in Ireland, they cannot agree that in this matter the CRH systems of
corporate governance were deserving of pride. CRH must bear some responsibility for
the fact that the activities of Ansbacher continued for the period 1989 to 1994.

4 See the decision of Denning L J in HL Bolton (Engineering) Company Limited v. TJ Graham

& Sons Limited [1956] 1 QB 159.
 ASSISTANCE PROVIDED BY BANK OF IRELAND PRIVATE BANKING
LIMITED ('BOIPB')

INDEX

Page

16.1 Introducti on 191

16.2 Poinciana and Worldwide accounts 191

16.3 Ansbacher accounts 192

16.4 New Poinciana accounts 192

16.5 State of knowledge of Mr Moriarty 192

16.6 Conclusion 192

ASSISTANCE PROVIDED BY BANK OF IRELAND PRIVATE BANKING
LIMITED ('BOIPB')

16.1 Introduction
BOIPB's involvement with Ansbacher's Irish business began when, in early 1992, Mr
Traynor called to see Mr Michael Moriarty, the then Head of Private Banking, and
explained to him that he looked after investments for a number of individuals. He said
he had lodged funds in another bank, but that he wished to 'spread them around a bit',
and proposed opening some accounts in BOIPB.

16.2 Poinciana and Worldwide accounts

Accordingly, in May 1992, a call deposit account number 27711020 was opened in
BOIPB in the name of a Cayman company, Poinciana Fund Limited and a call deposit
account number 27712020 was opened in the name of a second Cayman company,
Worldwide Management and Consultancy Services Limited ('Worldwide'). Both were
non-resident accounts. An identical sum was transferred to both deposits from an
account in Ansbacher's name in IIB. The funds in both accounts were immediately
transferred to fixed deposit accounts for one month, number 27711300 in the case of
Poinciana, and number 27712300 in the case of Worldwide. The Inspectors interviewed
Mr Moriarty and Mr Andrew Brennan, the former Relationship Manager with BOIPB.
Mr Brennan and Mr Moriarty said that they were both aware at the time that these
companies held funds beneficially owned by other persons.

The Inspectors put it to Messrs Brennan and Moriarty that, in such a case, a bank should
not open a non-resident account without ascertaining the residential status of the
beneficial owners of the funds, but they did not accept this proposition. They said they
were satisfied that the companies themselves were non-resident, and that they were not
obliged to go further than that.
16.3 Ansbacher accounts
Upon maturity of the two deposits in July, the funds were transferred to two fixed
deposit accounts: Ansbacher Limited ref 353 Poinciana Fund Limited and Ansbacher
Limited ref 354 Worldwide Management and Consultancy Limited. In March 1993, both
deposits together with the interest that had accumulated on them were transferred to an
account in the name of Hamilton Ross in IIB.

16.4 New Poinciana accounts

In May 1993, two new call deposit accounts were opened in Poinciana's name in
BOIPB. One, a US$ account, was numbered 27711011, and the other, a STG account
was numbered 277110211. The funds in both were then transferred to fixed deposit
accounts - number 27711302 in relation to the US$ account.

In May 1994, shortly after the death of Mr Traynor, the sterling deposit was transferred
to an account in the name of Hamilton Ross in IIB, via the Royal Bank of Scotland on
the instructions of Joan Williams.

Again on Ms Williams' instructions, the US$ deposit continued to roll over from month
to month until, in 1995, she told the bank to deal in future with Mr Sam Field-Corbett in
relation to the account. Finally, in May 1997, halfway through the McCracken Tribunal,
the US$ account was closed on the instructions of John Furze and the funds were
transferred to Bank of America International, New York for the credit of Cayman
National Bank for the benefit of Western International Trust Company.

16.5 State of knowledge of Mr Moriarty

Mr Moriarty has told the Inspectors that he was aware that the Poinciana and Worldwide
accounts held funds belonging to other persons.

16.6 Conclusion
The Inspectors accept that the account documentation was in order in that the entities in
whose name the accounts were opened were non-resident. However, superimposed upon
this is the knowledge of BOIPB that clients of Mr Traynor beneficially owned the funds
in the accounts. In the circumstances where BOIPB was aware of this fact, and where
instructions in relation to the accounts were issued at all times by an Irish resident (Mr
Traynor himself) using notepaper with an Irish address, the Inspectors are of the view
that, given the potential DIRT implications, BOIPB ought to have questioned the
residential status of the beneficial owners. The Inspectors conclude that in failing to do
so BOIPB assisted Ansbacher (perhaps unwittingly) in concealing the fact that Irish
residents were the owners of the funds in the relevant accounts, and thus - again,
perhaps unwittingly - assisted Ansbacher to conduct Ansbacher's business so as to
defraud a creditor of Ansbacher's clients, namely, the Revenue Commissioners.
 INDEX

Page
17.1 Introduction 196

17.2 The memorandum accounts 196

17.3 Development of Mr Collery's role 197

17.4 Period to 1986 199

17.5 1986 to 1989 199

17.6 1989 to Death of Mr Traynor 204

17.7 Mr Collery's role in Hamilton Ross up to the death of Mr Traynor 206

17.8 Mr Collery's Ansbacher work after the death of Mr Traynor 208

17.9 Mr Collery's Hamilton Ross work after death of Mr Traynor 209

17.10 Payments to Mr Collery from Hamilton Ross 210

17.11 Level of control exercised by Mr Collery 211

 Page
17.12 Conclusions 212

17.13 Criminal offences 212

ASSISTANCE PROVIDED BY MR PADRAIG COLLERY

17.1 Introduction
Mr Padraig Collery has had a lengthy career in banking, commencing with his first
employment in Lloyds Bank in London in 1968. From 1974 to 1989, he was a senior
official in Guinness and Mahon with responsibility for accounts and computer operations.
He is currently employed in a firm servicing the banking system, but not as a banker.

In 1976, he succeeded Mr Ru Leonard in the maintenance of the so-called 'memorandum

accounts'. When Mr Traynor left Guinness and Mahon in 1986, Mr Collery continued to
operate the memorandum accounts, visiting Mr Traynor's office at night and at weekends
for this purpose. The location was, initially, in the special office provided for Mr Traynor
by Guinness and Mahon when he left that firm's employment, later it was in the Dublin
city centre office of CRH plc.

It is clear that the work of Mr Collery went through a number of phases during which his
role changed fundamentally. The Inspectors must assess each of these phases separately
and arrive at conclusions relating to the involvement of Mr Collery, which reflect his
degree of knowledge and/or control from time to time.

17.2 The memorandum accounts

Mr Collery was a young man with some business experience when first employed by
Guinness and Mahon. He developed a skill in computers, which brought him into contact
with the parallel accounting system developed within Guinness and Mahon for the
Ansbacher records, which became known as the memorandum accounts. These were
records of the beneficial owners of money held in accounts in Guinness and Mahon in the
name of Ansbacher (then GMCT). Detailed records were also held in Cayman of each
client's sub-balance making up the total sterling deposit. As Grand Cayman was far
distant in miles and time difference, however, the Irish records were essential tools in
providing up-to-date information for the management and disbursement of funds to clients
in Ireland. Further, the decision maker on the accounts was not in Cayman but in Dublin
- Mr Desmond Traynor. The accounts in Dublin became the point of Mr Traynor's
control of the funds, relegating the Cayman records to an out of date record to be up-dated
from time to time. Thus the posting of the memorandum accounts in Dublin was a vital
part of Mr Traynor's control mechanism.

17.3 Development of Mr Collery's role

A number of dates are important in appreciating the role of Mr Collery as it developed.

Pre-September 1984: GMCT was owned by Guinness and Mahon. Mr Traynor

was chairman of GMCT, vice-chairman of Guinness and Mahon and a board
member of Guinness Mahon London. Mr Collery was the employee of Guinness
and Mahon in charge of the memorandum accounts maintained in the Guinness
and Mahon office on a separate ledger.

September 1984: GMCT acquired from Guinness and Mahon by Guinness Mahon
London. No other change in operation.

May 1986: Mr Traynor resigned from board of Guinness and Mahon and Guinness
and Mahon London. He was set up in an office owned by Guinness and Mahon
and financed by Guinness Mahon London and Guinness and Mahon, so as to
continue the GMCT operation in Ireland. The use of the Guinness and Mahon
computer continued but with the difference that Mr Collery was now acting (in so
far as his Cayman work was concerned) under the control of a person (Mr
Traynor) no longer employed by Guinness and Mahon

May 1987: Mr Traynor was appointed chairman of CRH plc, supplied with an
office, and thereupon left the Guinness and Mahon premises. In late 1987, the
computer records for GMCT's Irish customers memorandum accounts were
moved to the CRH office. Mr Collery was given access to CRH premises to
update records. Mr Collery was still employed by Guinness and Mahon but
carried out his Cayman function separately from his other work.

From May to August 1988: A consortium consisting of Mr Desmond Traynor, Mr

John Furze, Mr John Collins and Mr Hugh Hart purchased GMCT from Guinness
Mahon & Co, and in August sold on 75% of the company to Henry Ansbacher Ltd.
For the first time, there was no connection between the Guinness Mahon Group
and the Cayman company. Mr Collery continued to do the memorandum
accounts.

1989: An Internal Audit Report within the Guinness Mahon Group raised various
issues concerning the Dublin deposits and memorandum accounts. Mr Collery's
role was highlighted.

Mr Collery resigned from Guinness and Mahon during 1989 in the midst of
discussions on the Internal Audit Report. After his departure, he continued to
update the memorandum accounts for Mr Traynor and Ansbacher.

1990-1: Ansbacher accounts were for the most part closed in Guinness and Mahon
during late 1990 and early 1991, and moved to IIB. The memorandum accounts
were among those moved. Mr Collery continued to provide the same service.

From September 1992: From this date, certain accounts in the name of Ansbacher
in IIB were re-designated Hamilton Ross. All memorandum accounts were in the
name of Hamilton Ross from January 1993. Mr Collery participated in the change.

May 1994: Mr Traynor died.

 Post May 1994: From the date of Mr Traynor's death, and for some years
thereafter, Mr Collery provided two different services, one to Ansbacher in respect
of its remaining clients, and one to Hamilton Ross in respect of its continuing
operation.

It appears to the Inspectors that the foregoing work can be further grouped into four
different periods :

- Up to the departure of Mr Traynor from Guinness and Mahon in 1986;

- From 1986 to Mr Collery's resignation from Guinness and Mahon in 1989;
- From 1989 to death of Mr Traynor in May 1994;
- After 1994.

17.4 Period to 1986

In the period up to the departure of Mr Traynor from the Guinness Mahon Group, Mr
Collery kept the memorandum accounts up to date internally on the Guinness and Mahon
computer. If he was receiving any payment for this, it was really in addition to his
Guinness and Mahon salary and not as an independent contractor. It is clear from the
records available to the Inspectors that he was acting at all times as a functionary of Mr
Traynor who was his chief executive. The Inspectors record no criticism of his role up to
that stage.

17.5 1986 to 1989

In the period after the departure of Mr Traynor from Guinness and Mahon, Mr Collery
provided a service to GMCT and to Mr Traynor, separate from his ordinary Guinness and
Mahon work. He also assumed a greater degree of control over the GMCT business
within Guinness and Mahon. His role at this time was the focus of an internal audit report
in 1989 produced by the internal audit department of the Guinness Mahon Group
in respect of systems within Guinness and Mahon.5 The following are the relevant
extracts from that report.:

'A matter of particular concern to us relates to the management and control of the
Ansbacher Cayman deposits, amounting to nearly IR£38m and constituting almost
35% of the bank's liabilities. These deposits are under the sole charge of the
Associate Director of the Bank [Mr. Collery] who also acts, in practice but not
officially, as a Dublin based representative of Ansbacher Limited and negotiates
the rates with G & M in that capacity.

The Associate Director additionally manages the related anonymous offshore

'customer' deposits, on behalf of Ansbacher, almost entirely on his own without
any evident accountability to the Board. In this respect too, he acts as a Dublin-
based agent of Ansbacher whilst being a full-time employee of G & M. This dual
role, which involves him in acting on behalf of both the parties to the transaction
with little internal check not only creates serious conflicts of interest but also
exposes the bank to unacceptable risks of fraud.

Ansbacher Limited, a company based in Grand Cayman, has deposited, by way of

call and fixed deposits, amounts equivalent to IR£38m with the bank ('Ansbacher
deposits'). These deposits equate to funds lodged on offshore call and fixed
deposit accounts with Ansbacher Limited ('customer deposits') by Dublin-based
customers.

The ledger accounting records of the customer deposits are maintained by the
bank on a 'bureau system' which shares the same hardware as, but is totally
independent of, the IBIS/38 system of G & M Dublin. Thus the Ansbacher

5 The Inspectors note that the 1989 audit report was produced one year after the sale of GMCT to the
Henry Ansbacher Group, and it reflects the fact that GMCT was no longer a sister company of Guinness and
Mahon.
(deposits held in the bank's computer system are represented by the customer
deposits held on the bureau system.

The bureau system is operated and controlled solely, on behalf of Ansbacher, by

the Associate Director, Operations (DPC) and no other senior official of the bank
has access to that system. Customer names are not held on the system but each
deposit is identified by a code. We understand that DPC is aware of their names.

DPC deals direct with the customers or their agents. He negotiates call/fixed
deposit interest rates with them. He also negotiates, on behalf of Ansbacher
Limited, with G & M dealers the rates payable on the Ansbacher deposits ensuring
that the total interest received by Ansbacher Limited agrees with the total interest
paid on the customer deposits. If the totals do not agree, adjusting entries are
passed in the bank's books by DPC. We understand that Ansbacher Limited is
remunerated by way of a fee of Vs% per annum calculated on the total deposits
although we have not seen any legal documentation to this effect.

DPC also receives and processes the payment instructions in respect of customer
deposits. The payments are in fact made from the Ansbacher deposits held in the
bank's books. Corresponding book-keeping entries debiting customer accounts,
which are technically offshore, are than made on the bureau system thus
maintaining the equation of Ansbacher deposits with the customer deposits.

In practice (but not officially), therefore, DPC acts as a Dublin-based agent of

Ansbacher Limited insofar as the management of customer and Ansbacher
deposits is concerned, although he is employed full-time by the bank. All
transactions relating to these deposits are initiated and processed by DPC. In
addition to negotiating with both the parties to the transactions, he raises
accounting entries and prepares input vouchers, deal slips, etc. for both the parties
(G & M and the customers of Ansbacher Limited). There is not internal check on
his activity.
It should also be noted that standard controls generally applicable within the bank
to call and fixed deposits are not applicable to Ansbacher deposits. For example,
with respect to money market deals done with Ansbacher Limited, DPC, not the
dealer, completes the deal slips; no counter party confirmations are received and
the bank's outgoing confirmations are sent not to Ansbacher Limited but to DPC.

As mentioned before, DPC together with certain agent(s) of the customers,

negotiates not only interest payable on the customer deposits but also interest
payable on the Ansbacher deposits. This together with the ability to initiate and
process payment instructions on the Ansbacher deposits with no effective internal
check constitutes a serious control weakness. For example, interest rate
negotiations could easily be manipulated so as to create a surplus of interest
credited to Ansbacher call deposit accounts over the average interest payable on
the corresponding customer call deposit accounts. As the function of maintenance
and operation of the deposits is vested in one person only, the surplus may easily
be misappropriated without detection because the equation of balances on
customer deposits with the Ansbacher deposit will be maintained.

It should be pointed out that we have neither detected nor do we have any reason
to believe that there has been any irregularity with respect to Ansbacher deposits.
However, as the customer deposits constitute records of Ansbacher Limited (and
not of G & M, Dublin) they have not been subject to our review. We have also not
reviewed the procedures involved in opening up new customer deposits, if any new
deposits are indeed taken. Further, we have not seen any mandate for the
operation of the Ansbacher deposits and customer deposits.

In our opinion, lack of internal control over this activity coupled with the fact that
the Ansbacher deposits constitute nearly 35% of the bank's liabilities expose the
bank to serious risks of loss and embarrassment. These risks together with the
 legal position of the bank vis a vis the maintenance of off-shore customer deposits
by a bank employee and on the bank's premises need to be evaluated by the
Board.'

A cursory reading of the internal report might give the impression that Mr Collery had a
central role at that stage. The following extracts exemplify this:

'The bureau system is operated and controlled solely, on behalf of Ansbacher, by

the Associate Director, Operations (DPC) and no other senior official of the bank
has access to that system. Customer names are not held on the system but each
deposit is identified by a code. We understand that DPC is aware of their names.'
and,
'DPC [Mr Collery] deals direct with customers or their agents'

The reality was different. Mr Traynor retained control over the operation. Mr Collery was
the functionary who facilitated it within Guinness and Mahon, but he was not the prime
mover. Again, as already noted, the audit report says:

'These deposits are under the sole charge of the Associate Director of the Bank
[Mr. Collery] who also acts, in practice but not officially, as a Dublin based
representative of Ansbacher Limited and negotiates the rates with G & M in that
capacity.'

In so far as the above extract identifies Mr Collery as the Dublin agent of Ansbacher, the
Inspectors reject it as incorrect. At that time, Mr Collery carried out the functions referred
to in the audit report in his capacity as an official of Guinness and Mahon, but in so far as
Ansbacher had a representative in Ireland at that stage, it was Mr Desmond Traynor.

Mr Collery was, of course, carrying out some functions for Ansbacher. He was keeping
the memorandum accounts up to date and was acting as in-house contact for Mr Traynor
within Guinness and Mahon. He was setting rates on behalf of Guinness and Mahon. He
was also used as a contact person within Guinness and Mahon for the Irish clients of
Ansbacher. The contacts he made at this time would prove useful when later he was
called upon to play a more central role. However, his work on behalf of Ansbacher was at
this time under the control and direction of Mr Traynor.

Mr Collery's position in the Ansbacher hierarchy at this time can be assessed by the level
of fees that he received in the year to end April 1989, that is twelve payments of STG£125
and four of STG£1000, totalling STG£5,500 (see extracts from his memorandum account
A/A30 at Appendix XI(a)). This level of fees should be compared with the very much
larger sums received by Mr Collery later and the US$ 60,000 cost of Mr Traynor to
Ansbacher in 1992 as disclosed in a memorandum of Richard Fenhalls dated 16
September 1992 (see Appendix XI(b)).

The Inspectors have formed the view that, up to the date of his resignation from Guinness
and Mahon in 1989, Mr Collery was acting at all times, in respect of his work for
GMCT/Ansbacher, under the direction of Mr Traynor, and was not in a position within the
GMCT/Ansbacher structure to affect its policy. Up to this point, the Inspectors' criticism
of his role as an Ansbacher operative or 'employee' is of a minor nature.

17.6 1989 to Death of Mr Traynor

When Mr Collery left Guinness and Mahon in 1989, the structure of the Ansbacher
business in Ireland had changed a great deal from the early days. From 1989 onwards,
neither Mr Traynor, Mr Collery nor Ms Williams worked for Guinness and Mahon. The
Ansbacher money was still on deposit in Guinness and Mahon, but only on a transitional
basis. Mr Traynor was operating out of his office in CRH and was the owner, together
with Messrs Furze, Collins and Hart, of 25% of the Cayman company, the remaining 75%
being owned by the Henry Ansbacher Group.

In 1989, Mr Collery began a new phase of his career with a company unrelated either to
Ansbacher or to Guinness and Mahon. However, his services were still required by Mr
Traynor and being no longer employed by Guinness and Mahon, he was in a much
stronger negotiating position. He agreed to continue to update the memorandum accounts
on a part-time basis, using Mr Traynor's office in CRH for the purpose. His fee was
increased to IR£875 per month - IR£10,500 per annum - by the transfer of two monthly
sums of IR£125 and IR£750 into his offshore account (see Appendix XI(a)). His
responsibilities were increased, or at least his participation in the offshore service became
more clearly identifiable because he no longer mixed a Guinness and Mahon and
Ansbacher role.

By the end of 1990, the period of retention of Ansbacher funds in the Guinness Mahon
Group, which had been agreed (expressly in respect of the London funds and indirectly in
respect of the Dublin funds) on the sale of the company to Henry Ansbacher, was expiring
and new accounts were opened in IIB to accept the transferred funds. Mr Collery
continued to operate the memorandum accounts but also moved into a more central role in
managing the Irish business. An internal IIB memo dated 22 November 1990 ends as
follows:

'He [Mr Traynor] told us that the details of these various activities were dealt with
by Padraig Collery ex Guinness and Mahon who now works part-time for Des
Traynor at his offices and the best way to proceed would be to discuss details with
him after we had come to some preliminary conclusions as to what we would like
to do. He would like us to revert to him directly in relation to the back-to-back
loans which we promised to do early next week.

Action
We are to consider his needs in how we can respond to them and arrange a
detailed meeting with Padraig Collery and phone Des Traynor about the back-to-
back loans.'

In the early days of 1991, instructions were issued to IIB about the new accounts. Two
examples of such documents, signed by Mr Collery, are included at Appendix XI(c).
Many of these communications were on Ansbacher notepaper with a Dublin address
superimposed. Mr Collery was the instrument by which many of the executive decisions
of Mr Traynor were executed.

In view of the information available to Mr Collery from his previous position in Guinness
and Mahon, the Inspectors have concluded that there is evidence tending to show that Mr
Collery was during this period assisting Ansbacher in:

(a) Carrying on an unlicensed banking business;

(b) Failing to furnish to the Registrar of companies the information required by
sections 352, 353, 355 and 357 of Part XI of the Companies Act, 1963
(c) Evading tax due on its own activities;
(d) Assisting others to evade tax

The extent to which this assistance was the moral responsibility of Mr Collery was still
limited to some extent in respect of some of the above wrongs. Mr Collery was working
under the direction of a strong personality, Mr Traynor, who had been, in one way or
another, his boss for nearly twenty years. Because he was continuing the work of
Ansbacher's memorandum accounts, that company's role in assisting the evasion of tax
should also have been plain to him even if he lacked any control over the operation. As he
was in secure employment elsewhere, he had one right, which he refused to exercise, the
right to refuse to participate. There is therefore at this time, in the opinion of the
Inspectors, evidence tending to show that he knowingly assisting Ansbacher to conduct its
affairs in this jurisdiction in such a manner as to defraud creditors (that is the Revenue
authorities) of other persons (those Ansbacher clients whose accounts he serviced).

17.7 Mr Collery's role in Hamilton Ross up to the death of Mr Traynor

The High Court order establishing this Inquiry instructs the Inspectors to report on related
matters. The Inspectors have concluded that the business of Hamilton Ross Limited, in so
far as it was a continuation of Ansbacher business, is such a related matter.
As related in Chapter 2, much of the Ansbacher business in IIB was transferred to
Hamilton Ross in 1992. With this transfer, Mr Collery's position changed yet again.

When the Hamilton Ross accounts were opened in 1992, Mr Collery was included as an
authorised signatory (see Appendix XI(d)). The overall control of the scheme continued
to rest with Mr Traynor, but Mr Collery's work went far beyond the maintenance of the
newly designated Hamilton Ross memorandum accounts. He knew that Hamilton Ross
had started business in Ireland for the first time. For a person of Mr Collery's experience
it should have been clear that Hamilton Ross, which he was assisting in its work, was
operating in Ireland as a bank (see the Inspectors' conclusions at Chapter 24). He should
also have known that it was operating without a licence. The process of applying for a
licence would have been so transparent that he could not have had any doubt that it was
not applied for. The suddenness with which accounts were changed from the name of
Ansbacher to that of Hamilton Ross was another pointer to the absence of a banking
licence. Further, as noted above, his work on the memorandum accounts should have
alerted him to his role in facilitating the evasion of tax. He should also have known that
the culture of secrecy surrounding Hamilton Ross's operations was such that proper
registration of the company under company law and tax legislation had not been
completed. The Inspectors are of the view that Mr Collery's knowledge at this stage was
complete, even if he lacked Mr Traynor's control over the operation. Once again he
refused to exercise his correct option in this matter, namely, the right to refuse to
participate. This was a realistic option as he had now independent primary employment.

The Inspectors have concluded that there is evidence tending to show that after Hamilton
Ross took over the memorandum accounts in late 1992/early 1993 Mr Collery:
(a) Knowingly assisted Hamilton Ross in its unlicensed banking activities in Ireland;
(b) Knowingly assisted Hamilton Ross in its breaches of sections 352, 353, 355 and
357 of Part XI of the Companies Act, 1963
(c) Knowingly assisted Hamilton Ross in evading tax due on its own activities;
 (d) knowingly assisted Hamilton Ross in carrying on business in this jurisdiction in
such a manner as to defraud creditors (that is, the Revenue authorities) of other
persons.

17.8 Mr Collery's Ansbacher work after the death of Mr Traynor

After Mr Traynor's death, a fundamental change occurred in Mr Collery's position. Mr
Traynor was a most secretive person, so his death created a big problem for both
Ansbacher and Hamilton Ross. At that time, both companies had Irish business,
Ansbacher looking after some large Irish clients and both Ansbacher and Hamilton Ross
providing a service to those covered by the memorandum accounts. On occasion, a client
could straddle both systems.

Ansbacher's witnesses have informed the Inspectors that they recruited Mr Collery to
provide them with a service in relation to their clients after Mr Traynor's demise. Mr
Collery confirms this. However, the parties do not appear to be in agreement on the
nature of the service Mr Collery provided. Mr Fraser Jennings who gave evidence on
behalf of Ansbacher confirmed that Ansbacher decided to establish a relationship with Mr
Collery after the death of Mr Traynor. He maintained that the work carried out by Mr
Collery on foot of this relationship consisted mostly of making introductions to the
existing Irish Ansbacher clients - five or six in all. Mr Jennings stated that to that end, Mr
Collery organised meetings both with clients and with intermediaries. His sole purpose,
according to Mr Jennings, was 'to maintain communications'.

Mr Collery has a different memory of his functions for Ansbacher after Mr Traynor's
death. He describes his Ansbacher work at that time as being to 'tidy up and wind up'. He
further describes it as mainly relating to Tristan Securities (a John Byrne Company) and
also as liasing with Cayman. He does not remember as many introductions as Mr
Jennings does at this time. The Inspectors are content to consider the matter of Mr
Collery's involvement on the basis of his version of the service provided where it
contradicts Mr Jennings recall. However, in addition to the above work, it is clear that Mr
Collery continued to process the remaining Ansbacher memorandum accounts.
Mr Collery received substantial payments from Ansbacher for his post-Traynor work.
Monthly payments of STG£750 were credited to his account up to January 1995. These
then stopped, but a final payment of STG£12,000 was received in April 1996.
Documents relating to Mr Collery's work at this time are not available to the Inspectors,
having either been destroyed or sent to Grand Cayman. Some letters were written from
42 Fitzwilliam Square in the name of Ansbacher after the death of Mr Traynor but the
level of correspondence would indicate that the Ansbacher business was reducing at that
stage. This process of reduction had commenced prior to Mr Traynor's death.

To the extent that Ansbacher continued to act illegally during this period, Mr Collery has a
residual responsibility. The Inspectors are mindful of the difficult circumstances created
by the death of Mr Traynor in this period of running down of the Ansbacher operation.
Mr Collery in this period, in view of his experience, was or ought have been fully aware of
all the wrongs of Ansbacher's Irish operation.

17.9 Mr Collery's Hamilton Ross work after death of Mr Traynor

No such mitigating circumstances can apply to the Hamilton Ross operation in the post-
Traynor period. Mr Collery provided an additional service after May 1994 to Hamilton
Ross. Hamilton Ross had taken over some of the Ansbacher memorandum accounts at
the end of 1992 or the start of 1993. The Hamilton Ross Irish operation had commenced
in late 1992. It developed rapidly. After Mr Traynor's death there was no attempt to
change or limit the service. The business carried on as usual in 42 Fitzwilliam Square and
subsequently in Winetavern Street, Dublin, using the Hamilton Ross name.

The Inspectors have concluded in Chapter 24 that there is evidence tending to show that,
in the period after the death of Mr Traynor, Hamilton Ross was :
 (a) Operating a bank without a licence;
(b) Breaching the provisions of sections 352, 353, 355 and 357 of Part XI of the
Companies Act, 1963 by failing to provide the Registrar of Companies with the
information required of foreign companies by those sections
(c) Conducting its business so as to defraud creditors of other persons;
(d) Failing to make proper tax returns and payments.

In what follows, the Inspectors consider whether Mr Collery participated in and/or assisted
in this wrongdoing, and if so, to what extent.

17.10 Payments to Mr Collery from Hamilton Ross

After the death of Mr Traynor, Mr Collery received substantial sums from Hamilton Ross.
These included the following sterling amounts (see Appendix XI(e)).

1. A sum of STG£176,101.67 on 28 February 1995

2. A sum of STG£35,000 on 25 April 1995
3. A sum of STG£55,000 on 30 April 1996.

The first sum represented the equal division with Mr Furze of a fee account in Hamilton
Ross undistributed at the date of Mr Traynor's death. In evidence, Mr Collery explained
these large payments as follows by way of reporting a conversation he had with Mr Furze:

'I had no interest nor could I accommodate people the way they - with the service
that Mr Traynor offered them because I was working on my own day job and I said
'You know you must get this and take it over yourself as quickly as possible but in
the meantime if you expect me to do it I will do it in the short term and you will pay
me substantial fees' and he did and these are - whatever fees were gathered in the
accounts then were split and you will see them coming in there: I think on three
occasions.'
17.11 Level of control exercised by Mr Collery
Another issue considered by the Inspectors was the extent to which Mr Collery exercised
control of the operation in that period. It was Mr Collery's understanding that Mr Furze
controlled Hamilton Ross after the death of Mr Traynor. It had been his earlier view that
Mr Traynor, when alive, was the owner and controller. The documentation available to
the Inspectors suggests that Hamilton Ross was initially owned by Mr Traynor but sold
after his death to Mr Furze at an unknown date and for an unknown sum. However, even
prior to its sale, Mr Furze controlled Hamilton Ross after the death of Mr Traynor under
the terms of the trust which owned the shares in the company. Mr Collery, therefore, is
correct in his belief that, after Mr Traynor's death, Mr Furze controlled Hamilton Ross at
all times, irrespective of ownership.

After Mr Traynor's death, the centre of operations of the Irish business of Hamilton Ross
moved to the premises of Mr Sam Field-Corbett at Inns Court, Winetavern Street. Mr
Collery told the Inspectors that he arranged the move. Much of the day-to-day work had
been done by Ms Williams prior to the move and thereafter by Mr Field Corbett himself.
Mr Collery, however, was from then on the person who controlled the operation in
Ireland. It would be incorrect to equate his role with Mr Traynor's earlier control, as Mr
Furze was the overall manager and decision maker. It is clear, however, that Mr Collery
was a vital link in Hamilton Ross retaining its business, and the level of fees earned by
him reflects that fact.

The Inspectors note the range and content of the correspondence emanating from the Inns
Court premises during 1994, 1995 and 1996. The significance of this correspondence is
dealt with in Chapter 24. The Inspectors have decided that this correspondence is a
significant pointer to the role of Mr Collery.
17.12 Conclusions
Having considered all of the foregoing facts, the Inspectors have concluded that Mr
Collery, as an experienced banker and businessman, must have been aware of the nature of
the business being carried on by Hamilton Ross.

The Inspectors are therefore satisfied that there is evidence tending to show that in the
period after the death of Mr Traynor Mr Collery knowingly assisted Hamilton Ross in:

(e) Operating a bank without a licence;

(f) Breaching the provisions of sections 352, 353, 355 and 357 of Part XI of the
Companies Act, 1963 by failing to provide the Registrar of Companies with the
information required of foreign companies by those sections
(g) Conducting its business so as to defraud creditors of other persons;
(h) Failing to make proper tax returns and payments.

17.13 Criminal offences

In Chapter 5, the Inspectors concluded that there was evidence tending to show that
Ansbacher may have committed the following criminal offences:

(a) The common law offence of conspiracy to defraud;

(b) The offence of knowingly aiding, abetting, assisting, inciting or inducing
another person to make or deliver knowingly or wilfully any incorrect
return, statements or accounts in connection with their tax contrary to the
appropriate tax legislation now consolidated in Sections 1056 and
1078(2) Taxes Consolidation Act, 1997.
The Inspectors are of the view that in the period from 1989 to 1995 there is evidence
tending to show that Mr Collery may also have committed these offences.
 CHAPTER 18

ASSISTANCE PROVIDED BY MS JOAN WILLIAMS

INDEX

Page
18.1 Introduction 215

18.2 Ms Williams in CRH 215

18.3 Ansbacher-related tasks carried out by Ms Williams 215

18.4 'Assistant Secretary' of Ansbacher? 216

18.5 Conclusion 217

18.1 Introduction
Ms Joan Williams was employed as Mr Desmond Traynor's personal secretary from
1972 until his death in 1994. During the time that Mr Traynor worked in Guinness and
Mahon, Ms Williams carried out her duties primarily in relation to Guinness and Mahon
business but combined this with a certain amount of GMCT work. The status of Mr
Traynor in carrying out his duties in Guinness and Mahon was never clear-cut and
certain work was undertaken by him in his dual capacity as a director of Guinness and
Mahon and of GMCT. Ms Williams would have taken a full and normal part in such
work.

18.2 Ms Williams in CRH

When Mr Traynor became chairman of CRH in 1987, Ms Williams too became an
employee of CRH, where she continued to act as Mr Traynor's secretary. She remained
an employee of CRH after Mr Traynor's death, retiring in 1999. Over the remaining
years of Mr Traynor's life, Ms Williams had a central role to play in the organisation of
his complicated business life.

It is clear from the evidence of Ms Williams that she acted as secretary for all the
business activities of Mr Traynor, including his activities in relation to
GMCT/Ansbacher. Between 1987 and 1994, the facilities of CRH (including the
services of Ms Williams) were used by Mr Traynor to conduct business on behalf of
GMCT/Ansbacher from CRH offices. The responsibility of CRH for this state of affairs
was considered in Part III of this Report.

18.3 Ansbacher-related tasks carried out by Ms Williams

During her time in the chairman's office, Ms Williams carried out many tasks that were
GMCT/Ansbacher related. These included the following:
• Checking balances on memorandum accounts in respect of clients of
GMCT/Ansbacher;

• Typing letters to banks on Ansbacher and Hamilton Ross notepaper;

• Sending out Ansbacher and Hamilton Ross statements (from which the bank's
name had been removed by Mr Traynor) to clients of Ansbacher and Hamilton
Ross;

• Lodging cheques sent in by customers to Ansbacher and Hamilton Ross

accounts;

• Arranging the withdrawal of funds for Ansbacher and Hamilton Ross clients on
Mr Traynor's instructions;

• Acting as signatory on bank accounts such as Kentford Securities used in the

Ansbacher and Hamilton Ross process;

• Fulfilling the role of authorised signatory for transactions with other banks such
as Kredietbank N V London;

• Facilitating the transfer of the Ansbacher and Hamilton Ross business to the
control of Mr Padraig Collery after the death of Mr Traynor.

18.4 'Assistant Secretary' of Ansbacher?

The Inspectors had the benefit of two interviews with Ms Williams relating to her role as
employee, and they considered all evidence relating to the level of her involvement.
Particular consideration was given to a description of her as 'Assistant Secretary' of
Ansbacher in two documents executed on 11 February 1993. These documents were a
guarantee to IIB and a letter of set-off relating to the same transaction. Normally such
actions would indicate a level of involvement far beyond that admitted in evidence by
Ms. Williams. In this case, however the Inspectors are satisfied that this status of
Assistant Secretary was inserted by the other co-signatory, Mr Desmond Traynor, to
give legitimacy and status to the guarantee he was executing with Ms Williams for and
on behalf of Ansbacher.

18.5 Conclusion
The Inspectors are satisfied that Ms. Williams was a truthful witness and any
discrepancies in her testimony are explained by a failure of memory related to the
passage of time. The Inspectors are satisfied, however, that a person of Ms Williams's
experience and education would over a period of time have acquired some level of
understanding that the Ansbacher scheme had a tax evasion dimension. However, her
position within the hierarchy of the firms in which she worked and the complicated
nature of the issues involved would have effectively rendered her powerless to oppose
Mr Traynor's course of action.
 INDEX

Page

19.1 Introduction 219

19.2 Services to Ansbacher clients 219

19.3 Hamilton Ross business operating from Mr Field-Corbett's premises 219

19.4 Mr Field-Corbett's role in Hamilton Ross 220

19.5 Conclusions 220

19.6 Possible criminal offence 221

19.7 Possible breach of the Companies Acts 221

19.1 Introduction
Mr Sam Field-Corbett was a close associate of Mr Desmond Traynor. Originally he
had worked with Mr Traynor in Haughey Boland Accountants. When speaking of
that time, Mr Field-Corbett describes himself as Mr Traynor's assistant. In 1973, he
left Haughey Boland and started his own business, Management Investment Services
Limited. He operated a bookkeeping service out of 3 Trinity Street, Dublin a
premises belonging to Guinness and Mahon. Thus, he retained close contact with Mr
Traynor and benefited from referrals from Guinness and Mahon.

19.2 Services to Ansbacher clients

Some of the persons to whom Mr Field-Corbett provided a service were Ansbacher
clients. Mr Field-Corbett accepted in evidence his involvement in a number of such
cases. He also accepted his involvement, with two other persons, in a loan, which
was backed by Ansbacher funds. This aspect of his involvement is dealt with in
Chapter 23. In general, Mr Field-Corbett was used by Mr Traynor as a facility to be
offered to clients who needed a point of contact between Mr Traynor and their
offshore funds. There is no evidence that he was a principal or exercised any primary
control over any offshore funds prior to Mr Traynor's death. He knew of the
Ansbacher scheme, but had no part to play in its control.

19.3 Hamilton Ross business operating from Mr Field-Corbett's premises

After Mr Traynor's death, it became necessary to find an office to relocate the
business of Hamilton Ross. This task fell to Mr Collery. Mr Field-Corbett made
office accommodation available to him at 8 Inns Quay, Winetavern Street, Dublin and
this was used by Hamilton Ross until 1997.
19.4 Mr Field-Corbett's role in Hamilton Ross
In addition, Mr Field-Corbett was installed as one of the signatories on the Hamilton
Ross account. From that time on, Mr Field-Corbett played a substantial part in the
Irish operation of Hamilton Ross, which, as described earlier, was a continuation of
the Ansbacher business in Ireland. The Inspectors conclude that, from that time on,
Mr Field-Corbett can be properly described as an agent of Hamilton Ross in Ireland.
Mr Field-Corbett sought in evidence to minimise his involvement and to place
responsibility for the operation on Mr Collery and Mr Furze. However, the Inspectors
note that Mr Field-Corbett was paid a sum of STG£ 35,000 by Mr Furze during the
course of his work for Hamilton Ross. This sum was in addition to his fees from his
long established offshore clients.

From an examination of the correspondence and from the evidence of Mr Collery, it

appears that Mr Field-Corbett's involvement was administrative rather then
managerial. It is clear that the control of the operation rested with Mr Furze as
regards offshore matters and with Mr Collery in Ireland. Mr Field-Corbett seems to
have facilitated the running of Hamilton Ross rather than controlled it. However, the
level of his involvement on a day-to-day basis was significant. All Hamilton Ross
letters written over a two to three year period, whether signed by Mr Collery or Mr
Field-Corbett, were produced in Mr Field-Corbett's office. Mr Field-Corbett also
became a signatory on the account called Darsley Nominees Limited which was used
to disburse payments from offshore funds to Hamilton Ross clients in Ireland

19.5 Conclusions
From the knowledge he had gleaned from his contact with Ansbacher clients, it must
have been clear to Mr Field-Corbett that Hamilton Ross was operating a banking
business from his premises and that his contribution was an important part of its work.

The Inspectors have concluded that Hamilton Ross is a 'related matter' on which the
Inspectors must report in accordance with the Order of the High Court (see Chapter
24). The Inspectors have further concluded in Chapter24 that there is evidence
tending to
show that Hamilton Ross operated an unlicensed banking business from 8 Inns Court
Winetavern Street, the premises supplied by Mr Field-Corbett. Mr Field-Corbett was
fully aware of the nature and scale of the operation carried out on his premises, even
if he did not have executive responsibility for it.

19.6 Possible criminal offence

The Inspectors have considered the level of Mr Field-Corbett's involvement and have
concluded that in supplying and continuing to supply a premises and back up service
to Hamilton Ross from 1994 to 1997 there is evidence tending to show that Mr Field-
Corbett may have committed a criminal offence, namely: acting in breach of Section 7
of the Central Bank Act, 1971 (as amended), by aiding and abetting in the manner
envisaged by Section 8 of the Accessories and Abettors Act, 1861 and/or Section 7(1)
of the Criminal Law Act, 1997, thereby rendering himself responsible as a principal
offender.

19.7 Possible breach of the Companies Acts

Mr Field-Corbett also permitted Hamilton Ross to operate out of his premises without
ensuring that the appropriate notifications were made as required by Part XI of the
Companies Act, 1963. In particular in the case of Mr Field-Corbett, the failure to
comply with Section 355(b) of the Companies Act, 1963 (the display of the
Company's name at its principal place of business in the State) was a matter for which
he had responsibility as an agent of Hamilton Ross.
 INDEX

Page
20.1 Introduction 224

20.2 Early Career 224

20.3 Consultancy business 225

20.4 Deposit monitoring service 226

20.5 Practical arrangements 229

20.6 Location of offshore accounts 231

20.7 Mr Stakelum's clients and the Ansbacher connection 231

20.8 Business Enterprises Limited and BEL Secretarial Limited 232

20.9 Move away from Guinness and Mahon 232

20.10 Conclusion regarding Mr Stakelum's assistance of Ansbacher 233

20.11 Conclusion regarding Mr Stakelum's services as a related matter 233

 Page
20.12 Criminal Offences 234
20.1 Introduction
Mr Jack Stakelum is a chartered accountant who, from 1975 until 1998, operated a number
of businesses in what might be described today as the financial advisory sector. In the
course of these businesses, Mr Stakelum acted as a financial intermediary between his
clients and Ansbacher's offshore deposit facility. He also acted as a non-executive director
to a substantial number of companies controlled by his clients.

The Inspectors considered the relationship between Ansbacher and Mr Stakelum, both in
the context of whether the latter's activities were of assistance to Ansbacher, and whether
these activities were a related matter within the meaning of clause 2(e) of the Order
appointing the Inspectors.

20.2 Early career

Mr Stakelum joined the then small accountancy practice of Haughey Boland in 1956 to
train as a chartered accountant. At that time, Messrs Charles Haughey and Harry Boland
were the two partners, and Mr Desmond Traynor was a recently qualified senior. Mr
Stakelum worked there until 1975, with an interval of four years from 1958 to 1962 during
which time he qualified with Kennedy Crowley. On his return to Haughey Boland as a
qualified senior, he worked very closely with Mr Traynor, who had become a partner. Mr
Traynor became involved with providing business advisory services to his larger clients,
leaving more of the audit managerial responsibilities to Mr Stakelum. One client of Mr
Traynor's was Guinness and Mahon, which he advised on property and taxation schemes.
Mr Stakelum became a partner in 1967 and started to take insolvency appointments.
When Mr Traynor left in 1969 to join Guinness and Mahon as joint managing director, Mr
Stakelum inherited many of his audit clients. He subsequently referred lending
opportunities to Guinness and Mahon. In 1975, he left Haughey Boland and by agreement
retained in the region of 43 insolvency cases, which he subsequently completed.

Mr Stakelum was a close personal friend of Mr Traynor with whom he discussed his
leaving of Haughey Boland. This friendship made him aware that Mr Traynor was involved
with a bank in Cayman that dealt with offshore deposits for Irish residents, and, Mr
Stakelum informed the Inspectors that he suspects that he was aware that discretionary
trusts were being established. He also knew that Messrs Collins and Furze were directors
of Ansbacher, then known as GMCT. Indeed, while still a partner in Haughey Boland in
the early 1970s, Mr Traynor had suggested to him a scheme (which was reported to him as
legitimate) for mitigating his tax liability which involved Mr Stakelum obtaining a loan
from Guinness and Mahon that was deposited offshore through an investment in an
offshore limited company. This was one of a category of early offshore 'suitably secured'
situations.

20.3 Consultancy business

While still with Haughey Boland, Mr Stakelum identified a market need which arose from
his receivership, liquidation and financial restructuring experience. Therefore, in
December 1975, he set up Business Enterprises Limited, a company through which he
offered a range of services until his retirement on 31 October 1998. These services
included financing proposals to banks, business projections, payroll production, and the
preparation of management accounts. In addition, (and this was of particular value to the
owner-managers of growing businesses), he was available to act as a sounding board on
operational issues, including the resolution of business difficulties. Advice of this kind
sometimes involves the sale or purchase of businesses, and the opportunity to act as a non-
executive director. In essence, Mr Stakelum's business became the dispensing of a
mixture of commercial and finance-raising advice.
20.4 Deposit monitoring service
At some stage shortly after he commenced business, Mr Stakelum was asked by some of
his clients to look after funds they were holding outside Ireland. He described the
arrangement thus (see transcript of Mr Stakelum's evidence of 8 November 2000 attached
at Appendix XII(a)):

'Q. Why would they want to place their funds with you?
A. They might be unhappy about monitoring the funds in the sense of what
interest rate ... (INTERJECTION).
Q. But you were not a bank?
A. No.
Q. They were asking your advice as to where to put the funds?
A. They were asking me whether I could monitor those funds on their behalf.
Q. Monitor is a word you use; I don't understand it. Your clients have funds
and they come into you. What do they ask you to do?
A. They would say 'We have funds offshore ' wherever they might have been
'Can you look after these funds for me.'
Q. 'Can you look after these funds.' What did that mean?
A. Would you endeavour to get the best interest rate. Would you monitor the
funds.
Q. Take it slowly. Would you endeavour to get the best interest rate. Were
they asking you to change where their funds were into some other financial
institution?
A. I don't think they would come in and say 'We have funds. Will you change
them for some other financial institution.' I think a discussion would have
arose with them that they would have advised me that they had £x in funds
and say 'Can you look after these funds on my behalf.'
Q. What does that mean?
A. It means that they might not want to correspond directly with whatever
foreign bank they were using. They might not want to get mail received
from foreign banks on the basis of monthly statements. They wouldn't
 feel that necessarily competent about looking at whether the funds should
be placed one month or three months or six months. And that they would
like me to look after those factors.
Q. What did you do then?
A. I would probably advise them at some stage that there would be facility
through Guinness and Mahon.
Q. You then contacted Guinness and Mahon?
A. Yes.
Q. You used the word 'facility'. What does that mean in this connection?
A. It means I probably would have contacted Des Traynor. I would have said
'I have a client - - for the most part he wouldn't know who my clients were -
- that wishes to have funds monitored abroad by me.'

This was a service he had not envisaged providing, and when he agreed to it, he required it
to be on a 'minimalist basis'. In a written submission to the Inspectors Mr Stakelum, who
described his role as that of being his clients' personal intermediary, set out the guidelines
he adopted:

• Funds would be deposited in licensed banks at rates of interest that would be

competitive and market related;
• All decisions in relation to these funds would be conveyed to him directly and
orally by the client concerned;
• He would undertake no advisory or management role in relation to these funds, he
merely monitored them;
• He would neither issue nor obtain receipts for movements in funds. Neither would
he keep any ledger records, issue statements or engage in correspondence;
• Information in relation to balances and rates of interest would be provided on an
oral basis only.
Initially, the client funds were abroad, and he made arrangements with Mr Traynor to
enable his clients to transfer their overseas funds through the banking system to, for
example, Guinness and Mahon's account in Guinness Mahon London for sterling deposits,
and Guinness Mahon & Co in New York for US dollar deposits, where they would be
given a coded reference. A reference number supplied by Mr Traynor identified the
ownership of the funds transferred to Guinness and Mahon. Thereafter, they would be
routed on to their final offshore banking destination by Mr Traynor.

The money deposited through Mr Traynor by Mr Stakelum was accounted for by Mr

Stakelum in what he described as 'hotchpotch' accounts and into this account he
accumulated all the funds given to him by his clients. To properly account for these funds,
he maintained a manual memorandum record for each client's money under his personal
control, and he performed a monthly reconciliation of the total of the memorandum records
with the sum of funds deposited with Guinness and Mahon and any float balances
(described below).

It became evident to Mr. Stakelum that other clients, who had funds available in Ireland for
deposit, could avail of the offshore arrangements. He explained to them that their monies
would be deposited in an offshore account associated with Guinness and Mahon. He did
not recommend the arrangement with Guinness and Mahon, but rather advised clients:

' Guinness Mahon have an offshore operation. That is the only place that I
can handle the funds through and it would be up to them [the clients] to decide
whether or not they transferred there. I wasn't aware of other options or
presenting them with options.' (see transcript of Mr Stakelum's evidence of 6
December 2000 attached at Appendix XII(b)).

In many ways, Mr Stakelum was acting in a capacity similar to what is now described as a
tied agent in that he only introduced his clients to a single destination for their deposits.
Since Mr Traynor and Guinness and Mahon did not know the names of the individuals
whose combined funds made up the total of the hotchpotch accounts, it follows that the
accounts were operated by Mr Traynor as being under the control and legal ownership of
Mr Stakelum. The beneficial ownership of the funds, according to Mr Stakelum, remained
pro rata with his individual clients.

20.5 Practical Arrangements

Once he decided to accept funds in Ireland, Mr Stakelum had to create a system for
handling receipts from and facilitating payments to clients. He did this by operating a
current account in an AIB branch in a business name entity, Business Enterprises (replaced
later by Clyde Enterprises), in which was maintained a float of funds. This account did
not attract interest, so the client monies did not earn interest while they remained in it.
When Mr Stakelum received an Irish pounds deposit he lodged it into the Clyde Enterprises
account where it was incorporated into the float until some other client wished to withdraw
money from the offshore deposit. The withdrawal was funded out of the float. The
practical effect of these arrangements was that small withdrawals were likely to be
available to clients quickly and without Mr Stakelum needing to contact Guinness and
Mahon. Quite obviously larger withdrawals would have needed funds from Ansbacher
through Mr Traynor.

Mr Stakelum's memorandum accounts had to keep track of these transactions. Prior to the
break with sterling in 1978, it was possible to transfer clients' funds abroad without any
difficulty. However, after that things changed (see Appendix XII(b)):

'If they wished to transfer Irish pounds abroad, I think at a stage, at an early stage,
there was no problems about that because I think the pound and the sterling were
one and the same and that there was no restriction on sterling so it could just be
mover abroad offshore. At a later stage that was a problem and the only way that
that could be done would be to supplant and replace funds. If somebody wanted to
take funds back from abroad and somebody wanted to put them out, you could do it
by journal entry.'
Sometimes his clients had to wait for their money to be moved out of the Clyde Enterprises
current account into the hotchpotch account. In Mr Stakelum's mind, this was a matter of
timing (see Appendix XII(b)):-

'A. I would be saying to the client, if and when I have an opportunity I will
transfer that abroad and when an opportunity presented itself where
somebody might ask for £6,000 in cash I would draw the £6,000 in cash.
Q. Out of the £10,000 that you had received?
A. Yes, and then do a journal entry for the abroad sums crediting one client
with the £6,000 and debiting the other subject to whatever the exchange rate
was etcetera.'

When asked why he did not keep his clients' float monies in a local deposit account, Mr
Stakelum replied that it would attract attention:

'Well the Revenue would be aware of it for a start off . . . . that there would
have been deposit interest earned and there would be returns of that made by the
banks at that stage.' (see Appendix XII(b)).

In keeping with the principles described earlier, Mr Stakelum never gave his clients written
information about where their money was on deposit, never gave them a receipt for their
money, and never obtained from them a receipt when he repaid their deposit. Everything
was done on trust. The effect of his operation of the hotchpotch accounts was that his
clients could withdraw their funds in Ireland, while new clients could effect offshore
deposits using Irish pounds.

The bulk of Mr Stakelum's clients operated through the hotchpotch accounts, with only a
few exceptions being those who decided to take out back-to-back loans from Guinness and
Mahon. In each of these cases, a proportion of the hotchpotch account was separated out
and placed in an individual deposit that was hypothecated against the loan
account. Mr Stakelum's arrangements with Mr Traynor also enabled his clients to switch
their funds between the sterling and US dollar hotchpotch accounts.

20.6 Location of Offshore Accounts

Throughout his oral and written evidence to the Inspectors, Mr Stakelum went to some
lengths to persuade them that he did not know the location of the offshore account. As far
as he was concerned, he merely gave the funds to Mr Traynor who moved them offshore.
The Inspectors, therefore, have had to draw their conclusion as to the offshore location on
the balance of probabilities. Several pieces of evidence point to an Ansbacher connection.
First, Mr Stakelum was asked in what offshore location the funds had been placed, and he
replied:

' All I know is that with Des Traynor I would have assumed Guinness Mahon
Cayman Trust, later Ansbacher. But it could well have been College Trustees or
Guinness and Mahon Guernsey.' (see Appendix XII(b)).

In Mr Stakelum's mind the choice was between Cayman and the Channel Islands.

20.7 Mr Stakelum's clients and the Ansbacher connection

In keeping with all the information he provided under the terms of a requirement by the
Inspectors on foot of Section 10(2) of the Companies Act, 1990, Mr Stakelum listed the
names of individuals who had entrusted him with the deposit of their funds. An
examination of the records of Guinness and Mahon and IIB in the 1990s contains many
letters of instruction from or on behalf of Mr Traynor for withdrawals from Ansbacher and
Hamilton Ross to the account of Clyde Enterprises. A number of these contain specific
references to individuals on Mr Stakelum's list.

Further evidence of the link with Ansbacher arises from one of Mr Stakelum's clients, Mr
Gerard Keane, who accepted advice from Mr Traynor in connection with the purchase of a
house for Mr Keane's use in Dublin. Mr Traynor utilised some of Mr Keane's offshore
deposit to fund a Channel Islands company to acquire the house. When, in due
course, Mr Keane purchased the house for himself using money borrowed from an Irish
bank, the funds used to pay for the property were given to Mr Traynor who deposited them
back into an Ansbacher account in IIB.

From this evidence, supported by other examples, the Inspectors conclude that, on the
balance of probabilities, the funds in Mr Stakelum's sterling and US dollar hotchpotch
accounts were deposited with Ansbacher.

20.8 Business Enterprises Limited and BEL Secretarial Limited

Mr Stakelum was the controlling shareholder of Business Enterprises Limited ('BEL') and
BEL Secretarial Limited ('BEL Sec'). There is a considerable degree of apparent overlap
in the records of Guinness and Mahon between BEL, BEL Sec and Clyde Enterprises, and
so for the purposes of this report the Inspectors have taken all three to represent the
common interest of Mr Stakelum.

An examination of the records of Guinness and Mahon and IIB in the 1990s shows that
they contain many letters from or on behalf of Mr Desmond Traynor with instructions to
withdraw sums from Ansbacher and Hamilton Ross accounts and to lodge them to the
accounts of BEL and BEL Sec.

According to a minute of a Guinness and Mahon lending committee dated 17 September

1976, BEL had a loan facility that was described as 'suitably secured'. As outlined in
Chapter 3, this phrase was used by Guinness and Mahon to describe loans backed by funds
deposited with one of its subsidiaries outside the jurisdiction. The Inspectors conclude that,
most likely, the backing security for the BEL loan was the hotchpotch deposit account.

20.9 Move away from Guinness and Mahon

In 1987, Mr Stakelum felt that Guinness and Mahon were not providing him with the kind
of service he had enjoyed previously, and also they were becoming expensive. This
resulted in his decision to open an account in Allied Irish Banks in Jersey. From 1988,
all funds of new clients were transferred to the new account while the funds of his earlier
clients were gradually withdrawn from Guinness and Mahon. The details of this operation
have not been investigated by the Inspectors on the basis that it is too remote from their
terms of reference.

20.10 Conclusion regarding Mr Stakelum's assistance of Ansbacher

What is very evident from the method of operation of Mr Stakelum's deposit-monitoring
service was his concern for secrecy, the minimal information he provided to his clients, the
fact that people took all of this on trust and, finally, the use of the Clyde Enterprises Irish
Pounds account as a conduit to the Ansbacher offshore account. In many respects, this
mirrored the characteristics of Mr Traynor's modus operandi, including the use of the
Amiens accounts in Guinness and Mahon to launder Irish pounds into sterling or other
currencies.

The Inspectors conclude that the aforementioned activities of Mr Stakelum constituted

assistance to Ansbacher in the carrying out of its Irish business. As Mr Stakelum's detailed
knowledge of Ansbacher's Irish business was sparse, the Inspectors are of the view that
such assistance was not knowing assistance.

20.11 Conclusion regarding Mr Stakelum's services as a related matter

For the reasons set out in this section of the report, including their close connection to
Ansbacher's Irish business, the Inspectors consider that the deposit taking and 'monitoring'
activities of Mr Stakelum were themselves matters in respect of which the Inspectors
should express a view, as being a related matter under their terms of reference.
Specifically, the Inspectors have based their conclusions on the following factual matters
arising from the evidence:

1) The finding that Mr Stakelum provided a deposit taking service;

2) The finding that the deposits were held offshore;
3) The finding that by Mr Stakelum provided a withdrawal service in Ireland;
 4) The finding that Mr Stakelum made use of a non-interest bearing account for the
purposes of hiding the business in question from the Revenue authorities,
5) The secrecy with which the service was carried out;
6) The experience of Mr Stakelum as a chartered accountant and business advisor.

The Inspectors have concluded as a related matter that there is evidence tending to show
that Mr Stakelum, acting through Clyde Enterprises:

(a) Carried out banking business in Ireland by facilitating the lodgement of

funds of Irish Residents to overseas accounts in Ansbacher.
(b) Provided a mechanism whereby Irish residents could withdraw their
offshore funds in Ireland.
(c) Carried out his business with intent to defraud creditors (that is, the Revenue
authorities) of the depositors.

20.12 Criminal Offences

The Inspectors have concluded that there is evidence tending to show that Mr. Stakelum, in
undertaking knowingly the deposit taking activities described above, may have committed
a number of criminal offences, as follows:

I. The common law offence of conspiracy to defraud.

II. The offence of knowingly aiding, abetting, assisting, inciting, or inducing another
person to make or deliver knowingly or wilfully any incorrect return, statement or
account in connection with their tax, contrary to the provisions of the relevant tax
legislation now consolidated in Sections 1056 and 1078(2) of the Taxes
Consolidation Act, 1997.
III. That in accepting deposits from, and effecting withdrawals on behalf of his clients,
Mr Stakelum may have carried on a banking business within the meaning of the
provisions of the Central Bank Acts, 1971
 and 1989 (see Chapter 5) and that he did so without the requisite licence.

These possible offences are being reported on both as a related matter and as being a matter
that has come to the knowledge of the Inspectors as a result of their investigation.
 CHAPTER 21

ASSISTANCE PROVIDED BY IIB

INDEX

Page
21.1 Introduction 238

21.2 First Contact between Ansbacher and IIB 23 9

21.3 Opening of accounts 241

21.4 Procedures concerning residency declarations 242

21.5 The evidence in relation to the accounts 243

21.6 Arrival of Hamilton Ross 244

21.7 Back-to-back loans 245

21.8 Loan structure 246

21.9 Security 246

21.10 Evidence and submission of IIB on the security clause 250

21.11 Location and Source of Funds for Lyndon Property Transaction 253
 Page
21.12 Doubts as to status of security 255

21.13 Request for re-designation as Trust Accounts 256

21.14 The involvement of Mr Sam Field-Corbett 258

21.15 Lodgements 259

21.16 Relative size of the Ansbacher activity 262

21.17 Knowledge within IIB 263

21.18 The evidence of IIB witnesses 264

21.19 Conclusions 264

CHAPTER 21

ASSISTANCE PROVIDED BY IIB

21.1 Introduction
From 1991 to 1996, IIB was the main bank in Ireland used by Ansbacher in the conduct
of its business. The Inspectors have decided that, during the period of the IIB
relationship, there is evidence tending to show that Ansbacher:

1. Carried on an unlicensed banking business in Ireland and/or;

2. Held itself out and/or represented itself as a bank or as carrying on banking
business; and
3. Carried on its business in this jurisdiction in such a manner as to defraud the
creditors (i.e. the Revenue authorities) of other persons.

In this chapter, the Inspectors describe and analyse the relationship between Ansbacher
and IIB and, in particular, the various services offered by IIB to Ansbacher. The
Inspectors are satisfied that the provision of these services may be said to be the
provision of assistance to Ansbacher, but, consistent with their approach to this part of
their investigation, they have considered whether that assistance may be said to have been
knowingly provided by IIB. In particular, the Inspectors have considered whether or not
IIB knew that accounts held with IIB in the name of Ansbacher were in truth trust
accounts holding monies for Irish residents. As appears from what is set out in the rest of
this chapter, there is a body of evidence from which it might be concluded that IIB was
actually aware of the trust nature of the accounts; but there is evidence also pointing to an
opposite conclusion. This chapter considers all of the relevant evidence.
21.2 First Contact between Ansbacher and IIB
It appears that the first contact between IIB and Ansbacher was initiated by Mr Richard
Fenhalls. He was at that time the Managing Director of Henry Ansbacher & Co London,
the parent company of the Ansbacher company in Cayman which is the subject of this
investigation. The first meeting at which business was discussed in detail between
Ansbacher and IIB is recorded in a file memo dated 22 November 1990 made by Mr
Liam Donlon, an executive director of IIB. It appears to be central to an understanding of
the later relationship. The complete memo and backing documentation is exhibited as
Appendix XIII(a). The following is a relevant extract:

'PMcE and the writer met with Des Traynor at his request. Inter alia Des
Traynor is chairman of CRH but this meeting was in connection with his
involvement in various trust companies, mainly Ansbacher Cayman Islands which
is now 75% owned by Richard Fenhalls.

Des outlined to us his interest in establishing a relationship with IIB for a number
of reasons:

(a) The main purpose would be to have a bank which would hold on a
continuous basis significant amounts of funds, mainly Sterling but also other
currencies as specified in a schedule given to us. The accounts which would need
to exist would have various requirements - again these are set out in the
schedule, including an indication of the likely number of transactions across the
account. They would expect to receive reasonable market rates and would get
quotes from time to time but not with a view to getting the best possible rate in the
market as long as they were getting a fair rate. He would like us to respond as to
what elements of his requirements we could meet.

He also has a need for back-to-back loans from time to time. As a sample of these
he gave us the accounts of a company called Lydon [sic] and a copy of a Facility
Letter they had been offeredfrom Ansbacher.
 He told us that the details of these various activities were dealt with by Padraig
Collery, ex Guinness and Mahon who now works part-time for Des Traynor at his
offices and that the best way to proceed would be to discuss details with him after
we had come to some preliminary conclusions as to what we would like to do. He
would like us to revert to himself directly in relation to the back-to-back loans,
which we promised to do early next week.

Action

We are to consider his needs in how we can respond to them and arrange a
detailed meeting with Padraig Collery and phone Des Traynor about the back-to-
back loans.'

A week later, a memo from Mr Donlon dated 29 November 1990 records on this matter:

'I spoke to Des Traynor following our previous meeting.'

I confirmed to him that we saw no problem in setting up the facility for Lyndon
Properties on the basis of a back-to-back loan of £2 million at a margin 1%. I
told him that we would envisage taking the deposit into Kredietbank London, as it
is required to be in another jurisdiction.

He was happy with that and asked that we should send him out the forms
necessary. He will have Sam Field-Corbett who looks after the affairs of this
company contact us in regard to details of the loan.

We should proceed to get credit approval for this transaction a.s.a.p. We also
need to agree a margin for KB London.
 I subsequently had a telephone call from Sam Field- Corbett. The facility is to be
on a three year basis with interest rolled up for that period (both on the deposit
and on the loan - although they are happy to pay the margin on a yearly basis).
A meeting has been arranged for Tuesday, 4th December at 10.00am. In the
meantime we are to process credit approval.'

21.3 Opening of accounts

As a result of the above contact, Mr Desmond Traynor wrote to IIB on 10 December
1990, on Ansbacher Limited notepaper (with a reply address, 42 Fitzwilliam Square
Dublin) enclosing application forms and other documentation necessary to open accounts
in the name of Ansbacher Limited and Overseas Nominees Limited. The accounts were
to be opened on 3 January 1991 with the transfer of STG£9 million. The following
accounts were opened quickly thereafter:

8 January 1991: Ansbacher account re A/A26 0548 Sterling call deposit

8 January 1991: Swiss Fr. Call Deposit Ref CHV 08/02166/81
4 January 1991: US$
4 January 1991: A$
4 January 1991: DM
4 January 1991: Swiss Franc
5 January 1991: US$186,716.80 Call Deposit ref BZ
5 January 1991: US$139,777.04 do. A/A44
5 January 1991: US$ 18,391.42.do. ref A/B46
5 January 1991: US$ 42.617.31 do. ref A/A39
5 January 1991: US$ 614.272.89 do ref A/G
5 January 1991: US$ 20,089.87 do ref C/BT
5 January 1991: US$ 211,063.48 do ref A/B special
5 January 1991: US$ 21,112.40 do ref A/A35

The eight US$ accounts opened on the 15 January 1991 outlined above were subdivisions
of one sum of US$1,254,041.21 sent to IIB on that day. Each of the subdivided sums
was put on deposit on the same terms for the one customer of IIB, that is Ansbacher. No
explanation has been given to the Inspectors as to why the money was so divided. The
Inspectors conclude that the different sums represented the interest of particular clients of
Ansbacher with the code denoting the hidden name of an individual client. The IIB
witnesses contend, however, that this explanation never occurred to them.

21.4 Procedures concerning residency declarations

The accounts were given different account numbers and notified by IIB to Ansbacher at
42 Fitzwilliam Square by letter dated 17 January 1991. Further accounts were later
opened as required. At the time the accounts were opened, the procedure followed by IIB
was based on its stated belief that the accounts were being opened by a non-resident bank
and not by individuals. Because it was believed that these were transactions involving a
bank, IIB formed the view that residency declarations were not necessary. In evidence,
IIB accepted that if Ansbacher had been acting in the capacity of a trustee rather than a
deposit owner, they (IIB) would have had to satisfy themselves as to the status of the
beneficial owners of the funds. This would be necessary, according to Mr Tony Barnes,
one of the Banks witnesses, to comply with the DIRT regulations. Another witness, Mr
Liam Donlon, goes further and suggests that the bank would have had to take a 'very
different approach' if they had received money on trust. The Inspectors note that, while
Ansbacher was a registered bank in the Cayman Islands, an equally important objective
in Ansbacher's Memorandum of Incorporation was its business as trustee. IIB point out,
however, that all banks carry on trustee business and that this is a normal part of a banks
business.

The number of accounts increased as the business developed. On 5 October 1992, five
DM accounts were opened under the Ansbacher name all on similar terms. These were
distinguished by use of the following codes, AC1, AC2, AC3, AC3A and AC5. The
Inspectors have not uncovered any explanation for this duplication of accounts, each with
the same depositor and terms, other than that each account represented the interest of
different parties who were clients of Ansbacher. The Inspectors accept the evidence
given by executives of IIB that such duplication may arise from time to time in inter-
banking transactions. This does not explain, however, the structured separation at the
time of their opening of these accounts and the subdivided US$ accounts mentioned
above.

21.5 The evidence in relation to the accounts

The evidence in relation to the accounts shows:
1. Accounts were opened by a director of Ansbacher based in Dublin.
2. Back-to-back arrangements were an integral part of the business.
3. Accounts were opened for very specific sums, using coded references for
identification purposes unique to that account, putting money on deposit on the
same terms and for the same length as other coded accounts. (It should be noted
that Mr Donlon gave evidence that he was not aware of these coded references).
4. The account holder was both a bank and a trust company located off shore.

On 12 June 2001, and again on 27 and 28 February 2002, Mr Donlon gave evidence on
behalf of IIB on the circumstances surrounding the opening of the accounts. A range of
services were requested by Mr Traynor at a meeting with IIB officials, and Mr Donlon set
these out in the note referred to earlier which he wrote following the meeting (see
Appendix XIII(a)). IIB has pointed out that some of the services requested were not
available through their bank, but, notwithstanding this restriction, the business was placed
with IIB. The selectivity of the service being offered is relied upon by IIB as support for
their view that this was ordinary business conducted in an ordinary way. Mr Donlon was
questioned before the Inspectors as to whether his suspicions should have been aroused
that the business was trust business (and therefore was possibly a vehicle for Irish
residents evading tax). Mr Donlons position is well represented by the following answer:
' ...As I said before, it never crossed my mind nor was there any reason in my
view that it should cross my mind that they would be trust money.'
In evidence, it emerged that Mr Donlon did not know of the coded nature of the
accounts. Mr Garrett Logan, then a relatively junior executive in Corporate Services, was
aware of the codes together with such persons as monitored his incoming post.

21.6 Arrival of Hamilton Ross

On 21 September 1992, Ansbacher instructed IIB as follows:

'amend your records to show the deposits listed below as being in the name of
Hamilton Ross Co. Limited. Maturity dates remain as fixed. '

There followed eight account numbers all in Sterling five of which had the same maturity
date. The instruction came under the signature of Mr Desmond Traynor from 42
Fitzwilliam Square. The background to this change from Ansbacher to Hamilton Ross is
described in Chapter 2 and Chapter 24.

This instruction gave rise to a new set of potential problems. As mentioned above, IIB
had decided that, as Ansbacher was a foreign licensed bank, it was not required to look
behind its lodgements, and could make the working assumption that the money in the
accounts it opened was owned by Ansbacher. Further, IIB had decided that a non-
residency declaration was not necessary, as it was dealing with another bank. From the
receipt of the instruction to open accounts for Hamilton Ross, new considerations should
have applied to those funds, as Hamilton Ross was not a bank but a company with
ordinary Objects. IIB recognised this change and correctly asked for a non-resident
declaration and for the Memorandum and Articles of Association of Hamilton Ross, but
did not enquire as to the beneficial ownership of the funds lodged by it. IIB has
maintained to the Inspectors that its knowledge was limited to the strict legal status of the
accounts, and that the possibility that Hamilton Ross and/or Ansbacher were abusing IIB
services had not occurred to them.
After 21 Sept 1992, Hamilton Ross operated many accounts in the same currency and
with identical maturity dates. The possibility that this company was operating accounts
as trustee was not considered by IIB, according to their evidence. On the basis of the
relevant officials evidence, the Inspectors accept that the correct banking practice would
have been that, if IIB suspected that the money was invested on trust, they should have
followed the procedure of seeking information on the true owners of the funds. If this
was the banks view as to what constituted good practice, its failure to take any action
arising out of the change of name on the accounts is surprising.

By September 1992, a body of evidence existed which pointed to the true nature of the
accounts of Ansbacher and Hamilton Ross. According to the evidence given to the
Inspectors, the indicators listed above together with the Hamilton Ross change did not
raise an issue in the mind of IIB as to the nature of their business. IIB officials at a senior
level did not consider these matters, therefore the accuracy of the documentation held
was not called into question. However, both at this time and later, the information
available within IIB on the nature of the business they were assisting was not limited to
the foregoing. Further examination of the method by which the accounts were operated
is instructive in this regard.

21.7 Back-to-back loans

Back-to-back loans were at the very centre of the business between the parties. The
memo of 22 November 1990, at the time of the first formal contact states:

' He also has a need for back-to-back loans from time to time. As a sample of
these he gave us the account of a company called Lyndon and a copy of a facility
letter they had been offered from Ansbacher'.

The first back-to-back loan to be processed was for Lyndon Properties, an unlimited Irish
company. A follow-up memo of 29 November 1990, from Mr Donlon mentioned that
the deposit for this loan would be located in Kredietbank London, 'as it is required to be
in another jurisdiction'. The Inspectors accept the evidence of IIB that this requirement
that the money be held abroad was IIB's requirement.

21.8 Loan structure

The structure used for establishing this loan is set out in a letter dated 9 May 1991 from
IIB to a firm of solicitors in UK, Cameron Markby Hewitt, as follows:

1. Irish Intercontinental Bank provides a GBP2million loan facility to Lyndon

Properties an Irish resident company. The terms of the loan facility are covered
in IIBs Facility Letter dated 28th January 1991,attached, and include a
requirement for ' such other security in such form as shall be required by IIB, at
its absolute discretion, from time to time'.
2. KB London guarantees IIB for the loan facility to Lyndon Properties -
Guarantee dated 27 February 1991.
3. Ansbacher Limited (a Cayman Island company) counter-indemnifies KB London
for the provision of its guarantee to IIB - Counter-Indemnity dated 27 February
1991
4. As security for the counter-indemnity, Ansbacher Limited places a deposit of
GBP2 million with Kredietbank London, which is secured by a mortgage
document - Mortgage on Monies dated 27 February 1991.

21.9 Security
The way in which security was recorded in the Lyndon case had similarities to the
manner in which security was dealt with in an earlier transfer of an Ansbacher depositor
from Guinness and Mahon to IIB. This earlier transfer was not organised by Mr Traynor
but was the result of an independent third party decision. The firm in question decided
in 1989 that it wished to change its Irish banker from Guinness and Mahon to IIB. In
the context of the Inspectors assessment of IIBs actions, its relevance is that the
application to borrow money on a back-to-back basis (the deposit was to end up in
London) created the same problem with regard to disclosure as surfaced later in the
context of Lyndon Properties and other IIB loans. In this first case, company X got a
letter of offer from IIB, which identified the security as a 'guarantee from a bank
acceptable to IIB'. The customer rejected this clause and an alternative form of words
was used indicating that the borrowing would be secured 'in a manner acceptable to IIB'
(see Appendix XIII(b)). This arrangement was concluded before Ansbacher and IIB
commenced doing business. The problem of properly describing back-to-back loans
would arise again in the case of Lyndon.

The security to be provided by Lyndon Properties for the facility was the subject of
negotiation between the parties. A letter dated 13 December 1990 to Mr Sam Field-
Corbett from IIB enclosed a copy of a draft facility letter. Unfortunately this letter is not
available, but its contents are described in a memo of 29 January 1991 from Ms. Siobhan
Lynch to Mr John Reynolds. She expressed the view that 'clause 5 of the draft letter set
out IIBs security requirement in more detail'. It is clear she was comparing this to the
actual clause in the facility letter dated 28 January 1991, which has the following clause
5:
'Any and all indebtedness or liability of the borrower to IIB is to be secured by
the guarantee of Mr Clayton Love and such other security in such form as shall
be required by IIB in its absolute discretion from time to time.'

This clause arose because Mr Desmond Traynor requested the deletion of the reference to
security in the facility letter. This request to delete all reference to security was refused.
An alternative to the omission of all reference to security was developed. The original
clause 5 was replaced by the above quoted term. The key element of the new clause was
that the back-to-back nature of the security was hidden behind a commitment to give IIB
'such security as it requiredfrom time to time'.

IIB suggests that the formula used was normal in the industry. This may be so in
circumstances where available security is expected to fluctuate from time to time. Use of
this form of words appears strange, however, in circumstances where a definite and
permanent money-based security had been agreed. It is clear that the purpose of not
setting out the full nature of the security was to avoid it coming to the attention of some
other party. IIB suggests that the parties to be kept in ignorance were not necessarily
Revenue authorities. This is a possible explanation but it is, at least, equally likely that
Revenue authorities were the object of the secrecy.

The fact that IIB appeared to conceal the true nature of the security appears to the
Inspectors to be an important matter when considering whether or not IIB might be said
to have knowingly assisted Ansbacher in carrying out its unlawful business in Ireland.
The initial evidence from IIB witnesses on this issue was somewhat unsatisfactory and
accordingly the Inspectors requested a considered position from IIB on this issue.
Ultimately, by letter of 9 November 2001, this was supplied as follows:

'Response of the Bank to the Inspectors request for clarification of the Security
Clause ordinarily included within offer letter issued by the Bank to borrowers
where guarantee was being provided by Ansbacher.'

1. The Inspectors query relates to the terms of the security clause ordinarily
included within an offer letter issued by the Bank to its customer where
Ansbacher was providing a guarantee for that facility supported by its
deposit. In particular, Mr. Rowan suggested that such a clause might be
misleading to the auditors of the borrowing company. Having regard to the
nature and purpose of the facility letter, as far as the Bank is concerned, this
clause is not misleading. Further, the question of whether a third party, such
as an auditor, would review and/or rely upon such an offer letter or any of its
clauses formed no part of the Banks consideration when drafting the clause in
question.

2. In order to properly respond to this issue, the Bank would like to clarify what
its understanding is with regard to the purpose of an offer offacility letter. In
 the Banks view, an offer letter is the document which sets out part of a
contractual position between a bank and its borrowing customer. So far as
the Bank is concerned, it has no other function and is not required to, or
intended to, have any other function.

3. For small personal loans, banks generally use standardised prescribed and in
some cases pre-printed formats. For larger facilities, facility letters will be
tailored for the individual transaction and will often be the subject of
negotiation and amendment between the bank and its client before a final
format is agreed and accepted. In the case of the Bank, as it was generally
involved in large scale lending transactions, facility letters were invariably
tailor made and the negotiation and amendment of facility letters was
common and not considered unusual by the officers of the Bank. That there is
no standard or prescribed format for facility letters is underscored by Lingard
who states 'the style of facility letters varies widely from bank to bank and is
often dictated by marketing considerations.' (J.R. Lingard, Banking Security
rd
Documents, 3 Edition Butterworth).

4. So far as a bank is concerned, it must ensure the combination of the facility

letter, the guarantees and the security documents is such that the banks
position is protected and provided the banks position is protected, and as
alluded to by J.R. Lingard, it is of little concern as to what is the wording of a
particular condition and whether particular conditions are met in a facility
letter or in some other contractual document.

5. The type of security clause used by the Bank in Ansbacher related lending was
commonly used by the Bank and other reputable Irish banks, particular in the
late 1980s/early 1990s. The particular clause was first used as regards to
Ansbacher in the case of Lyndon and was taken from a precedent agreement
drafted by Arthur Cox. The use of such a clause was in accordance with good
banking practice and is not and was never intended to be misleading.
 6. The Bank is not aware to what extent facility letters are (or were at the
relevant time) reviewed by the auditors to borrowing companies. However, in
drafting a security clause, the Bank was not conscious of how third parties,
including auditors, might interpret the clause. The Bank is not aware of any
instance where an auditor has contacted the Bank to seek clarification of the
wording of a facility letter either in the case ofAnsbacher or in relation to the
Banks business generally. So far as the Bank is aware, the only point of
contact for financial institutions with the auditors to borrowing companies is
through the specific audit request sent by the auditors to the borrowers bank,
the form of which has been prescribed by the Institute of Chartered
Accountants in Ireland and the Irish Banks Standing Committee and the
Northern Ireland Bankers Association. This document is explicit as to what
information is to be furnished and, in particular, how third party guarantees
are to be dealt with. Such an audit request is signed by the borrower and
amounts to a very specific authorisation from the borrower to its bank to
provide certain information to the borrowers auditor.

The Inspectors reject the contention that it could be assumed that third parties, such as an
auditor, would neither review and/or rely on an offer. This contention in the above letter
is immediately contradicted by other contents of the same letter. For example, at
paragraph number 2 above, the bank writes that the purpose of the facility letter is to
form part of the contract between the bank and its customer. In that capacity, it is a vital
document in the audit process, a fact well known to any senior bank official.

The Inspectors are convinced neither by the point that the clause in question was used by
the 'bank and other reputable Irish banks' nor by the status of the firm which drafted it.
The clause could be unexceptional in the proper context but not, in the Inspectors view,
in the way used by IIB in the absence of an acceptable explanation.

21.10 Evidence and submission of IIB on the security clause

The matter was further canvassed in later evidence and in submissions from IIB. The
following is a summary of IIBs evidence and submission 1

'The request made by Ansbacher in connection with the security clause in the
Lyndon facility was to remove the security clause altogether. The request was
made at a very early stage in IIBs relationship with Ansbacher and was made to
Mr Liam Donlon. Mr Donlon declined to remove the clause because it was to be
a secured facility but he requested Ms Siobhan Lynch to see if the client could be
otherwise facilitated.

She came up with a general security clause that did not make specific reference to
the actual security while at the same time making it clear that there was security.
This clause had been used many times in the past by IIB and many times since and
is not unusual in banking.

It may well be that the Inspectors may now view the Ansbacher request relating to
the security clause as suspicious in the light of information now available to them
about Ansbacher.

However it is submitted that it is unreasonable and unrealistic to suggest that IIB

personnel should, on the information available to them, have drawn ... any
adverse conclusions based on this request.

On the contrary the evidence establishes;

1. That it was common for people to negotiate clauses in draft facility letters
including security clauses
2. That it was normal for a bank to have a general security clause which did not
make reference to the specific security provided

1
This is extracted from the final submission document presented to the Inspectors on 20 March
2002.
 3. That the bank had in the past used such general clauses where specific
security had been agreed and provided.
4. That on receipt of the request by Mr Donlon he passed the matter over to Ms
Siobhan Lynch (who was the manager of the documentation unit in the bank
which was within Mr Donlons area of responsibility) to see if the request
could be accommodated and she came up with the general formula of words
that was in fact used.
5. That Mr Donlon did not have any interest in Mr Traynors reasons for
requesting the deletion of the security clause. His only concern was to protect
the banks position.
6. That the clause inserted in the Lyndon facility letter subsequent to Mr
Traynors request was a clause that had been used by IIB on many previous
occasions with other customers.
7. That the reason the general clause was used in the Lyndon case was to
facilitate a request from Mr Traynor.

The Inspectors have requested IIB to speculate as to the reasons why somebody might
wish to have no reference to a specific security in a facility letter. Various IIB
witnesses have suggested the following possible reasons.

1. The bank offering the guarantee might not wish the borrower to know that its
guarantee was cash backed by a cash deposit because it might adversely
reflect on the banks credit standing.
2. The bank offering the guarantee might wish to avail of the facility to
restructure the security backing the guarantee without the necessity to involve
the borrower or even let the borrower know of its internal arrangements
3. The bank offering the guarantee might wish to seek better terms from another
bank but might not wish to disclose to such other bank the precise security it
had agreed with the other bank
4. The borrower might not wish the management at certain levels within the
borrower to know of the cash backed nature of the guarantee as a form of
 management of financial discipline to ensure that management strove to
perform in an optimum fashion.
5. If the borrower had a number of facilities from different banks it might not
wish one bank to be aware of the exact security held by another bank with a
view to optimising its own negotiating position when seeking further facilities

It could of course be the case that a borrower might not wish to disclose the cash
back security if it was engaged in tax evasion and considered that the cash back
facility might in some way alert the Revenue Commissioners to such activity'.

The Inspectors have considered all of the evidence and submissions from IIB on this
issue. They conclude that the concealment of the true nature of the security was
motivated by a desire on the part of Ansbacher and Ansbacher's clients to conceal the
real position from Revenue authorities. They accept, however, that this may not have
occurred to IIB as being the motivation of Ansbacher and they accept, that IIBs primary
concern was to ensure the validity and effectiveness of its security.

21.11 Location and Source of Funds for Lyndon Property Transaction

As early as 29 November 1990, the wish of Ansbacher to have the back-to-back funds
located abroad was noted in the records of IIB. When the facility was put in place, this
was accomplished by the transfer of Ansbacher funds in the sum of STG£2 million from
IIB to a new account in Kredietbank in London. A loan cheque was then issued to
Lyndon (in Ansbacher's name) by IIB. Lyndon in turn lodged this cheque back to
Ansbacher.

Kredietbank London then apparently made a separate and matching deposit back to IIB.
The result was that a 'loan' was created in the books of Lyndon Properties, which could
be drawn down to, in effect, make available offshore money of Lyndon or Lyndon's
principal previously unavailable to it.
The circular nature of the movement of money can be seen from an examination of a
letter and schedule dated 25 February 1991, which gives final instructions to Ms Siobhan
Lynch, Manager Banking at IIB. The author of the documents is Mr Desmond Traynor.
The schedule sets out the system to be used for completing the drawdown. It provides:

1. 'J.D.T. to provide a letter dated Wednesday instructing IIB to transfer

Stg.£2million ex Ansbacher Limited Account No. 02/01087/81 to Kredietbank for
deposit to a new account in the Name of Ansbacher Limited.
2. IIB to issue a cheque payable to Ansbacher Limited and debited to Lyndon
Properties Loan Account. At the same time Sam Field-Corbett to issue a letter to
IIB authorising and requesting IIB to so issue the cheque.
3. Sam Field-Corbett will then pass to J.D.T. this cheque, which J.D.T. in turn will
lodge to Ansbacher Limited Call Account No.02/01087/81.'

The money used for the creation of the deposit in London came from an Ansbacher
account in Dublin. Similarly, all deposits used for back-to-back loans later completed
appear to have had their origin in Ansbacher's Irish deposits.

Part of the evidence of Mr Liam Donlon, on which IIB depends in addressing the
Inspectors concerns on this point, relates to the following question and answer in the
course of his evidence:

'Q. Did Mr Traynor indicate to you in the course of this conversation or at

any time that it was his intention that the money used to cash back in London
would be taken out of deposit, which were going to be made in Dublin?
A. No, he certainly never mentioned that and indeed I was not aware of it for
many years after that.'
It is clear, however, from the document referred to above that Ms Lynch, who was in a
managerial position, was fully aware of the source of the funds transferred to London. It
is a feature of Ansbacher's relationship with IIB that no one person in IIB acquired a
complete picture of the relationship between the parties. Rather, different people at
different levels within IIB were appraised of particular matters concerning Ansbacher.
Notwithstanding the established facts, IIB maintains that it failed at any level to recognise
that these transactions might suggest that the funds in question were really lodged by
Ansbacher in trust for specific people.

For the sake of completeness, two lists dated 22 July 1993 and 3 January 1996 are
attached at Appendix XIII(c). These show the range of back-to-back loans involving IIB
at each date. Three of the loans were based on cash deposits in London (like Lyndon
Properties), while in the remainder of cases the deposit was in Ireland with IIB in the
name of Ansbacher.

21.12 Doubts as to status of security

When the money was received in IIB in Dublin in 1991, there appears to have been no
concern as to its legal status. No query was raised, IIB having concluded that the new
deposits were money beneficially owned by another bank. This assumption continued on
and after the arrangement of the loans for Lyndon Properties, Carlisle Trust and Alstead
Securities, which involved deposits in London with Kredietbank backing loans in IIB.
However, doubts surfaced in 1991 relating to the status of the security and the letter to
Cameron Markby Hewitt a firm of solicitors in London, quoted above, sought legal
advice on the effectiveness of the security. The problem was not resolved for some time.
The legal advisers of other parties were also consulted. The ultimate legal advice was that
loans should be backed by funds lodged by Ansbacher not as owner but as trustee for the
beneficial owner. IIB fully participated in this process and on 24 June 1993 wrote to
Ansbacher explaining what had occurred in London concerning the trustee status of the
money lodged. At that stage, IIB knew that money previously held by them in the name
of Ansbacher and sent from their Ansbacher account to Kredietbank in London was of
such a status that it could be re-designated as trust money. The Inspectors raised this
point with IIB and received a detailed response. This is attached at Appendix XIII(d).

The Inspectors do not accept that it was ever possible from a practical operational
standpoint to make this change without the client knowing. If IIB did not tell the
borrower, it is extremely likely that the guarantor would so do. In fact, what happened
was that two companies were used which were the operating companies of the trusts
controlled by the Irish borrowers or their immediate families. The Inspectors questioned
Ms Lynch on the method by which funds could be legally transferred to another party
when they had been previously beneficially owned by the original depositor. Ms Lynch's
explanation that the transfer to the two new companies was merely an accounting
transaction is not convincing as an explanation. However, the Inspectors do not conclude
from the unconvincing nature of the explanation that Ms Lynch was actually aware of the
true status of the fund. Rather, they conclude that it ought to have occurred to those
familiar with this transaction, had they considered the issue, that the residual funds,
which remained on deposit in IIB and which were the source of the designated funds,
may have been initially deposited by Ansbacher on a trust basis.

21.13 Request for re-designation as Trust Accounts

The question of the possible trustee status of the Ansbacher deposits in Ireland was also
raised in a domestic context. On 5 June 1992, Mr Desmond Traynor wrote on Ansbacher
headed notepaper as follows:

'I would be grateful if this Deposit Account presently standing in the name of
Ansbacher Limited could be designated ' Ansbacher Limited in Trust re T. 7033'
and not included in any audit confirmations to Ansbacher.

I would be grateful if you would confirm that this is in order. If you have any
concerns I would appreciate if you could ring me.'
 2
This request related to a deposit securing a loan to Mr Ru Leonard. The request to re-
designate accounts must have been made a second time, as an internal memo of 12 June
1992, in further dealing with the above request, refers to this case and one other, S M
Morris Limited. The memo is exhibited at Appendix XIII(e). An examination of the
memo discloses both the account name and the account code, showing that the author
Claire Gannon was privy to the fact of the connection between code and account name.

IIB initially sought to point to the fact that it did not actually re-designate the accounts.
This reaction missed the reason for the importance the Inspectors attach to this
communication. The significance of this documentation does not lie in whether the
request was implemented but rather in indicating the evidence available to IIB of the true
status of the deposits and in indicating the actual state of knowledge of IIB in relation
thereto.

In its evidence to the Inspectors, IIB put considerable emphasis on its belief that the
purpose for which the request was made related to the desire of Mr Traynor to exclude
the funds from Ansbacher's balance sheet. The Inspectors accept that this was the likely
motivation; however, the reason it was requested is not the point of interest. The fact that
funds could be re-designated as trust funds by Ansbacher for its convenience indicates
the true nature of those funds.

Another IIB witness, Mr Paul Naessens said it was not appropriate to re-designate the
account as a trust account because Ansbacher beneficially owned the funds. He also said:
'I was certain of that really because of the overall background knowledge and
how the transaction was put together and the documents that Ansbacher signed
and so forth'

2
Notwithstanding this cash-backed loan, Mr Leonard has not been found to be a client of
Ansbacher, as the Inspectors are satisfied that his loan was backed by funds beneficially owned by a third
party.
Evidence was also given by Mr Naessens and others that the request was driven by a
desire to keep the fact of the back-to-back loans off Ansbacher's balance sheet and off
the balance sheet of its ultimate owners.

This aspect of the relationship between IIB and Ansbacher is the subject of a submission
by IIB which is exhibited at Appendix XIII(f). The suggestion of Mr Liam Donlon and
others that the request to change the name of an account from 'Ansbacher' to 'Ansbacher
in Trust re T.033' does not raise an inference that the money was deposited in trust is
rejected

21.14 The involvement of Mr Sam Field-Corbett

Other circumstances existed which may assist in assessing by inference the state of
knowledge of IIB on the true status of the deposits held by them under the name of
Ansbacher. Two such matters relate to the activities of Mr Sam Field-Corbett. One of
these relates to his personal involvement, the other to his role as a business adviser to
many of those who were active in business at this period.

In a personal capacity, Mr Field-Corbett, together with two others, applied to IIB for a
loan in the sum of IR£120,000 in November 1991. The purpose of the loan was to
purchase property in Dublin for letting. The application was the subject of a written
recommendation to the IIB credit committee. This document was signed by Mr John
Reynolds and approved by the credit committee under the signature of Mr Donlon and
another director. The executive summary with which the document concludes contains,
inter alia, the following paragraph:

'The proposal will be secured by a cash deposit being moneys entrusted to

Ansbacher Ltd by Mr Field-Corbett and as such, Messrs [name deleted] and
[name deleted] are not aware of the cash-backed arrangement and Mr Field-
Corbett has requested that the documentation be drafted on the basis of a normal
commercial rate say 3¥2% as opposed to the margin justified by the deposit ...
 While the transaction is small it is requested by Mr Field-Corbett who, with Des
Traynor, has been instrumental in placing substantial cash backed business with
us to date.' [Inspectors emphasis and deletions]

The loan was approved but, in accordance with IIB practice in Ansbacher related loans,
the facility letter did not have any reference to the backing deposit. When first
interviewed, neither Mr Reynolds nor Mr Donlon could give any explanation as to the
meaning to be attached to the words underlined above. In later evidence, Mr Reynolds
suggested that the reference was an error in drafting and that the true arrangement was
that Mr Field-Corbett had placed a deposit with Ansbacher in consequence of which
Ansbacher was now prepared to offer the guarantee. Mr Reynolds said it was not his
understanding that the money over which the lien would be given was the same money as
Mr Field-Corbett had deposited. The Inspectors conclude that Mr Reynolds is incorrect in
believing that the money over which the lien was to be given was not the same money as
that which had been deposited by Mr Field-Corbett. They accept, however, that that was
his honest belief.

In this case, the fact that Mr Field Corbett was the beneficial owner of certain funds used
for his back-to-back arrangement should have been clear to all IIB officials. These events
took place before the end of the first year of Ansbacher's deposits in IIB, but no
reappraisal of the operation took place as a result.

The second matter involving Mr Sam Field-Corbett relates not to his personal affairs but
to his business activity. In this regard, attention is focused on certain Ansbacher accounts
coded A/A26. Mr Field-Corbett was used by Mr Traynor as a conduit by which
information about these accounts was sent to Australia on a weekly basis. The ownership
of these accounts is unknown. The Inspectors have considered whether the nature of the
instructions given in relation these accounts should have alerted IIB as to the trust nature
of these accounts. The Inspectors are satisfied that no such inference arises.

21.15 Lodgements
The Inspectors have had the benefit of correspondence between the Central Bank of
Ireland and IIB in September 1997 and, thereafter, arising from the McCracken Tribunal
and dealing with matters relating to IIB's Ansbacher business. Copies of a Central Bank
letter of 8 September 1997 and IIB's reply dated 11 September 1997 are attached at
Appendix XIII(g).

The Central Bank letter includes the following extract:

'As an Authorised Dealer your bank was required to verify on the opening of such
accounts the residential status of the beneficial owner(s) of the accounts in
question. In addition it would appear that the instructions to open and operate
these accounts were received from Irish residents who also carried out
transactions across the relevant accounts.'

The reply of IIB included the following:

'In all cases, lodgements into the accounts were from off-shore sources.'

The Inspectors have examined the lodgement pattern to the accounts maintained in IIB
under the names of Ansbacher and Hamilton Ross. In particular, the Inspectors
considered lodgements to the main Ansbacher Call Deposit account 02/01087/81 and the
main Hamilton Ross Call Deposit account no 02/01354/81. Money arrived in these
accounts by a variety of methods. In the early part of 1991, funds were transferred from
Guinness and Mahon via the Royal Bank of Scotland. Later, funds from a number of
sources were lodged. The Inspectors have selected a number of lodgements as examples
of the methods and sources used.

The first example is a cheque in the sum of STG£9,000 payable to Anthony Barry on
behalf of Bluehill Investments Limited. The cheque was drawn on a bank in Guernsey.
The evidence of Mr Barry is that he gave this cheque to Mr Traynor to be lodged in an
account abroad. The money was received in Dublin and lodged in IIB through the
normal method used by IIB to handle sterling cheques. IIB indicated to the Inspectors
that, in this and other cases, it did not know of the tax status of the payee and submitted
that IIB was entitled to lodge this cheque in the normal way. This and other cheques
lodged have considerable significance in the context of whether Ansbacher was
unlawfully banking in Ireland and whether IIB was assisting in that operation. They also
have significance in assisting the Inspectors to decide whether IIB knew that the accounts
to which the lodgements were being made had the characteristics of trust accounts. IIB in
evidence submitted that they did not know from the face of the transaction that the funds
in question had a source (Mr Barry) within Ireland. Similar submissions were advanced
in respect of other lodgements, for example an Ulster Bank draft (College Green Dublin
Branch) to Ansbacher in the sum of STG £85,620.44, and an Allied Irish Bank draft
(Rathgar Branch) STG £455,500.00.

These submissions, even if accepted, do not cover other lodgements. An instruction in

IIBs files provides details of a sum of STG £735,178.60 from Ulster Bank Ltd Dublin
and shows the source as Clayton Love Distribution, which was a well-known Irish
company. The receipt of these funds might and perhaps should have alerted IIB to the
possibility that money was being received from Irish sources and that the Ansbacher
funds it held may have been trust funds.

Two other lodgements (of those examined by the Inspectors) might and perhaps should
have given rise to similar concerns. Money was lodged into Hamilton Ross via a cheque
(payee College Trustees & Co) from County Fair Foods Ltd in the sum of
IR£1,777,500.00. This money had an Irish source and the suggestion from IIB that it
might be from a non-resident IR£ account is not accepted. In April 1994, a Hamilton
Ross account was credited with the proceeds of an IR£211,000.00 cheque drawn on the
Irish account of Ballymadun Stud. In this case, the cheque had been made payable to IIB
itself.

By way of further example of the lodgement system (in this case relevant to the possible
operation of a bank in Ireland by Ansbacher), the Inspectors considered a transaction
involving a London based lady, Mrs Nora Shanahan. This was a £30,000 Bank of Ireland
sterling draft in the name of Mrs Shanahan. This was accepted by Mr Traynor in Dublin
and sent forward for lodgement to Ansbacher account 02/01087/81. It is clear that this
was a third party instrument accepted into Ansbacher's control in Ireland and lodged to
Ansbacher's account in Dublin. This is evidence of Ansbacher accepting funds in
Ireland, for which they needed a licence.

The foregoing are examples but, as pointed out by IIB, are not representative of the bulk
of the lodgements, which typically came from apparently external sources. However, Mr
Traynor, from his office at 42 Fitzwilliam Square, controlled lodgements to and
withdrawals from the accounts. Thousands of letters were dispatched from that address
under the Ansbacher notepaper with the Irish address super-imposed by a sticker. The
bulk of the correspondence of which the Inspectors are aware went to IIB. Ansbacher
was a name associated with banking and those in authority within IIB should not have
been in any doubt as to the significance of that name. The question may well be asked
what was Mr Traynor doing from 42 Fitzwilliam Square if he was neither banking or
holding himself out as a banker? The Inspectors do not accept the suggestion by IIB, that
Mr Traynor was acting in a manner consistent with being a local representative of a
foreign bank.

21.16 Relative size of the Ansbacher activity

The Inspectors are indebted to IIB for an analysis which puts the Ansbacher/Hamilton
Ross accounts into context. This analysis is attached at Appendix XIII(h), and reference
should be made to it for a fuller understanding of the matter. The following is a summary
of the main features:

Period 1991 to 1997

Number of Ansbacher credit entries 2215
Inter accounts transfers 1568
Number of lodgements 647
Average lodgements 1991-1993 129 per annum
Transfers and bank drafts from banks and third 443 value IR£87 million
parties 1991-1997
Of which 30 value IR£5.15 million
Irish Bank originated
Guinness and Mahon 32 value IR£9.57 million
Foreign Bank Originated 371 value IR£72.32 million

Withdrawals 1991 to 1997

Irish Currency Value IR£8 million
Foreign Currency Value IR£88.1 million

IIB has stressed to the Inspectors that the number of transactions should be seen in the
context of total credit entries in IIB at that time in the region of 40,000 per annum rising
to 50,000 per annum in the years 1991 to 1997.

The number of credit entries to the Ansbacher accounts is significant when answering in
the affirmative the question as to whether or not Ansbacher was conducting a banking
business in Ireland. However, the Inspectors acknowledge that, from an IIB perspective,
the level of Ansbacher activity was very small when compared with the general business
of IIB. This conclusion is of significance when considering whether IIB can be said to
have knowingly assisted Ansbacher. The Inspectors accept the general proposition that
in circumstances where the Ansbacher activity represented a small proportion of IIBs
business at any given time IIB was less likely to be fully cognisant of the true nature of
Ansbacher's business than it might have been had the Ansbacher activity represented a
greater proportion of its business.

21.17 Knowledge within IIB

If the Inspectors were to aggregate all of the evidence available to IIB and attribute
knowledge of that evidence to persons within IIB who could be said to represent the mind
and will of IIB, then the Inspectors would have little difficulty in concluding that IIB was
actually aware of the true nature of Ansbacher's business in Ireland and that therefore the
assistance which IIB provided to Ansbacher ought to be characterised as knowing
assistance. However, that is not the reality. In fact, knowledge of the information which
is described in this section of the Report was fragmented within IIB. Not once did the
Ansbacher business warrant mention at meetings of the Board of Directors of IIB.
Certainly, some information which might have prompted further questioning of the nature
of Ansbacher's business was available to executive directors and associate directors but
other significant information was available only to more junior people in the
organisation. The fragmented nature of this knowledge is not surprising given that the
Ansbacher business straddled both the lending side of banking and the deposit side of
banking. Furthermore, the fact that the Ansbacher business was relatively minor in
comparison with IIB's other business lends further credence to the proposition that no
person or persons within IIB who can be said to represent the directing mind and will of
IIB was actually aware of the true nature of Ansbacher's business.

21.18 The evidence of IIB witnesses

The Inspectors have considered and given considerable weight to the sworn evidence of
all those who testified on behalf of IIB. Without exception, they were assessed as
truthful and, except in one unimportant case, helpful. Without exception, they testified
that they did not know the nature of the operation being carried on by Ansbacher in
Ireland. It should also be said that the Inspectors have received considerable co-operation
from IIB in conducting this investigation. Many of the documents relevant to the issues
under investigation within the possession of IIB were released promptly and efficiently
when requested. IIB employees responded to requests from the Inspectors for further
assistance in a model manner. Given this assessment of IIB and its witnesses and given
the Inspectors assessment of the other evidence suggesting knowledge on the part of IIB,
the Inspectors must conclude that IIB was not actually aware of the true nature of the
Ansbacher activities in Ireland.

21.19 Conclusions
Having considered all of the relevant evidence and submissions and having regard to the
relevant legal principles regarding corporate knowledge, the Inspectors conclude as
follows:
1. The assistance rendered to Ansbacher by IIB was an essential part of the
Ansbacher operation in Ireland from 1991 to 1997. Without that assistance
Ansbacher could not have operated in that period in Ireland

2. There existed within IIB a substantial body of knowledge concerning the status of
the Ansbacher accounts (and the general business being conducted) which if
co-related would have alerted IIB to the possibility that Ansbacher was operating
as a bank (and/or holding itself out as a banker and/or holding itself out as
carrying out banking business) contrary to the Central Bank Act 1971 as amended
and/or conducting its business in such a manner as to assist some of its clients in
defrauding the Revenue authorities.

3. As a matter of fact, this knowledge within IIB was not concentrated in such a way
as to enable corporate knowledge to be imputed to IIB.

4. The Inspectors have concluded that they should report on the relationship between
IIB and Hamilton Ross as this represents a continuation of the Ansbacher
business. Such a report falls within paragraph (e) of the High Court Order of
22 September 1999 as a related matter. The Inspectors further conclude,
therefore, that from the time that Hamilton Ross was substituted as account
holder, the relationship between IIB and Hamilton Ross was a continuation of the
relationship between IIB and Ansbacher. In so far as it is necessary, the same
conclusions apply as those outlined above.
 PART V

THE CLIENTS OF ANSBACHER (CAYMAN) LIMITED

 IDENTIFICATION AND CATEGORISATION OF THE CLIENTS OF
ANSBACHER (CAYMAN) LIMITED

INDEX

Page
Caveat 269

22.1 The Inspectors' approach to the identification of the clients of Ansbacher 270

22.2 The question of the possible tax liabilities of clients 270

22.3 Definition of 'client' 271

22.4 'Fundless' clients 273

22.5 Excluded clients 273

22.6 Composition of client list 274

22.7 State of knowledge of Ansbacher clients 274

22.8 The various categories of clients 275

22.9 Persons who beneficially owned funds in Ansbacher (Category A). 275
 Page
22.10 Persons who were clients of Ansbacher through College Trustees
(Category B). 275

22.11 Persons who were clients of Ansbacher through Mr Jack Stakelum

(Category C). 277

22.12 Persons whose sole involvement was the establishment of Ansbacher

trusts to which they never transferred any assets (Category D). 277

22.13 Persons for whom Ansbacher conducted business other than the
holding of funds (Category E). 277
CAVEAT
It is important to bear in mind that a finding that any
particular individual is a client of Ansbacher, is NOT a finding
that that person has evaded tax. As will be seen further on,
persons who have been identified as clients did not
necessarily have deposits with Ansbacher. Some such
persons simply borrowed money from Ansbacher in the
ordinary course of business, a transaction giving rise to no
tax liability whatsoever. Others again established trusts to
which they never transferred any assets.
IDENTIFICATION AND CATEGORISATION OF THE CLIENTS OF
ANSBACHER (CAYMAN) LIMITED

22.1 The Inspectors' approach to the identification of the clients of Ansbacher

The High Court Order of 22 September 1999 appointing the Inspectors required them, at
paragraph (b) 'to identify as far as possible all of the parties who were ... clients of the
Company....' The Inspectors, mindful that their statutory duty was to examine the affairs
of Ansbacher, considered it necessary to seek the directions of the High Court in relation
to the true meaning and interpretation of the Order of 22 September 1999, in so far as it
might have been interpreted as directing the Inspectors to investigate and report upon the
clients of Ansbacher.

Accordingly, by application made to the High Court in camera on 13 March 2001, the
Inspectors sought directions pursuant to section 7(4) of the Companies Act, 1990. By
Order of the same date, Mr Justice Johnson directed that in discharging their obligations
to the High Court, the Inspectors were required to investigate and report upon the clients
of Ansbacher only in so far as was necessary to do so for the purpose of examining and
defining the nature and extent of Ansbacher's Irish business, for the purpose of
identifying the clients and for the purpose of examining the affairs of Ansbacher. A copy
of the Order of Mr Justice Johnson will be found at Appendix XIV(a).

22.2 The question of the possible tax liabilities of clients

By the date of the making of the Order of 13 March 2001, the Inspectors had already
interviewed a significant number of persons. Approximately half of those interviewed
readily admitted that they had availed of Ansbacher's services for the purposes of
evading their tax liabilities either in Ireland or elsewhere. Others, although unaware that
they were clients of Ansbacher, were aware that their funds were offshore, and admitted
that they had not disclosed the existence of their offshore funds to the Revenue
Commissioners.

The Inspectors are satisfied that it was necessary to investigate persons for the purpose of
confirming their identification as clients. They are satisfied that it was also necessary, in
order to gain an understanding of the nature and extent of Ansbacher's business, to
enquire whether clients had availed of Ansbacher's services for the purpose of evading
tax. However, by the date of the making of the Order of 13 March 2001, the Inspectors
were satisfied that they had a proper understanding of the nature and extent of the
business, and that any further investigation into the tax liabilities of individuals would be
superfluous.

Accordingly, with effect from 13 March 2001, the Inspectors ceased to make enquiries
about the tax liabilities of the persons they interviewed, directing their attention solely to
the question of whether such persons were or were not clients of Ansbacher.

For the purposes of this report, therefore, the only finding the Inspectors have made in
relation to the individuals examined is that they were clients of Ansbacher. It must be
borne in mind when reading the list of clients, that in relation to a considerable number of
persons, the Inspectors have made no enquiries as to their tax liabilities, and the
Inspectors do not know whether in fact certain persons on the list have any tax liability at
all.

22.3 Definition of 'client'

A second difficulty arose for the Inspectors in relation to the identification of clients -
namely, how should they define a client? The matter was complicated by the fact that,
frequently, the beneficial owner of funds in Ansbacher was protected by a company, or
more than one company, which was the legal or nominal owner of the funds. As related
elsewhere, the Inspectors are satisfied that the true client was the person in control of the
funds. They therefore decided to adopt a practical approach, and have defined a client as
follows:

'For the purposes of their investigation and having regard to the contents of the
Order of the High Court dated the 22 September 1999, the Inspectors consider a
person to be a 'client' of Ansbacher (Cayman) Limited ('the Company') within
the meaning of the Order if business was carried out for that person by the
Company in the State or, in the case of a person who is an Irish resident, if
business was carried out for him by the Company anywhere in the world.

In particular, but without prejudice to the generality of the foregoing, a client

shall include:

a) Any person who directly or indirectly maintains or has maintained all or part
of any account with the Company or who has or had de facto or de jure control
over all or part of any account with the company.

b) Any person who has or had de jure or de facto control of a body corporate
which directly or indirectly maintains or has maintained an account with the
Company or is or was administered by the Company or which has had
borrowings directly or indirectly secured wholly or partly by the Company.

c) The Settlor of any trust administered by the Company or of which the Company
is or was the trustee and/or any other person or persons who funded such a trust
or caused such a trust to be funded.

d) The Beneficiary of any trust administered by the Company or of which the

Company is or was the trustee in circumstances where the beneficiary has or had
de jure or de facto control over all or part of the trust funds.
 e) Any person who had an account relationship with a body corporate owned or
managed by the Company.

The expression 'account' shall include deposit accounts, loan accounts, securities
accounts and custodial accounts.'

22.4 'Fundless' clients

From the definition above, it will be clear that it was possible for a person to be a client
of Ansbacher without necessarily having placed any funds offshore. The Inspectors have
identified, among the clients of Ansbacher persons for whom Ansbacher transacted
business in the ordinary course of banking, such as by providing them with loans. Other
persons caused trusts to be created under Ansbacher's management, but never transferred
any funds to those trusts. The Inspectors have included such persons in their client list, on
the basis that they were persons for whom Ansbacher carried out business.

22.5 Excluded clients

The Inspectors have not included Irish persons who, although Ansbacher clients, are not
resident in Ireland, and for whom Ansbacher did not conduct business in Ireland. The
business carried out by Ansbacher for such persons does not come with in the meaning of
'Irish business' as defined in the High Court Order of 22 September 1999 (see Appendix

I(a)).

Certain other persons whose names might have been expected to appear in the list have
been omitted, and this requires some explanation. As explained later in this Report, not
all persons who had funds with College Trustees Limited fell within the remit of the
Inspectors, but only those whose funds, during the period 1981 - 1989, were lodged in an
account in Guinness and Mahon entitled GMCT re College Trustees. Neither did every
person whose loan was described by Guinness and Mahon as 'suitably secured' fall
within the Inspectors' remit. It became clear to the Inspectors during the course of their
investigation that this phrase was used by Guinness and Mahon to describe a loan backed
by a deposit with any of its subsidiaries outside the jurisdiction - including, for example,
its Belfast subsidiary.

Again, certain persons who have been named in various publications as being clients of
Ansbacher do not appear on the list. This is because the Inspectors, after careful
examination, have found that the evidence does not suggest that such persons were
clients of Ansbacher.

22.6 Composition of client list

The Inspectors had a further difficulty, arising from the fact that, due to the ruling of the
Cayman Court, they were unable to obtain a list of clients from Ansbacher itself. The
Inspectors' list of names has been put together from non-Ansbacher sources and therefore
is not complete. It is impossible to assess with total accuracy the number of names not
identified. All the information available to the Inspectors would suggest that the vast
majority of clients have been identified.

All those in respect of whom the Inspectors concluded that they were clients have been
contacted, except where no address was available. In the case of deceased persons, the
personal representative, legal adviser or nearest living relative has been informed, where
possible. The Inspectors sent each person a preliminary conclusion, which included the
evidence on which the conclusion was based. The person concerned or their
representative, was invited to make representations or adduce further evidence or cross-
examine witnesses, as appropriate. Where representations were received or new items of
evidence tendered, these were considered carefully before the Inspectors arrived at a final
conclusion.

22.7 State of knowledge of Ansbacher clients

Many persons have testified that they did not know that they were clients of Ansbacher
and this has occasionally been the subject of unfavourable media comment. However,
the pattern is so widespread and the truthfulness of the witnesses so apparent, that the
Inspectors have concluded that some persons who were depositors did not know that they
were clients of Ansbacher. It appears that in many cases the relationship between the
depositor and Mr Desmond Traynor was such that money was entrusted to him without
any formal paperwork and without any indication of its ultimate destination. The
persons, of course, by and large knew that the funds were going into an offshore account
but in many cases had never heard of Ansbacher or the Cayman Islands. Where clients
have asked the Inspectors to state that they (the clients) may not have been aware of the
location of their offshore funds, we have inserted such a comment in the text of the
findings about them. It is also clear that College Trustee depositors in Guernsey did not
realise that during a period of years in the 1980s their funds had been channelled through
Ansbacher.

22.8 The various categories of clients

The Inspectors have identified various categories of client of Ansbacher each of which
are considered separately in this chapter of the report. The following are the categories:

22.9 Persons who beneficially owned funds in Ansbacher (Category A).

This category includes persons who established trusts, and persons who deposited money
in a simple account. The persons who established trusts tended to be the larger clients. In
these cases, the trust would have a name which would not immediately identify the
beneficial owner of the funds. It also would have one or more companies, which would
be used by the trust as a vehicle for the investments controlled. The names of these
entities (usually Cayman companies) have not been included in the list of clients. The list
is confined to the principals involved rather than the corporate vehicles used, except in a
limited number of cases where the principals were not known. The inclusion of these
corporate entities would expand the list of clients to a number in excess of 300, but would
add nothing to the information contained in the Inspectors' more restricted list.

22.10 Persons who were clients of Ansbacher through College Trustees

(Category B).
In 1974, Guinness and Mahon had a number of old trusts in Dublin, which wished to
move residence offshore at that time in order to avoid Capital Gains Tax. There were also
in the region of thirty trusts established in the Channel Islands which did not have any
effective system of administration, the company which was to have administered them,
Guinness Mahon Channel Islands Limited ('GMCI'), having relinquished its banking
licence due to a review on cost grounds. A small number of old high asset Dublin trusts
related to the Guinness Family. Through a mutual acquaintance, Guinness and Mahon
came in contact with Mr John Lipscombe of Sovereign Management Ltd, Guernsey
('Sovereign'). As a result of this acquaintance, a subsidiary of GMCI, called College
Trustees Ltd. ('College') was established. This company rented space from Sovereign,
and contracted Sovereign to supply management services for the Trusts. College then
became Trustee of all the old Dublin trusts, of which there was something in the region of
six to ten.

Around 1976, Mr Traynor decided to change the accounting system in Guinness and
Mahon insofar as it related to the Channel Island subsidiaries. Up to that time, individual
deposits with the Channel Islands had appeared on the books of Guinness and Mahon in
their owners' names. These accounts were now coded, and appeared as 'Guinness Mahon
Channel Islands 'A', or 'B' ', etc. In 1978, the so-called 'bureau system' was introduced
into Guinness and Mahon in respect of its Cayman and Channel Islands accounts. The
individual deposits were amalgamated into pooled accounts, so that there was one pooled
account in the name of the Cayman operation, and one in that of the Channel Islands. The
underlying individual deposits were maintained in coded accounts on computer, but did
not appear on the books of Guinness and Mahon.

Around 1978 or 1979, Mr Lipscombe began to deal directly with the Irish clients of
College. There were about 50 clients at that time, and very few new clients appeared after
the end of the 1970s. The Channel Islands pooled account in Guinness and Mahon was
for a time in the name of Guinness Mahon Guernsey. In 1981, the name of the account
was changed, apparently for administrative reasons, to 'Guinness Mahon Cayman Trust
re College Trustees'. Thus, the flow of funds from companies underlying Channel Island
trusts was from then on routed through Cayman to Guinness and Mahon. Many of
College's Irish clients were unaware of this. The result, however, was that persons who
had formerly been clients of College and of Guinness Mahon Guernsey, then became
clients of College and of Ansbacher. If a College client in Ireland wished to withdraw
funds, Mr. Lipscombe would instruct Guinness and Mahon to that effect. The client
would call to Mr Martin Keane of Guinness and Mahon and he would give him cash or a
cheque for the desired amount. Mr Keane would enter this transaction in a suspense
account, and Mr Traynor, who would know the relevant coded sub-account to be debited,
would deal it with subsequently. From 1981 to 1989, all such withdrawals were debited
to the Guinness Mahon Cayman Trust re College Trustees account.

The Inspectors note that clients of College who became clients of Ansbacher in the way
described above, may have been unaware of that fact.

22.11 Persons who were clients of Ansbacher through Mr Jack Stakelum

(Category C).
This category contains persons whose offshore funds were managed by Mr Stakelum and
placed in Ansbacher through Mr Traynor, in the manner described in Chapter 20.

The Inspectors note that clients of Mr Stakelum who were also Ansbacher clients may
have been unaware of the location of their offshore funds.

22.12 Persons whose sole involvement was the establishment of Ansbacher trusts
to which they never transferred any assets (Category D).

The persons listed in this category arranged for the establishment of Ansbacher trusts.
They have informed the Inspectors that no assets were ever transferred to these trusts.

22.13 Persons for whom Ansbacher conducted business other than the holding of
funds (Category E).
This category contains three classes of person:
(i) Persons to whom Ansbacher provided loans in the ordinary course of
business;
 (ii) Persons provided with an Ansbacher company for the purpose of
purchasing property;
(iii) Persons who owned Ansbacher-managed companies which were potential
beneficiaries of the Lynbrette Trust.

The following chapter contains the list of those identified as clients of Ansbacher in each
of the above categories.
 LIST OF CLIENTS OF ANSBACHER (CAYMAN) LIMITED

INDEX

Page
23.1 Introduction 281

23.2 Category A: List of persons who beneficially owned funds in Ansbacher 281

23.3 Description of Category A clients 286

23.4 Category B: List of persons who were clients of Ansbacher through

College Trustees 399

23.5 Description of Category B clients 399

23.6 Category C: List of persons who were clients of Ansbacher through

Mr Jack Stakelum 414

23.7 Description of Category C clients 414

23.8 Category D: List of persons whose sole involvement was the establishment

of Ansbacher trusts to which they never transferred any assets 419

23.9 Description of Category D 419

23.10 Category E: List of persons for whom Ansbacher conducted business

other than the holding of funds 422
 Page
23.11 Category E(i): List of persons to whom Ansbacher provided loans in the
ordinary course of business 423

23.12 Description of Category E(i) clients 423

23.13 Category E(ii): List of persons provided with an Ansbacher company

for the purpose of purchasing property 428

23.14 Description of Category E(ii) clients 428

23.15 Category E(iii): List of persons who owned Ansbacher-managed

companies which were potential beneficiaries of the Lynbrette Trust 429

23.16 Description of Category E(iii) clients 429

LIST OF CLIENTS OF ANSBACHER

23.1 Introduction
This Chapter contains a list of all of the clients of Ansbacher identified by the Inspectors,
which are presented under the category headings outlined in the previous chapter. Each
category list is followed by a series of short narratives about each of the relevant clients.
These narratives identify the individual client and describe their Ansbacher connection.
The evidence supporting the conclusions about each client is appended to the Report,
where any relevant submissions made by or on behalf of each client can also be found.
The Appendix reference number is noted after each narrative.

23.2 Category A: List of persons who beneficially owned funds in Ansbacher

1. Mr Roger P Ballagh
2. Mrs Frances Elizabeth Barrett
3. Mr John Barrett - deceased
4. Mr Jesus Barrios and Mrs Maria Barrios
5. Mr Anthony Barry
6. Sir John Derek Birkin
7. Captain RG Bryce
8. Mr John Byrne
9. Mr Patrick Carty and Mrs Beatrice Carty
10. Mr DHA Cecil - deceased
11. Mr Ronald Chambers
12. Mr Samuel Clarke - deceased
13. Mr Henry J Cleeve
14. Mr PJ Clonan
15. Mr Kevin Collery and Mrs Kathleen Collery
16. Mr Padraig Collery
17. Mr Cornelius Collins
18. Mr Patrick Finbarr Collins
19. Lady Carole Conyngham
20. Mr Hugh Coveney - deceased
21. Mr George Crampton
22. Captain WR Cuffe-Smith - deceased
23. Mr James P Culliton
24. Dr Michael Dargan
25. Mr Brian Dennis
26. Mr Charles TG Dillon - deceased
27. Mr Terence DE Dixon
28. Mr David Doyle
29. Mr P Vincent Doyle - deceased
30. Mrs Helen Downes
31. Mr James Durkin
32. Mr James Sidney East - deceased
33. Mr Francis Augustine Eastwood - deceased
34. Mr Stephen Enoch
35. Mr Victor Enoch
36. Mr Bernard Etzin
37. Mr Sam Field-Corbett
38. Mr John Finnegan
39. Mr Desmond G Fitzgerald - deceased
40. Mrs Eileen M Fitzgerald
41. Mr Raymond C Fitzgerald
42. Ms Marjorie Sue Fitzgibbon
43. Mr Denis Foley
44. Fruit Importers of Ireland Limited
45. Mr Arthur Gibney
46. Mr Francis P Glennon - deceased
47. Mr Paul Goode
48. Mr Christopher Goosen
49. Ms Clare Griffin
50. Mr James Griffin Junior
51. Mrs Jennifer Guinness
52. Mr John Guinness - deceased
53. Mr Frank Hall
54. Mr Charles J Haughey
55. Mr Gerald Hickey - deceased
56. Mr Jorge Hine and Mrs Margo Hine
57. Mr Denis A Jackson
58. Mr Thomas Jackson
59. Jamila Pty Limited
60. Mr William Kearney - deceased
61. Mr John Kennedy
62. Dr Colm Killeen
63. Mr Richard Lawes
64. Mr Frank Lee
65. Mr Michael Leyden and Mrs Dorothy Leyden
66. Mr James Henry Lindsay
67. Mr Joseph Clayton Love Junior
68. Mr Bryan Lynam
69. Mr Edward Lynam
70. Ms Eileen Lynam
71. Mr James Lynam - deceased
72. Ms Mary Lynam
73. Mrs Hedli MacNeice - deceased
74. Ms Mary Meagher McCarroll
75. Mr Patrick McCarroll - deceased
76. Mr Liam McGonagle - deceased
77. Mr Sean McKeon
78. Mr Thomas J McLaughlin - deceased
79. Mr Patrick McNamee
80. Ms Susan Sheridan Mack
81. Ms Mary Maher (nee Lynam)
82. Sir George Mahon - deceased
83. Mr Alexander H Major
84. Mr Augustina Russek de Malamud
85. Mr Carlos David Malamud
86. Mr German Malamud
87. Mr Isaac Carlos Malamud
88. Mr Joseph Malone
89. Mr Ronald Markham and Ms Jean Peterson
90. Mr John A Masek
91. Mr Basil Mawdsley
92. Professor Anthony J Merrett
93. Mr Geoffrey Miller
94. Mr Jerome Morris
95. Mr Joseph Morris
96. Mr Martin Morris - deceased
97. Mr Stephen Morris
98. Mr Thomas Morris
99. Mr John Mulhern
100. Mr James Murray
101. Mr William Navan Senior - deceased
102. Mr Maurice Neligan and Dr Patricia Neligan
103. Mr Olivier Nicol
104. Mr Michael J O'Keeffe - deceased
105. Mr Maurice O'Kelly
106. O'Reilly Aerlod (Ireland) Limited
107. Mr Dermot O'Reilly-Hyland - deceased
108. Mr Ken O'Reilly-Hyland
109. Mr Michael O'Shea
110. Mr John Oppermann and Mrs Eileen Oppermann
111. Pettit International Limited
112. Dr Michael Phelan
113. Ms Marily Power
114. Mr Fernando Pruna and Mrs Eudelia Pruna
115. Mr Seamus Purcell
116. Mr Diarmuid Quirke - deceased
117. Mr Jeremy Robson
118. Mrs Sonia Rogers
119. Captain Tim Rogers - deceased
120. Mr John Savoy
121. Schwartz Management Company
122. Mr Joseph Seeley
123. Mr Sidney Seymour - deceased
124. Mrs Nora Shanahan
125. Mr Michael Shanley
126. Mr John D Sheridan - deceased
127. Mr Jack Stakelum
128. Mr Sam Stephenson
129. Super Ser Limited
130. Mr and Mrs Peter Tamburo
131. Mr Kazuaki Tazaki
132. Ms Carmel Traynor
133. Mr James Desmond Traynor
134. Mr Joseph Turley
135. Mr Martin Turley
136. Sir Charles Villiers - deceased
137. Dr Oliver Waldron
138. Mr Joseph Walsh
139. Mr Ivan Webb - deceased
140. Ms Joan Williams
141. Mr Robert Willis
142. Mr Robert Wilson
143. Wilson Bishop Tolley and Co Pty
144. Mr Adolf Franz (Burschi) Wojnar - deceased
145. Mr Richard Wood
146. Mr Christopher Woodward
147. Mr Ronald Warren Woss

23.3 Description of Category A clients

1. Mr Roger P Ballagh
Mr Michael O'Shea, Mr Roger P Ballagh and Mr Terence D E Dixon are solicitors in a
Dublin firm. During 1992, fees earned by the firm were given by Mr McGonagle, their
late partner, to Mr Desmond Traynor and ended up in an Ansbacher account. The
remaining partners have assured the Inspectors that they did not know where these funds
were lodged. The sum involved was £40,000 approximately. The money was left on
deposit offshore for some time and then shared out among the partners. The payments
were made from a Hamilton Ross account in Ansbacher. The IIB dealing tickets show
that Mr Ballagh received over IR£11,530, Mr O'Shea and Mr Dixon IR£6,243 each, the
firm IR£4,877 and a company controlled by the late Mr Liam McGonagle Stg £6701. All
the partners who shared in that fund were thus clients of Ansbacher. (The Inspectors'
formal decision on the late Mr McGonagle is to be found elsewhere in the report.)

Mr Michael J O'Shea, Mr Roger Ballagh and Mr Terence Dixon were clients of

Ansbacher, although the Inspectors accept that they were not aware of the location of the
funds.

Appendix XV (1) refers.

2. Mrs Frances Elizabeth Barrett

Mrs Frances Elizabeth Barrett resides at The Laurels, Clifford Chambers, Stratford-upon-
Avon, Warwickshire, England. She replied to the Inspectors' written request for
information by letter dated 2 July 2000, saying that she had no knowledge of the matters
the subject of their enquiries. Without the benefit of Mrs Barrett's assistance, the
Inspectors have been obliged to base their conclusions on documentary evidence in their
possession.

Information provided by Mr Padraig Collery shows that Mrs Barrett was the beneficiary
of an Ansbacher trust called the Alderwood Trust, and that her Ansbacher account code
was A/A 32.

From other documents, it emerges that Mrs Barrett received payments in London by
direction of Mr Desmond Traynor writing on Ansbacher headed paper, and these
payments were debited to an account in the name, initially, of Colinas Investments
Limited, and later of Coral Reef Securities, both in Guinness and Mahon. Documents
relating to Coral Reef's account in Guinness Mahon & Co. show that Mrs Barrett was an
authorized signatory on the account.

Letters from Mr Padraig Collery to Mrs Barrett from an address at Winetavern Street,
Dublin, between 1995 and 1997, refer to a deposit that had matured and explain that part
of the total sum has been replaced on deposit and that the balance, after deduction of fees,
is being credited to the Coral Reef account in London. The Winetavern Street address
was the address from which Mr Collery conducted Ansbacher's business after the death
of Mr Traynor in 1994.

Appendix XV (2) refers.

3. Mr John Barrett Deceased

The late Mr John Barrett, formerly of 34 Monckton Court, Addison Road, London W14
8FN, was a long time Guinness and Mahon client. At all times he appears to have dealt
with Mr Desmond Traynor in relation to his Guinness and Mahon business. During the
1970s Mr Barrett had dealings with Mr Traynor that show an Ansbacher connection. His
involvement was contemporaneous with a transaction between Guinness and
Mahon/Ansbacher and a Mrs Frances Barrett about whom the Inspectors have made a
separate finding.

Appendix XV (3) refers.

4. Mr Jesus Barrios and Mrs Maria Barrios

Mr Jesus Barrios and Mrs Maria Barrios formerly of 943 S.W. 78 Place, Florida 33144
USA were associates of Mr and Mrs Andreas Pruna. Like the Prunas the Barrioses were
under investigation for drug related offences in the State of Florida. Evidence on this
was given to the Moriarty Tribunal by Ms Sandra Kells on behalf of Guinness and
Mahon. The correctness of her evidence at that Tribunal has been confirmed to the
Inspectors by Guinness and Mahon.

The Barrioses borrowed $75,000.00 from Guinness and Mahon in 1984. The loan was
secured by a mortgage on property in Florida and a GMCT deposit in Dublin. Interest
was paid on the borrowing by the borrowers during the lifetime of the loan. At all times
the loan was considered a 'suitably secured' loan in the books of Guinness and Mahon.
The artificial nature of the transaction is clear from the way in which the loan was
operated. Interest on the loan was varied from time to time without any commercial
connection with the market interest rate at the time. For example an exchange of telexes
between GMCT and Guinness and Mahon dated 18 th and 19 th December 1985 makes
clear that the interest charged in 1984 at the negotiation of the loan was up to 8% higher
than the then market rate. It appears that artificial rates were put in place with only the
differential between the deposit rate and the loan rate representing the true position. In
December 1985, in an attempt to regularise the position, the loan rate was cut from 18%
to 10% with a corresponding adjustment in the deposit rate.
At all material times Ansbacher held the backing deposit in its account in Guinness and
Mahon in Ireland and/or in the Cayman Islands.

Appendix XV (4) refers.

5. Mr Anthony Barry

Mr Anthony Dermot Barry was formerly Chairman of CRH plc ('CRH'). Mr Barry told
the Inspectors in his evidence on oath that in about 1989, he wished to make financial
arrangements for two of his children, who were non-resident. At that time, Mr Desmond
Traynor was Chairman of CRH and Mr Barry was in regular contact with him. Mr
Traynor had left Guinness and Mahon at the time, but Mr Barry was aware that he
retained a connection with an offshore subsidiary of Guinness and Mahon . Mr Barry
mentioned to Mr Traynor his desire to provide for his children, and to utilise certain
funds representing foreign dividend income and/or payments in reimbursements of
business expenses for this purpose. He told the Inspectors that this income had been
properly declared to the Revenue. Mr Traynor suggested that Mr Barry should give him
the cheques, telling him when he wanted to transfer money to his children and that he
would arrange it. Mr Barry accepted the suggestion, and gave cheques to Mr Traynor
from time to time, usually sending them through CRH internal mail.

It is clear from Mr Barry's evidence and from documentation in the possession of the
Inspectors and shown to Mr Barry that Mr Traynor deposited Mr Barry's funds with
Ansbacher. Transfers to Mr Barry's children from time to time were debited to
Ansbacher's account in IIB. Mr Padraig Collery has informed the Inspectors that Mr
Barry's Ansbacher account bore the code A/A22.

Mr Barry was a client of Ansbacher, as was confirmed by him in his evidence to the
Inspectors, only to the extent indicated in the above paragraphs.

Appendix XV (5) refers.

6. Sir John Derek Birkin
Sir John Derek Birkin is now retired but was a leading industrialist in the United
Kingdom. Sir Derek was interviewed in London on 20 February, 2001. He explained
that he had a business arrangement with Mr Desmond Traynor, then chief executive of
Guinness and Mahon, under which he placed money offshore. Sir Derek was not aware
of the actual mechanism used by Mr Traynor to care for the funds but he now accepts that
Ansbacher was used for the purpose. At a later date the money was transferred to
Hamilton Ross.

Appendix XV (6) refers.

7. Captain R G Bryce
Captain RG Bryce is a resident of Howth, Co Dublin. From 1974 to 1977, he lived in
Bangkok, Thailand. Mr John Guinness of Guinness and Mahon offered to set up an
account in GMCT for Captain Bryce, so that he could leave his savings offshore until his
return to Ireland. Captain Bryce says that to the best of his recollection, the monies in his
account were repatriated during the tax year following his return to Ireland. A letter dated
16 December 1975 from Mr John Furze of Ansbacher to Captain Bryce thanks him for
his recent deposit of funds, and notes that he may wish to transfer further funds from time
to time from his account in France.

Appendix XV (7) refers.

8. Mr John Byrne, Tristan Securities Limited and Prospect Holdings

Mr John Byrne is a well-known property developer. He has extensive property interests
in Ireland and the United Kingdom.
On the 9 August 1971, Mr Byrne put in place two structures each headed by a trust -
namely the Tristan Settlement and the Prospect Settlement.

The Tristan Settlement

This related to Mr Byrne's UK business. The beneficiaries were to be identified by
reference to a nominal payment to the British Red Cross. The settlor was Mr John
Furze.

The Tristan Settlement had a structure that included a Cayman company, Tristan
Securities Limited (TSL). This company had two subsidiaries, Danstar Holdings Pty (an
Australian company) and Intramar Securities, a Cayman company. Danstar had an UK
subsidiary, Tepbrook Properties Limited.

The Inspectors accepted the evidence supplied by Mr Byrne on the structure of this group
(see exhibit 2 of transcript of evidence. The Inspectors, however, looked at the element of
control as relevant to their work. They are satisfied that the legal ownership of the group
vested in the trust but that control remained with Mr Byrne.

The Prospect Settlement

This related to Mr Byrne's Irish business. The settlor was Mr Byrne. The beneficiaries
were the wife and family of the settlor.

An unlimited Cayman company, Prospect Holdings, which in turn owned Carlisle Trust
Limited, an Irish company, held the assets on behalf of the trust. Carlisle had in turn a
number of subsidiaries: Dublin City Estates Limited, Alstead Securities, Smithfield
Property Development Limited (formerly Endcamp Limited), Goreville Limited, Pritco
Limited and JEC properties. This is set out in Exhibit 2 ibid.

These entities typically had various categories of shares, which vested ownership in the
next highest corporate vehicle while retaining control in the hands of Mr Byrne.
That Prospect Holdings was a client of Ansbacher is clear. The Inspectors considered
whether it could be said that Mr John Byrne and Tristan Securities Ltd were also clients.
Other evidence must be considered to arrive at any conclusion on these matters.

General Findings on Structure

In the case of both the Tristan and Prospect Settlements, Mr Byrne funded the
establishment of the trusts and retained the right to change the trustees.
The trustees appointed were the Company now under investigation. The trustees are
unchanged to date.

The two trust structures were established and remain separate. Notwithstanding this
independence, the Tristan Settlement had provided back-to-back money to facilitate the
borrowings of Irish companies with which it had no legal connection. The representation
made on Mr Byrne's behalf, as an explanation for this unusual arrangement, that money
on deposit continues to earn interest while forming the basis of a back-to-back loan is
noted and accepted. Interest earned, however, would arise in any event. To provide cash
backing for the borrowings of a third party, for no reward, in a commercial situation, is a
very strange use of trust money. The Inspectors are of the view that it shows a closer
connection between these entities than represented by Mr Byrne

Other Relevant Matters

Mr Byrne personally guaranteed the borrowings of companies within the structure on
many occasions. He was unable to explain, to the satisfaction of the Inspectors, why he
should be called upon and/or agree to so do where he had no legal or beneficial interest in
the trusts.

Ansbacher made a STG£3,500 payment to Mr Byrne through Guinness and Mahon in

April 1990. No explanation has been received as to this transaction.

IIB advanced a loan in the sum of IR£212,000 in 1994 circa to Mrs Byrne (the wife of
John Byrne), on behalf of Ballymadun Stud. This was cash backed by Hamilton Ross or
Ansbacher. At that time, Hamilton Ross (which had in theory separated from its
Ansbacher 'parent') continued to use Ansbacher's Cayman address and telephone
number. Its business continued to be a matter on which the Inspectors were required to
report and its activities continued to be interwoven with Ansbacher's Irish business. The
loan was repaid in September of the same year. The funds were raised to refund Mr
Byrne for advances to the stud over the years. The repayment of the loan is reflected in
Ansbacher's J6 account on 1 September 1994. The Inspectors have been informed by Mr
Byrne that this account was relevant to Tristan Securities Ltd. The Ansbacher connection
is confirmed by the IIB internal documentation attached hereto. Mr Byrne's explanation
is rejected as failing to disclose the full extent of the terms and conditions under which
the money was advanced. The Inspectors conclude that Mr Byrne was the real
beneficiary of this transaction.

The Inspectors received a letter dated February 28 2001 from Mr Byrne's solicitor, which
was considered by the Inspectors prior to their decision.

The Inspectors noted from documents supplied by Mr Byrne that Ansbacher, in

contacting their clients recently in connection with the Cayman Island litigation
concerning the disclosure of information, appears to include Mr Byrne as one of their
clients who were entitled to object.

The Inspectors considered all the matters dealt with at the interview, those items
exhibited herewith and Mr Byrne's explanations, written and oral, in arriving at their
conclusions.

The Inspectors note the matters set out herein above and further conclude:

I The trusts as established could have provided a legitimate vehicle for the apparent
objective of transferring ownership to a trust while retaining control with Mr
Byrne.
II The trusts as operated did not appear to the Inspectors to retain the legal
separation necessary to achieve Mr Byrne's objective.

III Many loans were provided to the companies controlled by Mr Byrne and many of
these had back-to-back security provided by the Tristan structure. These are
described in the records of Guinness and Mahon as 'suitably secured'. Mr
Byrne's true relationship with the operating companies is indicated by the
personal guarantees given by him for these loans.

IV The funds held by the trusts in Ansbacher in Ireland were at all times available for
any purpose to Mr Byrne who (subject to his duty to retain sufficient deposits to
service the back-to-back facility) had power to apply these funds as he thought fit.
No evidence has been received by the Inspectors (relevant to any period prior to
the public controversies in Ireland), which tends to contradict the Inspectors'
conclusions on control of the funds by Mr Byrne.

V As the Cayman records of the Company have been withheld from us, the
Inspectors are unable to ascertain with certainty the extent to which other trust
funds were available in Cayman, which never left a financial footprint in Ireland.
Mr Byrne assures the Inspectors that the company under investigation has refused
him access to these records. It was open to Mr Byrne to change the trustees but
he has chosen to accept advice that it is futile to so do.

The Inspectors conclude that control of the trust funds rested with Mr Byrne at all
times.

Appendix XV (8) refers.

9. Mr Patrick Carty, deceased and Mrs Beatrice Carty, deceased

Mr Patrick Carty (deceased) and his wife Mrs Beatrice Carty (deceased), formerly of 13,
The Pines, Castleknock, Dublin 15 were retired businesspersons.

Patrick and Beatrice Carty established a discretionary trust through Guinness and Mahon
in their joint names in the Channel Islands around 1971. The monies deposited in the
trust were moved to Ansbacher at some stage prior to the winding-up of the trust in 1993,
and appointments to beneficiaries came out of an Ansbacher account in IIB, no.
02/01087/81.

Appendix XV (9) refers.

10. Mr DHA Cecil, deceased

The late Mr DHA Cecil, who died in November 2000, was a resident of the United
Kingdom. He owned a public house known as the Hare & Hounds in Hungerford, Berks.
From documents in the Inspectors' possession, it emerges that he obtained a loan for
IR£179,616.85 in the 1970s from Guinness and Mahon, which was backed by a guarantee
from GMCT supported by hypothecated funds equal to the amount of the loan. Further
documentation gives rise to an inference that he was the beneficial owner of funds in two
other Ansbacher accounts, one in the name of a Channel Islands company called
Gombrette Limited, which also had a Guinness and Mahon loan backed by funds in
GMCT, and another with the reference 'CD Woodward', which had a similar cash-
backed loan. (Mr Christopher D Woodward was a director of Gombrette Limited). Mr
Cecil's accounts were coded '#3', 'G' and 'R/F'. The loans appear to have been taken out
for the purpose of purchasing shares in Jamaica Sugar Estates Limited, and the shares
were used as security for all three loans, in addition to the cash deposits. The Gombrette
loan was for IR£247,500 and the Woodward loan was for IR£123,000. Since all of these
were backed by cash, Mr Cecil's Ansbacher deposits amounted to at least IR£550,116.85
in the mid-1970s. In correspondence between Ansbacher and Guinness and Mahon, the
three loans are frequently mentioned together.
Appendix XV (10) refers.

11. Mr Ronald Chambers

Mr Ronald Chambers is a former managing director of Robert Wilson and Sons (Ireland)
Limited. He is now retired.

Mr Chambers gave evidence that on the advice of Mr Desmond Traynor, he established,

in 1972, a discretionary trust of which GMCT was trustee. The trust (known as the Ascot
Trust) was for his own benefit, and for that of his wife and children. The trust funds were
deposited with Ansbacher, where, according to statements given to Mr Chambers by Mr
Padraig Collery, they were kept in an account coded A/A66.

Mr Traynor told Mr Chambers that he could withdraw money from the trust funds
whenever he wished, simply by asking Mr Traynor, or, in his absence, Mr Collery. Mr
Chambers availed of this service on a number of occasions. Funds were transferred
directly to his account in Barclay's Bank, London. Documentary evidence in relation to
withdrawals in 1990 shows that the amount withdrawn was debited to the Ansbacher
pooled account in Guinness and Mahon.

Appendix XV (12) refers.

12. Mr Samuel Clarke, deceased

The late Mr Samuel Clarke was a director of Crampton Housing Limited. In or about
1972, Guinness and Mahon was involved in a joint venture with Crampton Housing
Limited for the development of a site in Dublin. Mr George Crampton gave evidence on
oath to the Inspectors to the effect that six trusts were to be established in connection with
this development, one for each of the directors of Crampton Housing Limited. He said
that his own trust was in fact established. On the balance of probabilities, this fact,
together with the correspondence herewith, indicates that the entire scheme was
activated. The Inspectors are satisfied that the establishment of a trust on behalf of a
person constituted the carrying out of business for them by GMCT. Documentation in
the Inspectors' possession indicates that the trust to be attributed to Mr Clarke was to be
called the Whitethorn B Trust.

The Inspectors have been unable to trace the next-of-kin of Mr Clarke.

Appendix XV (13) refers.

13. Mr Henry J Cleeve

Mr Henry J Cleeve resides at The Old Rectory, Gowran, Co Kilkenny.

Mr Cleeve informed the Inspectors that he set up the Springfield Trust with funds
bequeathed to him by his aunt, a Canadian national, who died in 1979.

1980 Statements of a GMCT sundry sub company account in Guinness and Mahon show
transactions relating to Mr Cleeve and to a company called 'Springfield Investments'
with which his name is linked in a number of statements. One such transaction, dated 15
August 1980 and referenced 're Springfield', shows a debit of STG£8,000. It would
appear from a letter dated 18 August 1980, written to Guinness and Mahon by Derek
Holden & Co, Solicitors, that a sum of STG£8,000 was sent to that firm by Guinness and
Mahon on behalf of Mr Cleeve on 14 August 1980.

Appendix XV (14) refers.

14. Mr Patrick J Clonan

Mr Patrick J Clonan was a shareholder in Deilginish Holdings Limited, a property
development company. Documents in the possession of the Inspectors show that Mr
Clonan received a payment and travellers cheques, both of which were debited to an
Ansbacher account in Guinness and Mahon. The Inspectors wrote to Mr Clonan on 3
April 2001 seeking information about these transactions. On 20 April 2001, Mr Clonan
replied, stating that he had never had any dealings with Ansbacher. However, he admitted
that he had placed money abroad through Mr Jack Stakelum, but said that he had no
knowledge of where those funds were placed.

Appendix XV (15) refers.

15. Mr Kevin Collery and Mrs Kathleen Collery

Mr Kevin Collery (deceased) and Mrs Kathleen Collery are the parents of Mr Padraig
Collery.

Mr Desmond Traynor opened an Ansbacher bureau account at the request of Mr Padraig

Collery in May 1992. Mr Kevin Collery's funds from a maturing investment held in
Ireland were placed on deposit in an account number A/A30K. Mr Padraig Collery
added further funds after his father's death on 20 April 1995. The account was routed
through Hamilton Ross from about 1993 and was closed in July 1999. It would appear
that neither Mr Kevin Collery nor Mrs Kathleen Collery took any part in the operation of
the account.

Appendix XV (16) refers.

16. Mr Padraig Collery

From 1974, Mr Padraig Collery worked with Mr Desmond Traynor in Guinness and
Mahon as an accounting and computer manager, rising to become an Associate Director
in 1986. He left Guinness and Mahon in 1989 and joined a computer software supplier
as a support manager, but continued, on a part-time basis, to assist Mr Traynor with the
maintenance of the Ansbacher and College Trustees computerised accounting records,
the so-called bureau system. After Mr Traynor's death in 1994, Mr Collery was the
principal Ansbacher authorised representative in Ireland.

An Ansbacher deposit account, number A/A30, was opened for him by Mr Traynor into
which fees, expenses and gratuities earned for his work on Ansbacher and College
Trustees were transferred. At the start of January 1993, Mr Traynor arranged that Mr
Collery's deposit account was transferred into the name of Hamilton Ross.

Appendix XV (17) refers.

17. Mr Cornelius Collins

Cornelius (Neil) J Collins is a businessman who is currently Managing Director of

Heffernan's Travel in Cork. He has been involved in property development both in
Ireland and abroad.
Mr Collins told the Inspectors under oath that he had funds and assets in the United
States, which had been given to him by an uncle in the States. Mr Collins was advised by
Stokes Kennedy Crowley, who were his financial advisers, that it would be more
productive to invest those assets offshore than to bring them back to Ireland. On the
advice of Stokes Kennedy Crowley, his financial advisers, a trust called the Redhall
Trust, of which Ansbacher was trustee, was established in the Cayman Islands. A 1976
statement of affairs of Redhall Trust shows that the trust was the beneficial owner of
shares in two companies: Redhall Investments Limited ('Redhall') and Agar International
Limited ('Agar'). Mr Neil Collins said that Redhall held his funds, while Agar held those
of his brother. Documentation indicates that the Redhall funds were in an account coded
A/X4

Tamarin Holdings Limited ('Tamarin'), a company belonging to Mr Collins, was also

linked with Ansbacher. Documentation indicates that Tamarin had at least two coded
accounts, A/X1 and A/X5.
Mr Collins, together with two partners, was involved in a property development venture
in Dundalk in the early 1970s. He had replaced Mr Neil McCann in this venture. An
undated letter from Mr McCann to Ansbacher refers to a Deed of Settlement dated 31
March 1972, by which John Andrew Furze appointed Ansbacher as Trustees of a
settlement for the benefit of the issue of the late Charles McCann and Rosetta McCann.
The letter states that in its capacity as Trustee of the said settlement, Ansbacher, through
its nominees, owned the entire issued share capital of a company called Blue Limited.
The letter goes on to authorize Ansbacher to transfer the entire issued share capital of
Blue Limited to Neil Collins. The Inspectors note that when asked about this, Mr Collins
said he had never heard of Blue Limited.

However, a letter dated 5 January 1973 from Mr Alex Spain to Mr Vincent Walsh of
Arthur Cox, and copied to Mr McCann and Mr Philip Monahan, refers to three Cayman
trusts, called the Red, White and Blue trusts, which were established 'early in 1972', and
directs that any profits arising from Earl House Limited and Earl House Investments
Limited should flow into the trusts 'through Jocal Investments.' A Companies Office
search reveals that Earl House Investments was a company of which Mr Collins was a
director, and his employee, Mr Frank Lee, was secretary. The registered office of the
company from 1975 to 1982 was Westboro, Montenotte, Cork, which was a business
address of Mr Collins. Jocal Investments was the majority shareholder in Earl House
Limited.

Mr Collins was also involved in a consortium to carry out a development near Phoenix,
Arizona, USA. Upon the advice of Mr Desmond Traynor of Guinness and Mahon, a
scheme was constructed involving the establishment of a discretionary trust, (the
Lynbrette Trust) of which GMCT was the Trustee. The Trust had as beneficiaries five
Cayman companies, representing the interests of the five Irish participants. Mr Collins
told the Inspectors that Spartacus Holdings Limited was the name of the company that
represented his interest in the Trust. The development was unsuccessful and all
participants lost their investments.
Appendix XV (18) refers.

18. Dr Patrick Finbarr Collins

Dr Patrick Finbarr ('Barrie') Collins is a retired medical practitioner, and former non-
executive director of Westboro Investments. In reply to the Inspectors request for
information, he stated that he had no connections with Ansbacher. In the course of his
evidence on oath to the Inspectors, Dr Collins said that an American relative gave him
some shares, which he then gave to his brother, Mr Cornelius ('Neil') Collins, to dispose
of for him. He believed that Mr Neil Collins invested the proceeds of sale on his behalf.

The said Mr Neil Collins also gave evidence on oath to the Inspectors, in the course of
which he told them of the establishment of a trust called the Redhall Trust, of which
Ansbacher was trustee. A 1976 statement of affairs of Redhall Trust shows that the trust
was the beneficial owner of shares in two companies: Redhall Investments Limited and
Agar International Limited. Mr Neil Collins said Agar International Limited held funds
belonging to his brother, Dr Barrie Collins.

The Inspectors accept that Dr Collins left entirely to his brother Mr Neil Collins the
investment and management of the proceeds of the sale of Dr Collins' shares.

Appendix XV (19) refers.

19. Lady Carole Conyngham (formerly Ms Carole Power Yorke)

Lady Carole Conyngham (formerly Ms Carole Power Yorke) resides at 42 Lygon Road,
Edinburgh, Scotland. The Inspectors wrote to Lady Conyngham requesting information
on 11 May 2000. Her solicitors replied on 22 May 2000, explaining that she was ill. A
medical certificate was furnished on 21 June, at which time her solicitors requested a
further 6 weeks in which to respond to the Inspectors' letter. The Inspectors acceded to
the request, fixing a deadline of 3 August 2000. On 12 July 2000, Lady Conygham's
husband telephoned the Inspectors' solicitor to explain that his wife was abroad
convalescing, and that it would not be possible to deal with the matter by the 3 August.
This was followed by a letter dated 13 July 2000 from Lady Conyngham's solicitor,
saying that he fully expected to be able to provide the Inspectors with a statement by the
end of August. Despite two telephone reminders from the Inspectors' solicitor, (in
September 2000 and 24 October 2000), as well as a written reminder on 26 October
2000, the only response was a fax from Lady Conyngham's solicitor on 30 October 2000
saying that he had reminded his client about the matter and was awaiting her instructions.
In the circumstances, the Inspectors have been obliged to arrive at a preliminary
conclusion without the benefit of Lady Conyngham's evidence.

Lady Conyngham had funds, stocks and shares on deposit with GMCT. These funds,
stocks and shares were held in the name of a company called Capoyo Limited. These
were used as security for loans obtained by Lady Conyngham from Guinness and Mahon.

Appendix XV (20) refers.

20. Mr Hugh Coveney, deceased

Mr Hugh P Coveney, late of Laharn, Minane Bridge, County Cork, was a member of Dail
Eireann and a quantity surveyor by profession.

The existence of deposits with GMCT during the 1970s up to 13 December 1979
belonging to the late Mr Coveney was admitted on behalf of his Estate both to the
Moriarty Tribunal and to the Inspectors. It was confirmed that documents bearing the
reference 'HC' related to the late Mr Coveney. This was confirmed by a Guinness and
Mahon statement of account entitled 'Guinness Mahon Cayman Trust Ltd HC' in which
a debit for 10 April 1979 reads 'tsfr stg 2000 to Midland Bank re Mr Hugh Coveney'.
A memorandum prepared for the Moriarty Tribunal by the late Mr Coveney dealt with a
US property venture. This document disclosed that, in 1980, the late Mr Coveney,
together with three American investors and four other Irish investors, formed a
consortium to develop a property in the US. The consortium caused a discretionary trust,
the Lynbrette Trust, to be established, of which trust GMCT was the trustee. The
beneficiaries of the Lynbrette Trust were intended to be five Cayman Island registered
companies. The late Mr Coveney was to be given the option to acquire one of these
companies, Eclipse Holdings Limited ('Eclipse'). Mr Coveney was required to invest
$212,500 in the venture. Eclipse borrowed the necessary funds from GMCT and the late
Mr Coveney guaranteed these borrowings, in return for which he was to be given an
option to acquire the shares of Eclipse. The property development in question was
unsuccessful and failed financially and the late Mr Coveney had his guarantee for eclipse
called by GMCT. He also had, with other Irish investors, guaranteed borrowings of the
Lynbrette Trust from AIB. That guarantee was also called. The late Mr Coveney suffered
considerable losses on this venture.

Appendix XV (21) refers.

21. Mr George Crampton

Mr George Crampton is a former chairman and managing director of the building

company, G&T Crampton. In or about 1972, Guinness and Mahon was involved in a
joint venture with Crampton Housing Limited for the development of a site in Dublin.
The directors of Cramptons sought advice from Mr Don Reid of Stokes Kennedy
Crowley (now KPMG) as to taxation aspects of a proposal made by Mr Desmond
Traynor to place the proceeds of the joint venture in an offshore trust based in the
Cayman Islands. Mr Crampton told the Inspectors that following Mr Reid's advice (given
after taking legal opinion) he was satisfied that the scheme did not involve tax evasion.
Consequently six trusts were established in connection with the development, one for
each of the directors of Crampton Housing Limited. Mr Crampton's own trust (known as
the Whitethorn No. 6 Trust) was established in 1972, and the trustee was Ansbacher. The
trust funds were held in the name of a company called Starling Securities Limited. Mr
Crampton understood that the money would be held in the Cayman Islands.

Appendix XV (22) refers.

22. Captain W.R. Cuffe-Smith, deceased

The late Captain W R Cuffe-Smith was an Aer Lingus pilot. Due to the illness of his
widow, and the inability of any other member of his family to be of assistance, the
Inspectors have been obliged to arrive at their preliminary conclusions by reference to
documents in their possession.

An undated Letter of Wishes headed 'Guinness Mahon Cayman Trust Limited' refers to a
discretionary trust and asks the Trustees to hold the trust fund primarily for the benefit of
Captain Cuffe-Smith, his wife and family, and requires the Trustees not to make any
distributions from the fund without asking the advice of Captain Cuffe-Smith. Other
documentation indicates that Captain Cuffe-Smith's funds were in an account coded
'B/L'. Further documentation shows that funds were transferred from time to time from
accounts in Ansbacher's name in Guinness and Mahon and IIB to an account in the name
of Captain Cuffe-Smith in Guinness and Mahon.

Appendix XV (23) refers.

23. Mr James P Culliton

Mr James Culliton became chief executive of CRH in 1974 and a member of its board of
directors. At that time, the late Mr Desmond Traynor was also a member of the board.
Mr Culliton resigned as chief executive in 1987 but remained as a non-executive director
until 1994. Mr Culliton told the Inspectors that in 1979, Mr Traynor offered to place
money for him in a demand account, telling him that the deposit would have a variable
rate of interest and that the interest would be paid gross. It was clear to Mr Culliton that
the account was to be a secret one, and that it would be offshore, although he was under
the impression at the time that it would be located in the Channel Islands. He lodged and
withdrew money through Mr Traynor. He closed the account in 1987. Mr Culliton's
funds were deposited offshore. His business was transacted at all times through Mr
Traynor. Day to day control of funds deposited by Irish residents in the Cayman Islands
rested with Mr Traynor. He did not have day-to-day control of funds deposited in the
Channel Islands. The Inspectors are therefore satisfied that, on the balance of
probabilities, the funds were in Cayman rather than in the Channel Islands, and that Mr
Culliton was, on the balance of probabilities, a client of Ansbacher.

Appendix XV (24) refers.

24. Dr Michael Dargan

Dr Michael Dargan is a former Chairman of CRH and of Aer Lingus. He was also a
member of the Board of the Bank of Ireland.

Dr Dargan, who admits that his memory is unreliable, told the Inspectors in his evidence
on oath that he has no recollection of having any funds in Ansbacher. However,
documentary evidence indicates that a guarantee given by Guinness and Mahon for a loan
obtained from a Brussels bank by Dr Dargan in 1990 was backed by an Ansbacher
deposit. There is also documentary evidence of a transfer of funds from an Ansbacher
account in IIB to accounts in Dr Dargan's name in Ulster Bank and Bank of Ireland.

Appendix XV (25) refers.

25. Mr Brian Dennis

Mr Brian Dennis has been involved all his life in the motor trade and related industries.
He is now partly retired. He is or has been a director of a number of companies, including
HB Dennis Motors Limited, Phoenix Finance Trust, Exchange Finance Limited, Dennis
Group Holdings and the Educational Building Society. He was a long time friend and
neighbour of the late Mr Desmond Traynor.

Mr Dennis stated in evidence that in 1972, he had a discussion with Mr Desmond

Traynor in which he told Mr Traynor that he wished to make provision for the marriage
of his sons. Mr Traynor suggested to him that the most tax-effective way to do so would
be to create a discretionary trust in the Cayman Islands. Mr Dennis then did so, and
transferred funds to the trust by giving them to Mr Traynor. Mr Traynor informed him
that GMCT would be the trustee.

Mr Dennis stated that at a date he cannot recall, Mr Traynor informed him that the trust
was being moved to the Channel Islands. It would appear from an internal Guinness and
Mahon memo dated 24 December 1986 that in the Channel Islands the trust was managed
by College Trustees, but that GMCT continued to hold the deposit.

Appendix XV (26) refers.

26. Mr Charles T G Dillon, deceased

The late Charles TG Dillon was a prominent businessman who had been a director and
chairman of a number of Irish companies including Guinness and Mahon. He had been
appointed a director of that company on 8 May 1990 and retired from the board on 30
June 1996.

Mr Dillon had a relationship with Guinness and Mahon as far back as 1986 when,
according to an internal Guinness and Mahon document, he had a loan together with
another person in the sum of IR£13,716.36. This loan is recorded as backed by an
Ansbacher deposit

Later the deposit appears to have been transferred to an account in the name of Hamilton
Ross held in IIB. The code of this account was A/A57 (see letter 2 February 1993
herewith). From this account there were many transactions in the name of Mr Dillon.
These funds, while in the name of Hamilton Ross, were at all times in the control of
Ansbacher, as Hamilton Ross at that stage was a vehicle of convenience for Ansbacher.

Appendix XV (27) refers.

27. Mr Terence DE Dixon

Mr Michael O'Shea, Mr Roger P Ballagh and Mr Terence D E Dixon are solicitors in a
Dublin firm.

During 1992, fees earned by the firm were given by Mr McGonagle, their late partner, to
Mr Desmond Traynor and ended up in an Ansbacher account. The remaining partners
have assured the Inspectors that they did not know where these funds were lodged. The
sum involved was IR£40,000 approximately. The money was left on deposit offshore for
some time and then shared out among the partners. The payments were made from a
Hamilton Ross account in Ansbacher. The IIB dealing tickets show that Mr Ballagh
received over IR£11,530, Mr O'Shea and Mr Dixon IR£6,243 each, the firm IR£4,877
and a company controlled by the late Mr Liam McGonagle Stg £6701.

All the partners who shared in that fund were thus clients of Ansbacher. The Inspectors'
formal decision on the late Mr McGonagle is to be found elsewhere in the report.

Mr Michael J O'Shea, Mr Roger Ballagh and Mr Terence Dixon were clients of

Ansbacher, although the Inspectors accept that they were not aware of the location of the
funds.

Appendix XV (28) refers.

28. Mr David Doyle

Mr David Doyle is the son of the late PV Doyle of the Doyle Hotel Group. Guinness and
Mahon, acting through Mr Desmond Traynor with whom Mr David Doyle came into
regular contact, set up an offshore deposit account with GMCT for Mr Doyle (the number
of which has not been established) about 1983. Initially Mr Doyle believed the account
was in London, but, around 1986, he learned from Mr Traynor that it was in Cayman. He
ended his relationship with Ansbacher around 1991.

Mr Doyle enjoyed the use of the funds on deposit by means of a service provided by
Ansbacher whereby he was able to deposit and withdraw funds in Ireland.

Appendix XV (29) refers.

29. Mr P Vincent Doyle, deceased

The late Mr P Vincent Doyle was a building contractor who, in the early 1960s,
diversified his business and created the Doyle Hotels Group. Mr Desmond Traynor was
a long time advisor to Mr Doyle, and, after the latter's death in 1988, Mr Traynor
attended board meetings of Doyle Hotels Group, and became a director.

The Inspectors are indebted to Mr George Carville and Mr William Corrigan who
attended for interview. Mr Carville is a former Deputy Managing Director, Financial
Director and Company Secretary of the Doyle Hotel Group. Mr Corrigan acted as
solicitor for the Doyle family and the Group. In these roles they worked very closely
with the late Mr Doyle.

An unlimited company, Thornhill Incorporated, held the shares of PV Doyle Hotels and
the other Doyle companies in Ireland. Shares in Thornhill Incorporated were initially
vested in an Irish discretionary trust for the benefit of Mr Doyle and his wife but, around
1986, 45% of the shares were transferred to the five Doyle children.
In the early 1980s, Mr Doyle arranged for the formation of a US corporation, IH
Investments Inc, which held the shares in the Doyle hotels in the US. The ownership of
IH Investments Inc was by way of Extern Travel Inc 30%, PV Doyle Hotels 34% and
Charles Frederick, a nominee entity used on the advice of Mr Traynor which held 36%.
Extern Travel Inc was set up by Mr Doyle in the US to attract bookings for his Irish
hotels. Extern Travel Inc was owned as to 17% by the Doyle Group and 83% by the
Doyle family members.

Mr Doyle also arranged for setting up of two Liechtenstein establishments into which
were paid commissions earned by Extern Travel Inc. Both of these Liechtenstein bodies
in the mid 1980s transferred their entire funds to a further Liechtenstein body called
TAWA, which was a foundation with similarities to a discretionary family trust.

In the early 1980s, a loan of STG£1m was arranged by Mr Traynor for a UK company,
PV Doyle Hotels Limited, from Guinness Mahon London. The loan was cash backed by
an Ansbacher deposit reference PVD. The deposit funds had come from TAWA or one
of the other Liechtenstein entities.

From 1990 to 1993, after Mr Doyle's death, Mr Traynor sent Ansbacher account
statements on unheaded notepaper for account numbers A/A38 and A/A42 to Mr Carville
who believes they were beneficially owned by Mr Doyle or the Group. Mr Carville
believes that the A/A42 account contained the accumulation of interest on the Stg£1m
deposit which secured the London loan described above.

Over the years, Mr Doyle and his hotel group, which were described by Mr Carville as
being viewed by Mr Doyle as 'one and the same thing', had on-going contact with
Ansbacher. The Inspectors are satisfied that the offshore funds held in Ansbacher in the
names of companies in the Doyles Hotels group was under the effective control of Mr
Doyle.
30. Mrs Helen Downes
Mrs Helen Downes was employed in Guinness and Mahon from the age of 19. She
ceased permanent employment in 1977 but worked on a part-time basis on and off for
many years thereafter. When she became entitled to a sum of money that was surplus to
her needs, she invested the sum on the advice of Mr Desmond Traynor. Initially she was
unaware that the sum was offshore. On one occasion she added to the sum, and withdrew
cash from time to time but in general the account was not active. The money was
eventually held in an Ansbacher account ref A/A45 and later transferred to Hamilton
Ross.

Appendix XV (31) refers.

31. Mr James Durkin

Mr James Durkin of 2 Bernard Road, West Worthing, Sussex, England, is of Irish
background and worked in the building trade for many years. Unfortunately Mr James
Durkin is now in bad health and the Inspectors are indebted to his son for the
information, which he supplied concerning his father. Mr James Durkin established a
vehicle in the Cayman Islands by way of a trust (Beechurst Trust) to receive money
offshore. The Inspectors are not aware of the identity of the beneficiaries of the trust At
least part of the money deposited in the trust made its way to Ansbacher accounts in
Guinness and Mahon and later IIB. The money was also held in the name of Hamilton
Ross Co. Limited in IIB. The account numbers used included A/A8 A/A11 and A/A8.
Later, the money was transferred to accounts outside the scope of this investigation.

Mr James Durkin withdrew money lodged with Ansbacher through both Guinness and
Mahon and IIB and used the funds as his own.
32. Mr James Sidney East, deceased
The late Mr James Sidney East was a director of Crampton Housing Limited. In or about
1972, Guinness and Mahon was involved in a joint venture with Crampton Housing
Limited for the development of a site in Dublin. Mr George Crampton gave evidence on
oath to the Inspectors to the effect that six trusts were to be established in connection with
this development, one for each of the directors of Crampton Housing Limited. He said
that his own trust was in fact established. Documentation in the Inspectors' possession
indicates that the trust to be attributed to Mr East was to be called the Whitethorn C
Trust. In the early 1970s, the late Mr East had a loan from Guinness and Mahon
described by the bank as 'suitably secured'.

On 24 January 2001, the Inspectors wrote to Mr Robin Peilow, Mr East's executor,

requiring him to furnish them with specified information. Mr Peilow, in his reply dated
26 January 2001, informed the Inspectors that he was unaware of any connection between
Mr East and Ansbacher, and that he had no documentation in his possession relating to
the matter. In those circumstances, the Inspectors have formed their preliminary
conclusions on the basis of documentary and other evidence in their possession.

Appendix XV (33) refers.

33. Mr Francis Augustine Eastwood, deceased

The late Mr Francis Augustine Eastwood was a resident of Belfast, where he was a major
dealer in scrap metal. When he sold his scrap metal yard in or around 1986, he settled the
proceeds in three trusts of which Ansbacher was trustee. The trusts were called the
Dallas, Canton and Omaha trusts

Documentation in the possession of the Inspectors shows payments to Mr Eastwood from

Ansbacher accounts in IIB.
34. Mr Stephen Enoch
Mr Stephen Enoch was a resident of Ireland until 1979. He then emigrated to the US
having sold his business interests in this country. He remained in the US until 1990. He
acquired citizenship of the US but on leaving that country in 1990 relinquished that
citizenship. Since 1990 Mr Enoch has had a residence in Spain but denies being tax
resident in Spain or in any country since 1990.

Mr Enoch was interviewed on 17 January 2001. For a full understanding of the issues
raised, the transcript of that interview should be read. Some of the salient points appear
to be as follows:
I. Mr Enoch readily admitted that he was the part owner of a partnership called
Girard Investment, which invested in property and borrowed US$1,250,000
from Guinness and Mahon in 1982. Mr Enoch refused to inform the
Inspectors of the names of the other partners. This borrowing was backed by
an Ansbacher deposit.
II. Mr Enoch and his wife borrowed US$400,000 and $900,000 from
Guinness and Mahon in 1990 both backed with Ansbacher based deposits.
III. Mr Enoch denied knowing anything about Fountain Developments
notwithstanding his name appearing in relation to this entity in the books of
Guinness and Mahon.
IV. Mr Enoch denied any legal or beneficial interest in or knowledge of
ownership of Tabmount Corporation (the operating arm of a Cayman trust
called the Anne Enoch Trust) despite an internal Guinness and Mahon
document, dealing with the extension of a loan, identifying Mr Enoch as a
beneficiary.
35. Mr Victor Enoch
Mr Victor Enoch is a former resident of Ireland who now resides in Spain. He is 84 years
old and in ill health. By reason of his ill health it has not been possible for him to attend
before the Inspectors for examination on matters within his knowledge relevant to the
inquiry. Mr Victor Enoch's non-attendance for examination before the Inspectors is
reasonable in view of his age and state of health.
The central entity which is relevant in assessing this matter, is a Cayman based trust
called the Anne Enoch Trust. Mr Stephen Enoch gave evidence that the person with
information on that trust could be his father Victor Enoch. The Inspectors have
concluded from this and other available information that the Anne Enoch Trust was at all
material times under the control of Mr Victor Enoch and other family members. The
trust has operated at least partly through the Tabmount Corporation.

The Tabmount Corporation is, according to a Guinness and Mahon internal memo, a US
property company, the beneficial owners of which are Mr Victor Enoch, his son Mr
Stephen Enoch and other family members. Guinness and Mahon provided two facilities
to the Tabmount Corporation, one in the sum of US $3 million in 1986 and the second in
a sum of US $1.55 million in 1988. These borrowings were at all relevant times backed
by cash on deposit in the Cayman Islands. On the balance of probability, the Inspectors
conclude that the backing funds were provided by the Anne Enoch Trust structure. This
conclusion is supported by a letter dated the 15 April 1988 from John Collins to
Desmond Traynor listing properties registered in the name of Tabmount as assets of the
Anne Enoch Trust.

In addition, there were many other transactions involving Mr Victor Enoch that had an
Ansbacher connection. An example was Girard Investments, a partnership that included
both Victor and Stephen Enoch. In 1982, a loan was granted to this partnership by
Guinness and Mahon, which was backed by Ansbacher lodgements.

Martina Investments Ltd is another entity connected with Mr Victor Enoch, which
negotiated a loan with Ansbacher involvement. A letter from Guinness and Mahon to
IIB of 6 March 1995 makes clear the Ansbacher connection. Mr Michael Enoch, another
son, during the course of an interview with the Inspectors on 5 April 2001 gave evidence,
the import of which was that his father, Mr Victor Enoch, controlled Martina
Investments Ltd.

A fuller understanding of the Enoch family involvement can be gained if the evidence of
both Mr Stephen Enoch and Mr Michael Enoch is read in conjunction with the other
evidence. This is important because of the lack of first hand evidence from Mr Victor
Enoch.

Appendix XV (36) refers.

36. Mr Bernard Etzin

Mr Bernard Etzin is a US citizen residing at 130 Grosvenor Road, London SW1. In the
1970s he was the Managing Director of Brother Ireland Limited and its English
counterpart, both of which were subsidiaries of the Japanese Multi-National Corporation,
Brother Industries.
The Inspectors required Mr Etzin to attend for interview by letter of 9 March 2001, but
no response was received. It transpired that Mr Etzin had moved residence, but he
confirmed subsequently that he had received the letter. Mr Etzin provided information
during a telephone call with the Solicitor for the Inspectors on 23 May 2001 which, taken
with other information available to them, suggested he had an Ansbacher deposit account.
By letter of 1 October 2001, Mr Etzin was requested to confirm in writing the
information he had given orally. Mr Etzin declined to do so.

From time to time during the 1970s, Mr Etzin borrowed monies from Guinness and
Mahon or guaranteed loans to other companies. As an example, Guinness and Mahon
records indicate that in 1977 Mr Etzin guaranteed a loan to an English company, Concept
Plastics. This loan was described as being 'suitably secured'. In the absence of an
opportunity to interview Mr Etzin, the Inspectors infer that the loan was secured on his
GMCT / Ansbacher deposit.

A further letter of 22 February 1978 from Guinness and Mahon to Mr Traynor listed a
document held for him as 'Closed brown envelope marked 'Agreement re Overseas
Nominees and Etzin''. Overseas Nominees Limited was a Cayman registered nominee
company owned by Ansbacher, and used for its business.

Appendix XV (37) refers.

37. Mr Sam Field-Corbett

Mr Sam Field-Corbett of 22, Pine valley Avenue, Grange Road, Rathfarnham, Dublin
was a close associate of the late Mr Desmond Traynor.

In his evidence on oath to the Inspectors, Mr Field-Corbett said that a trust, known as the
Auckland Trust, was established on his behalf by Mr Desmond Traynor in the Cayman
Islands in the mid 1980s. Mr Field-Corbett transferred money to the trust, which lent it to
a company called Aucklands Investments. The latter placed the money on deposit with
GMCT. A list of names and codes furnished to the Inspectors by Mr Padraig Collery
shows that the funds were held in several accounts coded A/C. Mr Field-Corbett said that
he was entitled to lodge and withdraw money from his coded accounts, and that he
availed of this facility. Mr Field-Corbett also said that he used the trust funds as security
for a loan, which he and two other persons obtained from IIB.

Appendix XV (38) refers.

38. Mr John Finnegan

Mr John Finnegan is a partner in Finnegan Menton. He has been an estate agent from the
mid 1950s.
In his evidence on oath to the Inspectors, Mr Finnegan said that he established a trust in
the Cayman Islands in 1972, upon the advice of Mr Desmond Traynor. GMCT was the
trustee. A company called Palace Investments Limited held the trust assets. The funds
settled upon the trust were Mr Finnegan's share of the profits arising from certain
property transactions in which he was involved together with Guinness and Mahon
transactions. The funds were deposited by Palace Investments Limited with GMCT,
where they were held in accounts coded 'P'. Mr Finnegan accessed his funds by means of
'loans' made by the trustees. He did not repay these 'loans'. Whenever he needed funds,
he informed Mr Traynor, who would arrange to give him a bank draft, or would transfer
funds to bank accounts in Mr Finnegan's name or in the name of his wife or daughter.
The trust was moved from GMCT in the early 1990s.

Appendix XV (39) refers.

39. Mr Desmond G Fitzgerald, deceased

Mr Desmond G Fitzgerald is deceased. He resided at Grove End, 6 The Grove, Epsom,
Surrey, England, where his wife Eileen M Fitzgerald still resides. A letter dated 10 April
1979 between Mr J D Traynor and Mr Fitzgerald made arrangements for the opening of a
bank account in GMCT in the name of Mr Fitzgerald and his wife. Mrs Fitzgerald has
confirmed through her daughter that her husband had dealings with 'Guinness and Mahon
in Cayman'. By letter dated 30 November 2001, Mrs Fitzgerald informed the Inspectors
that she has no information on the details of their account.

Appendix XV (40) refers.

40. Mrs Eileen M. Fitzgerald

See entry for Mr Desmond G Fitzgerald.
41. Mr Raymond C Fitzgerald
Mr Raymond C Fitzgerald with an address in 1987 at 2351 Keystone Boulevard, North
Miami, Florida, US, is one of a number of persons who did business with Guinness and
Mahon in Ireland, apparently as an associate of a family called Pruna, who are the subject
of comment elsewhere in this report. There is no doubt that the two parties were closely
connected as an extract from an insurance policy dated 1 April 1986 show Guinness and
Mahon as the first mortgagees of the above property occupied by Mr Fitzgerald and the
Prunas as second mortgagees. A statement from a Guinness and Mahon official to the
Moriarty Tribunal informed that body that Mr Fitzgerald's December 1986 loan from
Guinness and Mahon was in substitution for a loan made to Mr and Mrs Pruna.

The loan is described as 'suitably secured' in the records of Guinness and Mahon and is
included in a list produced on 24 December 1986 of loans backed with Ansbacher
deposits.

Mr Fitzgerald had the benefit of security for an Irish loan backed by funds on deposit in
Ansbacher. The interest on the backing deposit, by Guinness and Mahon instruction,
was to be credited to an account in Cayman by reason of an instruction in a memorandum
in which the only name mentioned is Mr Fitzgerald. In the absence of an alternative, or
any, explanation the Inspectors conclude that on the balance of probability, Mr Fitzgerald
had a beneficial interest in these funds.

Appendix XV (41) refers.

42. Marjorie Sue Fitzgibbon

Ms Marjorie Sue Fitzgibbon, 34 Courtney House, Appian Way, Dublin 4 is an American
national who settled in Ireland prior to the following events. On 8 July 1971, (as settlor)
she caused to be established in Grand Cayman a trust and appointed GMCT as the
trustees of the trust fund. The trust fund was operated through a company established in
the Cayman Islands called Terra Securities Limited.

On 28 May 1973, the trust funds and all assets were transferred to a different trust known
as the Jersey Settlement under the control of Royal Trust Company of Canada (C.I.)
Limited, 33 Hill Street, St Helier, Jersey. This change apparently arose at the request of
GMCT.

Appendix XV (42) refers.

43. Mr Denis Foley

Mr Denis Foley was, until the recent General Election, a member of Dail Eireann. He was
a director of Central Tourist Holdings, a company that owned the Old Central Hotel in
Ballybunion, Co Kerry.
Mr Foley told the Inspectors that, in 1979, he had a sum of money to invest and he
brought it to the late Mr Desmond Traynor, who at that time was a director of
Guinness and Mahon. The meeting took place on the Guinness and Mahon premises, and
Mr Martin Keane of Guinness and Mahon was present. Mr Foley was told at this meeting
that his money would be invested in a company called Klic Investments. In his evidence
on oath, Mr Foley agreed that in the light of documents made available to him by the
Moriarty Tribunal, his money would appear to have been on deposit in GMCT's account
coded A/A40 in Guinness and Mahon. The account name was subsequently altered to that
of Hamilton Ross.

In 1986, Mr Foley opened a resident deposit account in Guinness and Mahon in his own
name. Some time later, following a serious illness, he added his daughter's name to the
account. In 1990, Mr Traynor advised him to transfer the funds in the Guinness and
Mahon account into his 'Klic Investments' account in order to earn better interest.
Mr Foley did so. Mr Foley now believes that this money was placed on deposit in
Ansbacher in a new coded account, A/A49.

Mr Foley told the Inspectors that he made three withdrawals from the account. The first
two withdrawals were made by arrangement with Mr Traynor. The first was a
Guinness and Mahon bank draft; the second was in cash. The third withdrawal took place
after Mr Traynor's death. Mr Foley contacted Mr Padraig Collery to arrange this. The
two men met in Jury's Hotel in Dublin, where Mr Collery handed over £50,000 in cash to
Mr Foley.

Appendix XV (43) refers.

44. Fruit Importers of Ireland Limited

Fruit Importers of Ireland Limited ('Fruit Importers') was incorporated in 1968. Mr Neil
McCann was a majority shareholder, holding about 60% of the shares. The rest of the
shares were divided among a number of persons. In 1980, the company ceased trading,
and its trade and assets were transferred to a new company, FII plc. In 1986, FII plc
purchased Fyffes, and subsequently took over the name. The company is now known as
Fyffes plc. Mr McCann gave evidence on oath to the Inspectors, and also furnished them
with a number of documents.

It is clear from a telex dated 14 October 1977 from Mr John Furze of GMCT to Martin
Keane of Guinness and Mahon that Fruit Importers had funds on deposit with GMCT.
This telex authorises the withdrawal of the balance in a dollar account and the debiting of
the amount to GMCT's sundry sub-company account in Guinness and Mahon. Mr
McCann stated that he did not remember Fruit Importers having funds in GMCT. He
agreed however that such must have been the case.

Up to 1974, Fruit Importers had a subsidiary called International Fruit Agents ('IFA'), a
company incorporated in the Cayman Islands, with an address 'c/o GMCT'. In 1974 it
was sold to another Cayman company, Montagu Insurance Limited. However, between
1976 and 1980, Fruit Importers was the beneficial owner of funds held in a number of
accounts in Guinness and Mahon under the name of IFA. Mr McCann gave evidence that
these funds represented understated profits of Fruit Importers. Part of the funds in these
accounts was subsequently transferred to Fruit Importers, on whose books they appeared
as profit; the remainder of the funds was used to pay suppliers and to make bonus
payments to Fruit Importers personnel. In relation to this, the company has informed the
Inspectors that full disclosure of all relevant facts has been made to the Revenue
Commissioners. The Inspectors are of the view that although IFA was no longer a
subsidiary of Fruit Importers during this period, it was nevertheless available to Fruit
Importers as a nominee company or fund-holding company. The GMCT sundry sub-
company account in Guinness and Mahon shows a debit of £164.67 on 4 February 1975,
with the reference 'Intl. Fruit Agents'. The inference that arises from this is either that
IFA was receiving a payment from funds in GMCT, or that it was still managed at that
time by GMCT, and the sum in question represented management fees. The Inspectors
have formed the view that, on the balance of probabilities, Fruit Importers' Cayman
deposits were held in the name of IFA.

Appendix XV (44) refers.

45. Mr Arthur Gibney

Mr Arthur Gibney is a well-known Dublin architect. He has been a property developer

in consortia with others, which on a number of occasions included Mr Desmond Traynor.

Starting in the early 1970s, Mr Traynor placed monies representing Mr Gibney's share of
property development profits on deposit with Ansbacher in Cayman. Mr Traynor
suggested that it would be a good idea for Mr Gibney to have a family trust in Cayman.
Mr Gibney, while accepting that the creation of a trust had been mentioned to him, did
not accept that he had any knowledge of the actual setting up of a trust.
The Ansbacher deposit was used to provide security for property development loans from
Guinness and Mahon, and these loans were described as being 'suitably secured'. In the
mid-1970s' property crash, Guinness and Mahon wished to see Mr Gibney reduce the
level of his borrowings, and the Ansbacher trust deposit was used by Guinness and
Mahon to offset liabilities arising from development losses.

However, Mr Traynor told Mr Gibney, who had been under severe financial pressure,
that he had put aside an amount as security for his future. This amount was in an
Ansbacher / Hamilton Ross deposit account code A/A2, and the account remained in
existence in 1999.

Appendix XV (45) refers.

46. Mr Francis P Glennon, deceased

Mr Francis P Glennon (deceased) was the principal of the firm Frank Glennon Ltd. The
firm was engaged in the insurance business in Ireland. Mr Glennon retired from day to
day operational control of the firm in 1984 approximately but remained the Chairman
until his death in 1992. During his retirement, Mr Glennon resided in Spain.

The Inspectors are satisfied that Mr Glennon was the owner of substantial deposits with
Ansbacher after his retirement. A letter dated 7 January 1991 on Ansbacher notepaper
with an address for reply at 42 Fitzwilliam Square, under the signature of Mr Desmond
Traynor, is typical of the information available to the Inspectors. This letter seeks the
supply of a sterling draft of £380,000.00 to Mr Glennon from a specific account. This
indicates that, at that date, Mr Glennon was an Ansbacher client.

Appendix XV (46) refers.

47. Mr Paul Goode
Orbit Investments Ltd was a Cayman company with a registered address at the GMCT
Cayman office. It was used at various times for a number of persons apparently involved
in racehorse ownership and or training. One such person was Mr Paul Goode of Haras
de Clarbec, 14130 Pont L'Eveque, France.

By internal memo dated 1 June 1978, it is recorded that the beneficial owner of the
company is Mr Goode. The Cayman connection is evidenced by undated letter to Mr
Goode from an Irish executive of Orbit Investments Ltd, using Ansbacher's address in
Grand Cayman (PO Box 887). Guinness and Mahon provided the day-to-day
management of this company from Ireland.

Appendix XV (47) refers.

48. Mr Christopher Goosen

Mr Francis Christopher Goosen was co-founder, together with Mr Harry Lindsay, of
Super Ser Limited, in which he had a 50% shareholding. He worked in Dublin until 1970,
when he moved to England to run Super Ser's UK subsidiaries, Super Ser (UK) Limited
and Impact Heaters Limited.

Documentary evidence in the possession of the Inspectors showed that Mr Goosen had
made regular withdrawals from the Ansbacher accounts in Guinness and Mahon and
Henry Ansbacher & Co, London, between 1990 and 1991. In total, these amounted to
around STG£400,000. In his evidence on oath, Mr Goosen told the Inspectors that he had
no personal connection with Ansbacher. When the withdrawals referred to above were
put to him, he was unable to recall them, but thought they might be payments for the sale
of his shares in Super Ser, which, he said, Guinness and Mahon had brokered for him. He
said that he had sold the shares for £250,000 to an American company whose name he
was unable to recall. He could not explain why the withdrawals had been debited to
Ansbacher, but said he didn't know what methods of internal accounting Guinness and
Mahon might have had. When it was pointed out to him that the total amount of
withdrawals was greater than £250,000, he said that he thought the proceeds had been
invested. Pressed further on this point, he admitted that he knew they had, and that in fact
he had made an arrangement with the late Mr Desmond Traynor whereby Mr Traynor
would invest the proceeds of sale of the shares, and Mr Goosen could withdraw them as
and when required. Following the interview, Mr Goosen submitted an unsworn statement
to the Inspectors in which he said that the funds had been invested 'in an offshore
company in the Cayman Islands which Mr Traynor had set up'. Mr Goosen said he
understood that this was a legitimate procedure, and that where appropriate, the Cayman
company accounted for taxes.

Appendix XV (48) refers.

49. Ms Clare Griffin

Ms Clare Griffin was the partner of the late Mr Francis P Glennon, the former owner of
an Irish insurance brokerage. After Mr Glennon retired from day to day control of the
business, the couple lived in Spain.
From at least the year 1990, regular sums were paid to Ms Griffin from an account held
in Ansbacher through Guinness and Mahon. These funds were, on the balance of
probability, under the control of Mr Glennon so that at that time Ms Griffin was not
herself a client of Ansbacher.

Mr Glennon died on 1 April 1992. He was the owner of the A/A24 memorandum
accounts. These totalled STG£64,085 in December 1992. It is clear that this did not
represent the total fund available to Ms Griffin on the death of Mr Glennon as, in May
1993, substantial funds were transferred to Ms Griffin through Ansbacher's account in
IIB. These were a payment of STG £110,123.60 to herself alone in Guernsey together
with two sums of STG£50,000 to herself and her son jointly, one in Gibraltar and one in
Spain.

Substantial funds were available to Ms Griffin over and above her late partner's known
deposit and the benefit of such funds and interest thereon accrued to Ms Griffin.

The Inspectors, in pursuance of their duty to identify the clients of Ansbacher, sought the
assistance of Ms Griffin but have failed to contact her either at her last known Spanish
address or through her partner's former lawyer in Gibraltar.

Appendix XV (49) refers.

50. Mr James Griffin Jnr

Mr James Griffin Jnr with a former address at 9751, S.W. 99 t h Street, Miami, Florida, US
became a customer of Guinness and Mahon in 1987. A loan was negotiated in the sum of
US$75, 000.00 apparently secured by a second mortgage on his property. At all times,
however, the borrowing was backed by a deposit in the name of Ansbacher in
Guinness and Mahon which account was noted as 'Re; James Griffin Jnr'. The existence
of the backing deposit was omitted from the letter of offer. The loan is also described as
being 'suitably secured'. The borrowing was renewed from time to time for a number of
years.

Mr Griffin was written to c/o Moby Marine Corporation, a company that lists Mr Griffin
as a director. No reply was received.

Appendix XV (50) refers.

51. Mrs Jennifer Guinness

Mrs Jennifer Guinness is the widow of the late Mr John Guinness, a former chairman of
Guinness and Mahon and close friend of the late Mr Desmond Traynor.

Mrs Guinness told the Inspectors that in 1988, shortly after her husband's death, Mr
Traynor told her that her husband had established a trust in the Cayman Islands for her
benefit and that of their children. A copy of a Deed of Trust dated 15 January 1972 -
which also names the trustees as GMCT - confirms this. Mrs Guinness said that she had
not known of the existence of the trust prior to her husband's death.

Mrs Guinness said that Mr Traynor told her that if she needed money, she should ask him
for it. She availed of this facility from time to time. On some occasions, the money was
transferred to a bank account in her name in England. Documentary evidence shows that
these transfers were debited to the Ansbacher pooled account either in Guinness and
Mahon or in IIB. On other occasions she collected travellers' cheques from him at the
offices of CRH in Fitzwilliam Square.

Following a requirement made by the Inspectors, certain files relating to business

conducted with Ansbacher were furnished by NCB Stockbrokers of Dublin. All of the
files related to an entity called Aurum Nominees. NCB have explained to the Inspectors
that Aurum Nominees was a nominee account used by NCB for its clients. However,
each client had a different account number, and a separate individually identified bank
account, held in Ulster Bank, College Green, Dublin.

Among the Aurum Nominees files were a number of files relating to a client account
entitled Aurum Nominees Account 333034. This account was opened in 1989 by
amalgamating two portfolios formerly held in Guinness and Mahon in the name of
Overseas Nominees Limited, an Ansbacher nominee company. All instructions on the
account were given either by the late Mr Traynor, or by the late Mr John Furze, another
director of Ansbacher. Likewise, all information, account analysis, statements, etc, were
sent to Mr Furze or to Mr John Collins at Ansbacher. NCB opened an account in the
name of Aurum Nominees 333034 in Ulster Bank. At regular intervals, NCB would send
an IR£ cheque to Ulster Bank requesting a sterling draft for the equivalent amount. The
amount was debited to the Aurum 333034 account in the bank. The sterling draft was
made payable on each occasion to Ansbacher, sometimes by its earlier names, GMCT
and Cayman International Bank and Trust Company Limited.

In 1994, the account was closed, and, as is evident from documents relating to the closure
provided by NCB to the Inspectors, Mrs Guinness was the beneficial owner.

The Inspectors have examined a number of the sterling draft requests made by NCB at
the request of Mr Traynor. They have also examined, in the light of this information, the
documentary evidence concerning the transfer of funds and the payment of travellers'
cheques which are referred to at paragraph 3 above. From this examination, the following
emerges:

(a) On 4 December 1990, Mr Traynor asked IIB to make available

STG£4,600 worth of traveller's cheques in the name of Mrs
Guinness, and to debit the sterling cost to an Ansbacher account.
On 7 December 1990, Mr Traynor wrote to NCB, ref. Aurum
Nominees a/c 333034, asking ' in connection with a request from
the above Client' for a cheque in the sum of STG£4,600.81,
payable to Ansbacher. On 10 December 1990, NCB wrote to
Ulster Bank requesting the sterling draft, and asking the bank to
debit the amount to Aurum Nominees account 08393100, which
was the account number in Ulster Bank of Aurum Nominees
333034.

(b) On 13 December 1991, Mr Traynor wrote to NCB re Aurum

333034 thanking them for sending him STG£15,000 'for the above
Client'. On the same date, Mr Traynor wrote to IIB asking them to
transfer STG£15,000 to Mrs Guinness's account at an English
bank.
(c) On 1 February 1993, Mr Traynor wrote to NCB ref. Aurum
333034, saying that the 'client has requested some funds' and
asking for a draft for STG£5,000 payable to Cayman International
Bank and Trust Company Limited. On 8 February 1993, Mr
Traynor wrote to IIB asking them to transfer STG£5,000 to an
account in the name of Mrs Guinness in England, debiting the
amount to a Hamilton Ross account in IIB. (Hamilton Ross
accounts in IIB held money that had previously been held in
Ansbacher accounts in the same bank.)

(d) On 2 March 1993, Mr Traynor wrote to NCB re Aurum 333034

thanking them for a draft in the sum of STG£6,000. A letter of the
same date from NCB makes it clear that the draft is payable to
Cayman International Bank and Trust Company Limited. On 3
March 1993, Mr Traynor wrote to IIB asking them to transfer
STG£6,000 to an account in Mrs Guinness name in England,
debiting the amount to a Hamilton Ross account.

The Inspectors are therefore satisfied of the following matters: Mrs

Guinness held stocks and shares in a portfolio managed by Ansbacher.
From time to time, funds that were the proceeds of the sale of shares in the
portfolio were lodged to an account in Ulster Bank. Money from that
account, of which Mrs Guinness was the beneficial owner, was converted
from time to time to sterling drafts payable to Ansbacher. These
transactions frequently coincided, both as to date and as to amount, with
transfers made from Ansbacher accounts in IIB to Mrs Guinness, or
travellers cheques issued to her and debited to Ansbacher's account in IIB.
The Inspectors are satisfied therefore that money being paid to Mrs
Guinness from an Ansbacher account was funded by money coming from
an account in the name of Aurum Nominees, of which she was the
 beneficial owner. Their view is reinforced by a letter from Mr Traynor to
NCB on 20 January 1992, in which he explains 'we have recently
organised some travellers cheques for the above client, and in order to
reimburse us for this I would be grateful if you could organise to let me
have a U.S. Dollar draft ... payable to Ansbacher Limited. '

Appendix XV (51) refers.

52. Mr John Guinness, deceased

The late Mr John Guinness was a director and chairman of Guinness and Mahon, and a
close friend of the late Mr Desmond Traynor.

Mr Guinness's widow, Mrs Jennifer Guinness, gave evidence on oath to the Inspectors.
She said that in 1988, shortly after her husband's death, Mr Traynor told her that her
husband had established a trust in the Cayman Islands for her benefit and that of their
children. A copy of a Deed of Trust dated 28 January 1972 - which also names the
trustees as GMCT - confirms this.

Appendix XV (52) refers.

53. Mr Frank Hall

Mr Frank Hall appears to have been a resident of the United Kingdom, and appears to
have been linked to Sentinel Vehicles Ltd of Woolmer Industrial Estate, Barden,
Hampshire.

In 1982, he wished to take part in a venture together with a Mr Pieter Totte, another UK
resident. The method of his proposed participation was explained in a letter from Mr John
Collins of GMCT to Mr Totte. Essentially, GMCT was to provide a bank guarantee to
Midland Bank plc to cover borrowings by Mr Totte's company, Sentinel Vehicles
Limited. Mr Collins indicated that the guarantee would probably come from
Guinness and Mahon. For the guarantee, GMCT was to receive twenty-five percent of
the issued share capital of Sentinel Vehicles, which was to be issued in the name of
Beech Realty Company Limited, a GMCT company of which Mr Hall was the beneficial
owner.
In January 1982, Mr John Collins of GMCT wrote to the late Mr Desmond Traynor to
indicate that he might need a bank guarantee for £35,000 from Guinness and Mahon
'to cover Frank Hall's latest investment'. On 4 June, a guarantee in that amount was
furnished by Guinness and Mahon to Midland Bank plc. On 8 November 1982, a memo
from Mr Collins to Mr Traynor stated under the heading 'Frank Hall/Beech':

What we would like to do now is that G&M pay the £35,000 to Midland for A/C Sentinel
for release of guarantee and remit a further £20,000 to the company's lawyers trust
account for sentinel and receive back from Sentinel a Debenture for £75,000. We or
Frank have already paid £20,000. We will forward to you cash as backing deposit
£50,000 and you will treat previous £20,000 as remitted through you to obtain total
backing deposit of £75,000. Turn between loan and deposit we have told Frank will be
1%0.

From the above, the Inspectors infer that the GMCT funds backing the Sentinel Vehicles
Limited Ltd loan in Guinness and Mahon were beneficially owned by Mr Hall.

Appendix XV (53) refers.

54. Mr Charles J Haughey

Mr Charles J Haughey is a former Taoiseach.

At the same time as the Inspectors were conducting their inquiries into the Company, a
Tribunal of Inquiry into payments to Mr Haughey and Mr Lowry was sitting (the
Moriarty Tribunal). The Inspectors were aware from the terms of reference of that
Inquiry and from public reports of its proceedings that many matters touching on Mr
Haughey's finances were the subject of that Inquiry. However, in the context of the
Inspectors' own terms of reference, as there is no evidence to suggest that Mr Haughey
played any part in the management of the Ansbacher, the Inspectors limited their
investigation of him to the extent only that he was a client of the Company.

It had been the intention of the Inspectors to interview Mr Haughey at the conclusion of
his evidence to the Tribunal of Inquiry, headed by Mr Justice Michael Moriarty. Prior to
that evidence concluding, Mr Haughey's health deteriorated to such an extent that the
concluding tranche of his evidence to the Moriarty Tribunal was conducted in private on
commission. This evidence was subsequently read into the public record and forms part
of the evidence before the Tribunal.

On a requirement from the Inspectors for assistance, Mr Haughey forwarded a medical

report from his medical advisors. This was considered by the Inspectors, who formed the
view that the potential benefit to their Inquiry of the compulsory attendance of a person
who had a marginal involvement in the general Ansbacher scheme, (in so far as it related
to the company's alleged wrongs), was not of such importance as to warrant the use by
the Inspectors of their powers of requirement. This conclusion was assisted by the
acceptance by Mr Haughey that evidence given by him at the Tribunal of Inquiry, then
under way, could be availed of by the Inspectors in assessing whether Mr Haughey was a
client of Ansbacher.

Mr Haughey has agreed in evidence to the Moriarty Tribunal, (day 88 Q.133 to 136), that
he and his wife jointly sought the permission of the Central Bank for a foreign currency
loan, in the sum of the sterling equivalent of IRL£400,000. A letter addressed to the
Manager, Exchange Control, Central Bank of Ireland dated 8 December 1982, was read
into the record as follows:
I wish to make application on behalf of Abbeyville Stud for permission to borrow
Sterling. The details are as follows:

1. The bank: Guinness Mahon Cayman Trust Ltd, PO box 887, Grand Cayman
British West Indies.
2. The amount: The sterling equivalent of400,000 Irish.
3. The purpose: Primarily development and commercial development of the stud.
4. Drawdown in amounts of 100,000 between 1st January 1983 and 31st January
1983.
5. Repayment: Full amount on the 31st January 1985.
6. Interest: Interest payable half-yearly will be at 1% over the cost of the three-
month funds.
7. Security: Joint and several guarantees of C J Haughey and Maureen Haughey.

The title deeds of stud will be deposited with Mars nominees Limited, 17 College Green,
on behalf of Guinness Mahon Cayman Trust Limited and an undertaking given to
formalise the security should this be required.

I am enclosing an extra copy of this letter for your convenience.

Yours faithfully, Charles J Haughey.'

The sum was apparently borrowed as STG£350,000 as two years later in January 1985 a
letter was sent to Mr Haughey at his home from GMCT as follows;

'Dear Sir

Re loan extension -2 years- Sterling£350,000. We refer to our recent telephone

discussion in connection with the extension of the present facility. We confirm that we
are willing to extend 350,000 sterling on the following terms and conditions.
Amount: Sterling £350,000. Repayment in full by 31st December 1984.

Interest: Payable quarterly at cost of 1% over 90 day funds.

Security: We will continue to retain the joint and several guarantee of Charles J
Haughey and Maureen Haughey. The guarantees will continue to be supported by the
title deeds presently held.

We should be grateful if you would:

1. Have a copy of this facility letter signed by both yourself and your wife.
2. Arrange for the Central Bank of Ireland approval to be stamped on the copy of
this letter.

Having had the above documentation completed, we would be grateful if you would hand
them to Des Traynor for onward transmission to us.

Yours faithfully John A Furze.'

Mr Haughey confirmed to the Moriarty Tribunal the above facts, and the validity of his
own and his wife's signatures, written on the above document (day 88 Q. 158 and reply).
No evidence has been adduced as to whether this loan was repaid. This appears to have
been accepted by Mr Haughey at day 88 Q. 192 to 202 of his evidence.

Earlier Mr Haughey had been questioned about the source of a lodgement of funds in
January 1983. The funds in question, IRL£200,000, had its origin in a GMCT sundry sub
account (day 86 Q. 65 to 68). It is possible that this represented a partial draw-down of
the loan documented above although Mr Haughey submits that this is not completely
clear.
In any event, the above evidence given by Mr Haughey to the Moriarty Tribunal and
accepted by him as accurate for the purpose of this inquiry shows that Mr Haughey was
himself a client of GMCT (subsequently renamed Ansbacher).

Consistent with the Inspectors' approach to the identification of other clients of

Ansbacher, once the connection with Ansbacher was established, further investigation of
the personal affairs ceased as being not relevant to this Inquiry. The full investigation of
these issues is properly left to the Moriarty Tribunal. Two pieces of evidence were,
however, disclosed to the Inspectors, which tend to show that at least some of the money
available to Mr Haughey was under his effective control. A payment was made from an
Ansbacher account of IRL£10,000 to a Mr Conor Haughey in September 1992 and a
further sum of IRL£15,000 in November of that year from Hamilton Ross. Mr Conor
Haughey is of the view that this was assistance from his father (C J Haughey) in the
building of his house.

Appendix XV (54) refers.

55. Mr Gerald Hickey, deceased

Mr Gerald Hickey had retired from business before he died in 2001. During his career as
a practising solicitor he was the chairman of the Hickey Beauchamp O'Reilly legal firm,
from which he retired in 1979. He was also a non-executive director of a number of
corporate entities including The Industrial Credit Corporation, CRH plc and New Ireland
Assurance.

He came into contact with Mr Desmond Traynor from about 1969 when they were both
directors of New Ireland Assurance, and thereafter acted as a solicitor to Guinness and
Mahon. He also took part in meetings with Mr Traynor in which clients of Guinness and
Mahon were advised on aspects of offshore trusts.
Mr Hickey also undertook a number of property developments and had borrowings from
Guinness and Mahon in relation to these, some of which were described in Guinness and
Mahon documentation in the 1970s as being 'suitably secured'.

At some stage early in the 1970s Mr Hickey, who claimed to be in a consortium with two
non- resident foreign nationals, although that claim was later withdrawn, acquired a
property in Abbey Street, Dublin through an Irish company called Clonmel Estates
Limited. Besides being a director of the company, Mr Hickey also acted as solicitor to
it, and when the property was sold, acted as liquidator to the company. He explained that
he distributed the value of the shares by giving the proceeds to Guinness and Mahon who
deposited it with GMCT / Ansbacher.

The creation of this deposit, which appears to have been controlled by Mr Hickey, is
evidenced by a minute of a Guinness and Mahon lending committee on 4 November
1971, in which the impending receipt of the funds is noted, as is a proposal to make
available to Mr Hickey an overdraft facility secured on a back-to-back basis against the
deposit. Subsequently, on 16 November 1971, Guinness and Mahon wrote to Mr Hickey
offering a facility.

Appendix XV (55) refers.

56. Mr Jorge Hine & Mrs Margo Hine

Jorge Hine and Margo Hine are two residents of the US who negotiated loans with
Guinness and Mahon in the mid 1980s. These loans were backed by funds in GMCT.
In common with other US based borrowers the GMCT connection was referred to openly
in Guinness and Mahon records.

One such reference is in the list prepared by M J Pender for London office on 24
December 1986 in which J & M Hine are noted as owing 101,000 (currency unspecified)
which is stated to be backed by a GMCT deposit.
In a schedule supplied to the Central Bank of Ireland relating to hypothecated loans at 31
December 1988, the loan and deposit are entered as US$ to the value of IR £63,000.
Other documents set out below reinforce the connection.

Appendix XV (56) refers.

57. Mr Denis A Jackson

Mr Denis A Jackson of 7, Vesey Place, Monkstown, Co Dublin is a dentist. At all
relevant times, Mr Jackson was non-resident in this jurisdiction.

Mr Jackson was identified by Mr Jack Stakelum (under a requirement from the

Inspectors) as a client who had money on deposit through Mr Stakelum. In addition to
the foregoing there are two Ansbacher documents, which identify Mr Jackson by name.

The Inspectors are satisfied that this evidence taken together enables a determination to
be made that Mr Jackson was a client of Ansbacher.

Appendix XV (57) refers.

58. Mr Thomas Jackson

Mr Thomas Jackson was a director of Monarch Properties Limited, a property
development company, in the 1970s. A 1976 telex from Mr Desmond Traynor to Mr John
Furze of GMCT, showing that Mr Jackson had at that time an account in GMCT, is in the
Inspectors' possession. This telex indicates that instructions regarding Mr Jackson's
account were given by Mr Frank Lee, another director of Monarch Properties Limited.
59. Jamila Pty Ltd.
Jamila Pty Ltd had a loan with Guinness and Mahon in 1981. This loan was backed with
funds lodged to GMCT. Jamila Pty Ltd is also the ultimate holding company of Wilson
Bishop & Co Pty Co Ltd. This latter company had borrowing in its own right from
Guinness and Mahon with a Cayman Island connection.

Appendix XV (59) refers.

60. Mr William Kearney, deceased

The late Mr William Kearney was an obstetrician who resided at 'Beechwood', College
Road, Cork. Documentation from 1976 shows that he had a deposit account in GMCT at
that time.

Appendix XV (60) refers.

61. Mr John Kennedy

Mr John Kennedy is a director of Sheelin Homes Limited. He has been involved in the
building trade since the late 1960s.

In his evidence on oath to the Inspectors, Mr Kennedy said that he established a trust in
the Cayman Islands in 1986, following discussions with the late Mr Desmond Traynor.
The trust funds were held by Penta Investments Limited, a company incorporated in the
Cayman Islands. Documents in the possession of the Inspectors, including a document
dated 6 December 1993 and signed by John Furze, show that the monies held by Penta
were on deposit in Ansbacher's bank in the Cayman Islands. In his evidence to the
Inspectors, Mr Kennedy accepted that this was the case. Mr Kennedy was advised by
someone in Guinness and Mahon (he is uncertain whether it was Mr Traynor or another
person) that he could choose the currencies in which he wished his funds to be held. He
chose the currencies that appeared profitable from time to time. Mr Kennedy said that Mr
Traynor told him that if he would entrust him with his money, Mr Traynor would treat it
in such a way that if questions were asked, the money would be outside Mr Kennedy's
control. However, Mr Kennedy and Mr Traynor would have an understanding whereby
Mr Traynor would make the money available to Mr Kennedy whenever he wished. The
scheme depended upon Mr Kennedy placing total trust in Mr Traynor, as Mr Kennedy
would have no legal control over the funds.

Appendix XV (61) refers.

62. Dr Colm Killeen

Dr Colm Killeen is a general medical practitioner and was a near neighbour of Mr
Desmond Traynor.

From around the early 1980s, Dr Killeen gave Mr Traynor money to place on deposit, but
it was not until 1992 that he learned that his money was with Ansbacher.

Appendix XV (62) refers.

63. Mr Richard Lawes

Mr Richard Lawes, formerly of Crispians, White House Road, Bayleys Hill, Sevenoaks,
Kent was a businessman engaged in a number of businesses in this jurisdiction over many
years. Mr Lawes died in the United Kingdom on 2 February 1997.

A company Picton Investments Ltd (later Olympic Investments), with an address in the
Cayman Islands, c/o Ansbacher, held the legal ownership of shares in Connacht Foods
Ltd. Documentary evidence connects the two companies, in particular the payment of
dividends to Picton Investments Ltd by Connacht Foods Ltd. Money so received was
placed on deposit in Guinness and Mahon as early as 1976. Ansbacher was the entity
that issued the instruction concerning the deposit. Mr Padraig Collery testified that Mr
Lawes (whose first name he did not know) had a connection with these funds. Mr
Collery also expressed the view that the relationship between Picton Investments Ltd and
Guinness and Mahon was direct and did not involve Ansbacher. This is clearly incorrect
as documents below demonstrate. The Inspectors are satisfied that the beneficial owner
of the funds was, on the balance of probability, Mr Lawes.

Appendix XV (63) refers.

64. Mr Frank Lee

Mr Frank Lee, who resides at 2, Perrier Drive, Rochestown Road, Cork, was company
secretary of Westboro Investments Limited.

A GMCT memo (which, although unsigned, is so identified by its telex code and cable
address, 305 Guinness CP) refers to a deposit in the name of Mr Lee.

Appendix XV (64) refers.

65. Mr Michael Leyden, deceased and Mrs Dorothy Leyden

The late Mr Michael Leyden and his company Leyden Farms Limited, a UK based
company, had a business relationship with Mr Jack Stakelum which involved the deposit
of funds through Mr Stakelum with Ansbacher. After Mr Leyden's death in the mid
1980s Mr Leyden's widow Mrs Dorothy Leyden had a continuing business relationship
involving Ansbacher funds until at least June 1991.

Leyden Farms Limited was incorporated in 1975 in England. The shareholders were
Michael Leyden and Leyden Securities (Scunthorpe) Limited. The Directors were
Michael Leyden and Dorothy Leyden who took the shares into their own names in 1977.
The company continues to trade under a new name and ownership since 1991 but the new
owners appear not to have an Ansbacher connection.

Funds were given to Mr Stakelum to place on deposit. These instructions were

implemented in such a way that the funds were invested offshore through Ansbacher.
Back-to-back loans were given to Leyden Farms Ltd in the 1976 to 1978 period.

Appendix XV (65) refers.

66. Mr James Henry Lindsay

Mr James Henry (Harry) Lindsay is a former director of and 50% shareholder in Super
Ser Limited ('Super Ser').

Mr Lindsay told the Inspectors that in 1986, while working in Bangladesh, he wished to
assure the college fees of his children who were studying in the United States. He
contacted the late Mr Desmond Traynor, whom he knew as a result of Super Ser's
dealings with Guinness and Mahon . Mr Traynor told him to give him the money and he
would look after it. Mr Lindsay gave him his Bangladesh earnings and Mr Traynor
deposited them with Ansbacher. Mr Lindsay continued to pass his earnings from
Bangladesh to Mr Traynor, and whenever he needed money to pay fees or other bills for
his children he would telephone Mr Traynor and the latter would withdraw it from
Ansbacher's account in Guinness and Mahon and subsequently in IIB. Mr Lindsay closed
his account on 31 March 1994 when his children had finished college. It would appear
that all the funds in Mr Lindsay's account came from a source outside Ireland and were
used exclusively abroad.

Appendix XV (66) refers.

67. Mr Joseph Clayton Love Junior

Mr Joseph Clayton Love Junior is a property developer and a former non-executive
director of Guinness and Mahon.

Mr Love told the Inspectors that, upon the advice of the late Mr Desmond Traynor, he
established a trust (known as the Elizabeth Love trust) on 23 April 1971 in the Cayman
Islands, in order to make provision for his wife and children in the event that he lost his
assets as a result of personal guarantees being called in. He consulted his own
accountants Haughey Boland about the matter. Mr Traynor organized all the formalities.
The named settlor in the trust Deed was Mrs Elizabeth Love, Mr Love's wife. The trust
deed shows that Mr Love himself was a member of the class of beneficiaries. The trust
was funded by the assets of a Channel Islands trust (the Clayton Love trust), which trust
held Mr Love's shares in a property development company called Wildwood
Investments. The Inspectors are satisfied, (and Mr Love himself agrees) that he was the
wealth generator for the trust. The Inspectors are therefore satisfied that Mr Love, not his
wife, was the person who caused the trust to be funded.

The trust funds were held by a company called Yale Securities Limited, and placed on
deposit with Ansbacher, where they were held in a number of accounts coded 'M'. Mr
Love told the Inspectors that Mr Traynor gave him annual statements of affairs of Yale.

Mr Love also told the Inspectors that at the time the trust was established, Mr Traynor
agreed with him that he could borrow from the trust. In Mr Love's own words: 'When the
trust was set up it was agreed that I use or I borrowed, I think, in the early mid 1970s
when things were not too good, I borrowed money at that time from the trust and then I
did nothing really until the early 1990s.' There was a surprising informality in what were
substantial loan arrangements. Nothing was reduced to writing. Mr Love says that there
was an oral agreement with Mr Traynor that repayments would be made at a commercial
rate of interest. However, no arrangement whatever appears to have been made as to the
term of the loan, and indeed, at the date of Mr Love's evidence to the Inspectors on 8
March 2000, he had made no repayments to the trust, either of capital or of interest. Upon
receipt of the Inspectors preliminary conclusion that Mr Love was a client of Ansbacher,
his solicitors informed the Inspectors by letter dated 7 December 2001 that Mr Love had
repaid capital and interest to Yale in or about August 2000, some five months after he
had given his sworn evidence.

A further Ansbacher involvement concerns a consortium formed to carry out a

development near Phoenix, Arizona, in the US. Upon the advice of Mr Desmond Traynor
of Guinness and Mahon, a scheme was constructed involving the establishment of a
discretionary trust, (the Lynbrette Trust) of which GMCT was the Trustee. The Trust had
as beneficiaries five Cayman companies. Four of these represented the interests of four of
the participants. The fifth individual involved was Mr Love, and the fifth company was
Yale, but Mr Love has submitted that in the consortium he represented the interests of
Yale rather than the converse. In fact, the assets risked in the venture were trust assets in
the legal ownership of Yale. Mr Love appears to have made all the decisions in relation
to the venture, and indeed never had any contact with the trustees throughout the life of
the trust.

The Inspectors are satisfied that Mr Love's ability to borrow in an informal manner from
the trust over such a lengthy period without any request for repayment being made until
August 2000 indicates that he had de facto control over the funds of the trust. The
involvement of Yale in a property venture in which it was represented by Mr Love, and
in which the trustees of the Elizabeth Love trust were not involved, taken together with
the fact that Mr Traynor provided Mr Love with an annual statement of affairs of Yale,
indicates that Mr Love had de facto, if not de jure control of Yale. The Inspectors are
satisfied that the fact that Mr Love caused the trust to be funded, Mr Love's de facto
control of the trust funds and his de facto control of the company which held the trust
funds and which had an account with Ansbacher, makes Mr Love himself a client of
Ansbacher.
68. Mr Bryan Lynam
Mr Bryan Lynam is the son of Mr Edward Lynam.

In February 1994, Mr Edward Lynam instructed that his Ansbacher deposit (A/A5) be
transferred jointly into the names of his son and daughter. At some point in the early
1990s, Mr Desmond Traynor arranged matters so that the deposit was routed through
Hamilton Ross. In February 1995, Mr Padraig Collery was instructed by Mr and Ms
Lynam to transfer the monies on deposit to another bank, and close the account.

Appendix XV (68) refers.

69. Mr Edward Lynam

Mr Edward Lynam is a former builder who spent most of his career in E & J Lynam
Properties Limited in partnership with his brother, Mr James Lynam.

Mr Edward Lynam opened a joint deposit account with his brother in GMCT / Ansbacher
at the suggestion of Mr Desmond Traynor in 1979. In 1987 the account was split into
separate accounts for his brother and himself, coded A/A5. At some point in the early
1990s Mr Desmond Traynor arranged matters so that the deposit was routed through
Hamilton Ross. The account remained in operation until Mr Lynam instructed it be
transferred jointly into the names of his son and daughter in February 1994.

Appendix XV (69) refers.

70. Ms Eileen Lynam

Ms Eileen Lynam is one of two daughters of Mr James Lynam. The Inspectors have
found Mr Lynam to be a client of Ansbacher.
In June 1995, Mr Lynam, who was becoming increasingly unwell, decided to sub-divide
his Ansbacher deposit account, number A/A5-A, into three separate accounts in order that
his daughters and he could withdraw funds when required. Ms Eileen Lynam's account
was given the number A/A5-G, and her father told her the value of the opening deposit.
She knew the deposit was held in an offshore account in the Cayman Islands, but did not
at that time know the name of the bank.

Ms Lynam told the Inspectors that she continued to withdraw money from her account in
a similar manner to that operated previously by her father. She closed the account in
1997.

Appendix XV (70) refers.

71. Mr James Lynam, deceased

The late Mr James Lynam of 18 La Vista Avenue, Sutton, Co. Dublin was a partner in E
& J Lynam Properties Limited together with his brother Edward. As Mr Lynam was ill at
the time of the Inspectors' investigation, his daughter agreed to give evidence on his
behalf. Ms Lynam confirmed the matters set out in her father's unsworn statement. Her
knowledge of her father's affairs results from conversations she has had with him, and
from a search through his papers, which she conducted.

In August 1979, following a discussion with the late Mr Desmond Traynor, Mr Lynam
gave him money to invest jointly for himself and his brother Edward (see entry under
heading Edward Lynam) in the Cayman Islands. Documentation in Mr Lynam's
possession shows that the money was invested with GMCT. Mr Lynam maintains that it
was not a trust, in spite of references in documentation to a letter of wishes. In 1987, this
account was divided in two, one account (coded A/A5-A) being for the benefit of James
and the other for that of his brother. From 1990 onwards, Mr Lynam made regular
withdrawals, which were always in cash. In 1995, he divided the money into three
accounts, two of which were for the benefit of his daughters.
Appendix XV (71) refers.

72. Ms Mary Lynam

Ms Mary Lynam is one of two daughters of Mr James Lynam. The Inspectors have
found Mr Lynam to be a client of Ansbacher.

In June 1995, Mr Lynam, who was becoming increasingly unwell, decided to sub-divide
his Ansbacher deposit account, number A/A5-A, into three separate accounts in order that
his daughters and he could withdraw funds when required. Ms Mary Lynam's account
was given the number A/A5-D, and her father told her the value of the opening deposit.
She knew the deposit was held in an offshore account in the Cayman Islands, but did not
at that time know the name of the bank.

Ms Lynam told the Inspectors that she continued to withdraw money from her account in
a similar manner to that operated previously by her father. She closed the account in
1997.

Appendix XV (72) refers.

73. Mrs Hedli MacNeice, deceased

The late Mrs Antoinette Millicent Hedli Anderson MacNeice, widow of Louis MacNiece,
was up to 1978 a resident of Kinsale, Co. Cork. She died in France in 1990. In 1978, she
had a personal loan from Guinness and Mahon which was secured on a deposit of funds
from GMCT, as is clear from a Guinness and Mahon loan decision memorandum of 31
May 1978. She also withdrew money through Guinness and Mahon from time to time,
and the withdrawals were debited to GMCT's account in Guinness and Mahon.
74. Ms Mary Meagher McCarroll
Ms Mary Meagher McCarroll is an architect now residing in Dublin. She is the widow of
the late Mr Patrick McCarroll (see entry under that heading). Ms McCarroll resided
outside Ireland from January 1987 to April 1991, and again from September 1992 to May
1995.

In evidence given on oath a short time before his death, Ms McCarroll's husband told the
Inspectors that when he was about to take up employment in Sudan in 1978, he asked
Guinness and Mahon to assist him in the setting up of an offshore account, as he believed
he would then have non-resident status and would not be liable to pay Irish tax. Mr
McCarroll initially believed his money was in Guernsey, but accepted when shown
documentation that it was in Ansbacher, and was coded A/A43P.

Mr McCarroll further informed the Inspectors that after his marriage, he and Ms
McCarroll were working in the United States. He therefore asked Mr Padraig Collery to
set up an offshore account for her also. Documentary evidence indicates that this account
too was in Ansbacher, and was coded A/A43M. Both accounts were closed in 1993.

Appendix XV (74) refers.

75. Mr Patrick McCarroll, deceased

The late Mr Patrick McCarroll was an architect who worked in various places around the
world during his career. He qualified in 1976 and worked in Dublin until 1978, when he
went to Sudan. In 1982 he went to Baghdad. He then worked in Nairobi for a number of
years. He was in Ireland from 1986-87, and spent the following two and a half years in
the US. He then worked in Portugal for a couple of years. From 1990-1992 he was back
in Ireland. He was in Oman from 1992-1994 and was since engaged in project
management consultancy in Eastern Europe. He bought a house in Ireland in 1993 and
lived there with his wife and child from 1995 until his death in 2000.

In his evidence given on oath shortly before his death, Mr McCarroll told the Inspectors
that when about to take up employment in the Sudan in 1978, he asked Guinness and
Mahon to assist him in the setting up of an offshore account, as he believed he would
then have non-resident status and would not be liable to pay Irish tax. Mr McCarroll
believed initially that his money had been in Guernsey, but accepted when shown
documentation that some of the statements relating to his funds are headed 'GMCT'. It
would appear that his funds, in common with those of many persons whose funds were
managed by College Trustees, were deposited subsequently in Ansbacher without his
knowledge. Documentation shows that his funds were coded A/A43P.

Appendix XV (75) refers.

76. Mr Liam McGonagle, deceased

Mr Liam McGonagle was a well-known solicitor practising as one of the partners in a
Dublin legal firm. He was also involved with others in property investment. His firm had
a normal solicitor - client relationship with the company under investigation. This is not
the focus of the Inspectors' interest in Mr McGonagle.

Mr McGonagle died unexpectedly on 14 November 1999 and the Inspectors have had to
assess his possible involvement in the absence of his testimony. The Inspectors received
the cooperation of Mr McGonagle's widow, friend Mr Desmond Turvey and his legal
partners and wish to record their thanks for the assistance given.

There are many apparent contact points between Mr McGonagle and Ansbacher but the
Inspectors have been conscious that some of these may have arisen because the late Mr
McGonagle acted for clients rather then in a personal capacity. There were a number of
transactions, however with which Mr McGonagle was personally involved.
Camille Investments Limited was an Irish registered company owned by Mr McGonagle.
Prior to its dissolution in 1988, this company had four registered shareholders. Two of
these were obviously £1 nominee holders with £98 ordinary shares held by Guinness
Mahon Jersey Trust Limited. The only other shareholder was Liam McGonagle, who
had 4,500 preference shares. It is clear that Mr McGonagle was the beneficial owner of
all the shares. By letter dated 30 March 1988 (attached hereto) Mr McGonagle informed
Guinness and Mahon of his exclusive ownership of the Company. Mr Desmond Turvey,
a long-time associate of Mr McGonagle, has confirmed this conclusion.

An internal memo of Guinness and Mahon 16 August 1978 from Mr Desmond Traynor to
Mr P O'Dwyer (attached hereto) deals with a request by Mr Turvey, for a short-term
facility for Camille Investments Limited. Mr Turvey was the company secretary of
Camille. This memo refers to the situation as being a 'suitably secured' situation. It
further refers to the holding of $300,000 on deposit from GMCT in this context. Mr
Turvey has confirmed that the source of this back-to-back security was British Isles
Investments Limited a Cayman company owned by British Isles Trust, which is a trust
whose beneficial owner was Mr McGonagle.

Further a letter from Mr Martin Lanigan-O'Keefe to Ansbacher for the attention of Mr JD

Traynor dated 11 May 1990, set out account details requested by Ansbacher. It appears
to be a list of borrowers from Guinness and Mahon in respect of which back-to-back
loans existed. In any event the supplying of such information by Guinness and Mahon to
Ansbacher, implies that those listed were clients of Ansbacher, as that firm could not be
entitled to that information except they had a client relationship with those listed. Mr
McGonagle's name is on the list supplied.

Mr McGonagle also had an involvement with the following entities that also used the
services of Ansbacher:

Kinsale Yacht Charters Limited

Beresford Investments Limited

These involvements were not necessarily exclusive.

Appendix XV (76) refers.

77. Mr Sean McKeon

Mr Sean McKeon, of 163, Howth Road, was involved for many years in property
development and building.

Around 1986, he permitted a discretionary trust to be established in the Cayman Islands,

at the suggestion of Guinness and Mahon. He signed some papers including a letter of
wishes. GMCT managed the trust (he believed). Mr McKeon received periodic
statements from Guinness and Mahon with the name 'Tara' on the top. This is believed
to be a holding company called Tara Securities Ltd, even though Mr McKeon thought it
was the name of the trust. Mr McKeon's investment was by way of various currencies
including US Dollars, Pounds Sterling and Deutschmarks.

Mr McKeon terminated his relationship with Ansbacher in 1994 when, by letter of

7 January 1994 to IIB, he withdrew all his funds. Mr McKeon has requested the
Inspectors to indicate that the funds were withdrawn in order to make a payment to the
Revenue Commissioners under the Tax Amnesty.

Appendix XV (77) refers.

78. Thomas J Mc Laughlin, deceased
Mr Thomas J McLaughlin late of 21 Finsbury House 79/81 Pembroke Road, Ballsbridge,
Dublin 4 was a businessman who died 3 January 2000. His executors supplied
information to the Inspectorate when requested.

Mr McLaughlin was involved with another person in purchasing a property in Portugal

through Ansbacher using a trust mechanism and a Cayman Island company, Coral Reef
Securities Limited.

He also entrusted a substantial sum of money to Mr Desmond Traynor to be put on

deposit. This was done through Ansbacher and Hamilton Ross.

It was submitted that the fund in question was provided by Mr McLaughlin from after-tax
gains and tax-exempt income. It was asserted on Mr McLaughlin's behalf that he had no
knowledge that the sum of money he entrusted to Mr Traynor had been placed on deposit
with Ansbacher until after Mr Traynor's death. It was further submitted that when Mr
McLaughlin became aware of this in 1998, he took steps to have the fund repatriated to
Ireland, and made contact with the Revenue Commissioners on a voluntary basis to
ensure that any relevant taxation liability in relation to the interest earned on the fund was
discharged.

Appendix XV (78) refers.

79. Mr Patrick McNamee

Mr Patrick McNamee is a former Deputy Chief Executive of Fyffes plc. He is now
retired. A number of Guinness and Mahon loans made in 1988 to members of Mr
McNamee's family and to his secretary were guaranteed by Mr McNamee. The
Guinness and Mahon credit committee recommendations in respect of these loans note
'the guarantee given may be taken as adequate to the extent of £50,000'. A letter dated
11 May 1990 Guinness and Mahon to the late Mr Desmond Traynor at 'Ansbacher, c/o
42 Fitzwilliam Square' attaches a schedule which the letter describes as 'the account
details requested'. Mr McNamee's name appears on this with the notation '£50,000 (as
Guarantor for various facilities)'. A second letter dated the 8 April 1991, same to same,
attaches a similar schedule, this time described as a schedule of balances.

Mr McNamee told the Inspectors that in 1985 he was awarded a large bonus payment by
Fyffes, nett of tax. He stated that he received in total £100,000, which was lodged in
either two tranches of £50,000, or three tranches of £40,000, £10,000 and £50,000. The
funds were not made available to him directly. Instead, upon the advice either of Mr Neil
McCann, a director of Fyffes, or of Mr McCann's son Carl, who was the financial
director of Fyffes at that time, he contacted Guinness and Mahon where he met Mr
Padraig Collery. From then on, Mr McNamee contacted Mr Collery whenever he
wished to make a withdrawal from the funds, even after Mr Collery's departure from
Guinness and Mahon in 1989. He said that did not know where the funds were deposited,
but assumed they were in Guinness and Mahon. A letter dated 19 July 2000 to Mr
McNamee from Mr Michael Clerkin of Fyffes confirms that a sum of £50,000 was paid
to him towards the end of 1985, but regrets that the underlying documentation no longer
exists. Mr Clerkin encloses an AIB bank statement in the name of Fyffes, which records a
debit of £40,000 on 14 May 1985. Mr Clerkin believes that this was another part of the
payment to Mr McNamee. There is some confusion in Mr McNamee's mind as to how he
received the remaining £10,000, but he is certain that he did receive it.

The Inspectors are satisfied that on the balance of probabilities the £50,000 in respect of
which Guinness and Mahon wrote to Ansbacher, and in respect of which his guarantees
for loans to family and an employee were described as 'considered adequate' is one and
the same as the £50,000 paid to Mr McNamee by Fyffes in 1985. However, Mr
McNamee told the Inspectors that the money earned some interest, which he received.
The Inspectors are therefore satisfied that, although he did not himself open the account
in Ansbacher, he was the beneficial owner of the funds contained therein.
Appendix XV (80) refers.

80. Ms Susan Sheridan Mack

Ms Susan Sheridan Mack, 5959, Bay View Circle, South Golf Port, Florida 33707 US
was contacted by the Inspectors in connection with her possible connection with an
Ansbacher account. She replied through her attorney as follows:

'As you may or may not be aware, Ms Mack's father John D Sheridan died in January
1983. Subsequently in 1985 Ms Mack first heard of Ansbacher and began receiving
distributions. Ms Mack has no idea how she acquired her interest, but presumed that it
was inherited from her father.

Please understand that Ms Mack is (sic) never considered herself a client of Ansbacher
and still does not do so. Again, she has little knowledge of the investment and still
assumed it was inherited.'

From the documents inspected by the Inspectors, including in particular a letter from
Hamilton Ross to Irish Intercontinental Bank Ltd dated 14 December 1992, the account
code relating to Ms Sheridan Mack was A/A56.

Appendix XV (81) refers.

81. Ms Mary Maher (nee Lynam)

Ms Mary Maher (nee Lynam) is the daughter of Mr Edward Lynam.

In February 1994, Mr Edward Lynam instructed that his Ansbacher deposit (A/A5) be
transferred jointly into the names of his son and daughter. At some point in the early
1990s, Mr Desmond Traynor arranged matters so that the deposit was routed through
Hamilton Ross. In February 1995, Mr Padraig Collery was instructed by Mr and Ms
Lynam to transfer the monies on deposit to another bank, and close the account.

Appendix XV (82) refers.

82. Sir George Mahon, deceased

Sir George Mahon (deceased) was a banker and a former director of Guinness and Mahon
until his resignation in January 1971. He died on 16 December 1987 and his estate made
no mention of any Ansbacher involvement.

However, Guinness and Mahon records show a letter dated 11 November, 1977 in which
Sir George advises Guinness and Mahon that he expects to receive over US$105,000 for
the account of 'Dursey'. He goes on to request that part of the money should be placed
on deposit and the remainder invested in 8% Finance Stock 1980.

In a further Guinness and Mahon internal memorandum of 11 May 1976, it is noted that
Sir George has requested the purchase of US$25,000 worth of Bank of Scotland 7% %
Eurodollar Bonds for Dursey Limited, and that the cost should be debited to Dursey's
Fixed Dollar Deposit Account. On this note, in handwriting, is the instruction 'Dr
GMCT A/Q' which appears to be an instruction to charge the cost to a GMCT /
Ansbacher account with the code A/Q.

There are also Guinness and Mahon bank statements for account no. 51656/03/58, which
is a US Dollar External Call Deposit bearing the name of 'Guinness Mahon Cayman
Trust A/Q'.

Appendix XV (83) refers.

83. Alexander H Major
Mr Alexander H Major had an address in 1986 at 31, Union Square West Suite 11300
New York US. His present whereabouts are unknown. It appears that Mr Major had
three loans from Guinness and Mahon in 1982 totalling $897,000. It is clear from
internal Guinness and Mahon documentation that these loans were back-to-back with
deposits held by GMCT. By 1983, the number of loans had grown to four. Substantial
repayments were made on 26 August 1986 when the relationship appears to have
terminated.

Appendix XV (84) refers.

84. Ms Augustina Russek de Malamud

Californian based businessmen Mr Isaac Carlos Malamud, Mr Carlos David Malamud
and Mr German Malamud opened an account in Guinness and Mahon in January 1982.
They borrowed US$550,000.00 to invest in various business interests. The security given
was described as follows in the letter of offer dated 28 January 1982:

'Promissory notes on a joint and several basis signed by all the borrowers supported by
'audits' statements of net worth of at least US£7 million and undertakings by all
borrowers not to transfer assets out of their ownership or control without lender's
approval.'

A further loan was granted in the sum of US$250,000.00 on 1 March 1982 which sum
was increased later to US$450,000.00 and a further US$20,000.00 was later added. At
the start of 1984, the total due on foot of all loans was US$1,020,000.00.

In 1989, the loans were renewed with Augustina Russek de Malamud replacing Isaac
Carlos Malamud.
It is clear from the records of Guinness and Mahon that these loans were at all times
backed by a deposit of money which originated in Cayman Islands. The borrowers
discharged interest due on the loans themselves in the normal way while interest earned
on the funds on deposit was sent to Ansbacher for the account of the borrowers. It is not
known what structure was in place on Cayman but there are references in the records to
the existence of a trust. The Malamud brothers were asked to co-operate with the
investigation through Carlos Malamud from and to whom the bank correspondence
passed but no reply was received to the request for assistance. Separate notifications
were sent to the other family members at the same address, but no reply was received in
these cases either.

The loans in question and the backing deposits were maintained in Guinness and Mahon
until 1994 shortly after the death of Mr Traynor.

Appendix XV (85) refers.

85. Mr Carlos David Malamud

See entry for Ms Augustina Russek de Malamud.

86. Mr German Malamud

See entry for Ms Augustina Russek de Malamud.

87. Mr Isaac Carlos Malamud

See entry for Ms Augustina Russek de Malamud.
Mr Joseph Malone, formerly of Ardoyne House, Pembroke Park, Dublin 4 and now
resident in the United States, is a businessman who has held a number of high-profile
positions in Ireland and in the US.

Mr Malone gave evidence to the Inspectors that, in or around 1975, the late Mr Desmond
Traynor suggested that it would be 'appropriate' for Mr Malone as a non-resident to
deposit money in Cayman for tax purposes. He asked Mr Malone for his consent to open
an account there for him, explaining that Guinness and Mahon had a 'branch' there, and
wished to build up its client portfolio. Mr Malone lodged money to the account by
transferring it to Mr Traynor. Documentary evidence suggests that Mr Malone's
accounts were coded 'A/G'. Transfers from the Ansbacher pooled accounts in Guinness
and Mahon and IIB to bank accounts in Mr Malone's name or for his benefit were made
by Mr Traynor on Mr Malone's telephoned instructions.

Mr Traynor also bought and sold shares for Mr Malone. They were not registered in Mr
Malone's name, but were in a numbered account in the name of Mars Nominees. He says
that Mr Traynor told him that most of the shares he dealt with for Irish residents were
held in that way. Profits on the sale of such shares were transferred to Mr Malone's
Ansbacher account.

Appendix XV (86) refers.

89. Ronald Markham and Jean Peterson

Mr Ronald Markham and Ms Jean Peterson of 1665 S Bayshore Drive Miami Florida
USA and P.O. box 129 Sanibel Florida 33957 USA, have failed to respond to the
Inspectors' correspondence. Their present whereabouts are uncertain.

For a number of years from 1986, Mr Markham and Ms Peterson borrowed a substantial
sum of money from Guinness and Mahon. The borrowing was on a back-to-back basis,
with the matching funds being in a GMCT account in Guinness and Mahon. The
transactions are well documented. There was also a borrowing in the name of an
associated trading entity viz. Apgar & Markham Construction. This appeared to have
been backed by the same funds.

Appendix XV (87) refers.

90. Mr John A Masek

Mr John A Masek c/o Synthetic Energy Corporation, 410 17 th Street, Suite 1375, Denver,
Colorado, US is a businessman, who has been involved in the oil business in the United
States of America for many years. He came to the attention of the Inspectors as he had
loans from Guinness and Mahon in the 1980s individually and through a trading entity
Kelly Drilling Corporation. These loans are described in the books of Guinness and
Mahon as 'Security Considered Adequate'.

Mr Masek when contacted by the Inspectors indicated, that the inquiry may have been
appropriate for Kelly Drilling Corporation, but he had no records or recall concerning the
financial affairs of the Corporation.

The Inspectors are satisfied from information available to them that both Mr Masek and
Kelly Drilling Corporation were borrowers from Guinness and Mahon but the funds
backing the borrowing were held in GMCT under the name of Mr Masek.

Appendix XV (88) refers.

91. Mr Basil Mawdsley

Mr Basil Mawdsley, a resident of the United Kingdom, is a former group financial
director of Tunnel Holdings, a UK-based producer of building products and speciality
chemicals, International Thomson Organisation, a newspaper, business press, oil and
travel group, and House of Fraser Holdings.
In his evidence on oath to the Inspectors, Mr Mawdsley said that he gave funds to the late
Mr Desmond Traynor during the 1970s to place offshore for him. Mr Mawdsley said that
he did not know the name of the entity in which his money was placed, but was aware
that it was connected with Guinness and Mahon. Documentary evidence shows that the
deposit was placed with Ansbacher in accounts coded A/A15 and A/A20. He had both a
sterling and a US$ account, the latter bearing the reference 're Coral'. Mr Traynor told
him that cash from the funds could be made available to him in the UK, and he
occasionally availed himself of this facility either by collecting money from the offices of
Guinness Mahon and Company in London or from the offices of Henry Ansbacher and
Company at 1 Mitre Square, London.

Appendix XV (89) refers.

92. Professor Anthony J Merrett

Professor Anthony J Merrett had addresses at Mountain Farm Road, P.O. Box 14,
Tuxedo Park, Tuxedo New York State, 520 Sylvan Avenue, Englewood Cliffs, New
Jersey in the US, and at Kilballyowen, Bruff, Co Limerick.

In the 1970s and at least until 1980, Professor Anthony J Merrett had a business
relationship with Ansbacher. He had loans from GMCT, which were cash-backed by
funds held in Guinness and Mahon in Dublin.

Appendix XV (90) refers.

93. Mr Geoffrey Miller

Mr Miller was a director of GB Miller & Son. In 1977, GB Miller & Son had a loan from
Guinness and Mahon, which was described as 'suitably secured'. Documents show that in
1990 and 1991, the cost of travellers cheques furnished to Mr Miller by Guinness and
Mahon was debited to an Ansbacher account.

In his evidence on oath to the Inspectors, Mr Miller said that on the advice of Mr Don
Reid of Stokes Kennedy Crowley, a UK company British Cedak Limited, (a distributor of
GB Miller & Son which paid GB Miller on a commission basis only), established a
company in the Channel Islands whose name Mr Miller cannot recollect. This company
was appointed by British Cedak as its advisor for the Irish market. Half of the
commission earned by GB Miller was paid into the company. Mr Miller said that he was
'virtually certain' that the company was managed by College Trustees.

Mr Miller said that he understood he could withdraw money from the fund through
Guinness and Mahon, where he dealt usually with Mr Padraig Collery. After Mr
Collery's departure from Guinness and Mahon, Mr Miller continued to contact him when
he wished to withdraw money, which he says was once or twice a year, for holidays. He
usually contacted Mr Collery by telephone, but on one occasion he went to the offices of
CRH at 42 Fitzwilliam Square, where he was handed money in an envelope. Mr Miller
says that around the time Mr Desmond Traynor left Guinness and Mahon, the money
'disappeared from the Channel Islands'. The Inspectors are satisfied on the basis of the
documentary evidence that the money was transferred at that time to Ansbacher, where it
was coded B/Z, as appears from an Ansbacher statement showing a debit in relation to
travellers cheques purchased by Mr Miller.

Mr Miller requested, in correspondence of 6 December 2001, that it be noted that he

complied with the provisions of the Waiver of Certain Tax, Interest and Penalties Act,
1993.

Appendix XV (91) refers.

94. Mr Jerome Morris

Messrs Stephen Morris, Joseph Morris, Thomas Morris and Jerome Morris are directors
of S M Morris Limited, a company involved in civil engineering and road surfacing. The
late Martin Morris was also a director.

Mr Stephen Morris gave evidence on oath to the Inspectors, furnished them with all the
documentation in his possession and otherwise co-operated fully with them. His evidence
was accepted as correct by the other Morris brothers and by the personal representative of
the late Martin Morris. In his sworn evidence Mr Morris told the Inspectors that in 1976
the Morris brothers moved money which they had earned overseas, and which was in an
account in the Bank of Nova Scotia, Jersey, to a joint account in which each brother held
a one-fifth share in Guinness and Mahon. Guinness and Mahon deposited this money
with one of its subsidiaries in Jersey. Mr Morris told the Inspectors that in 1989 a
discretionary trust (the Optima Trust) was established in the Cayman Islands. John Furze
was the nominal settlor and GMCT was trustee. The funds settled on the trust came from
the Morris brothers' Channel Islands account. They were placed on deposit in GMCT by
the trustee in an account in the name of Optima Securities Limited. Mr Morris said that
the brothers were unaware until a much later date that this movement of funds had taken
place.

Appendix XV (92) refers.

95. Mr Joseph Morris

See entry for Mr Jerome Morris.

96. Mr Martin Morris, deceased

See entry for Mr Jerome Morris.

97. Mr Stephen Morris

See entry for Mr Jerome Morris.

98. Mr Thomas Morris

See entry for Mr Jerome Morris.

99. Mr John Mulhern

Mr John Mulhern is a well-known businessman who owns Clayton Love Distribution
Limited. He has been involved in that company since 1966. He originally was an
employee but, in the early 1970s, took a 55% stake in the company by purchasing the
shares of the previous owners. At the same time, Nestle Limited took a 45% stake by the
same means.

In 1983, the shares of the minority shareholder were transferred to new minority
shareholders - College Trustees Limited. This was at that time a Channel Islands
company within the Guinness Mahon Group. Mr Mulhern explained that Mr Desmond
Traynor arranged this but he did not know on whose behalf the purchase was made. The
shareholding remained unchanged until 29 October 1993 when the College Trustee shares
were sold back to Clayton Love Distribution Limited for a sum of £3,199,500 in two
tranches - IRL£1,422,000 and £1,777,500. Mr Mulhern gave evidence under oath that he
did not know the identity of the beneficial owner of the 45% shareholding held in the
name of College Trustees. The Inspectors considered it unlikely that College Trustees
themselves were the beneficial owners of the shares, as their value was never referred to
in internal Guinness and Mahon documents. It was important for the work of the
Inspectors to establish who was the beneficial owner as that client of College Trustees
had used the services of Ansbacher/Hamilton Ross. The Inspectors learned with surprise
in Mr Mulhern's solicitor's letter of 13 August 2001 that the ultimate owner of the
£1,777,500 was Mr Mulhern himself. This called into question the extent to which the
Inspectors could rely on Mr Mulhern's evidence
Mr Mulhern in a statement, which was confirmed on oath, had assured the Inspectors that
he had no involvement with Ansbacher.

A letter on Ansbacher paper dated 30 July 1992 authorising the transfer of IRL£750,000
from Ansbacher account in IIB to Clayton Love Distribution Ltd was proffered to Mr
Mulhern. He explained this as a loan from Mr Des Traynor to his firm, in anticipation of
a takeover deal, which never materialised. Mr Mulhern was asked to explain when and to
whom it was repaid and to whom interest was paid in respect of this borrowing. An
explanation was also sought in similar terms on the details of a further Ansbacher
document dated 27 July 1993 relating to a transfer of STG£1,300,000 to Clayton Love
Distribution Limited which Mr Mulhern explained as a loan from Mr Traynor. The
explanations offered were inadequate in the case of the first loan and practically non-
existent in the case of the second example.

In view of the contradictory evidence of Mr Mulhern relating to the beneficial ownership

of shares held by College Trustees, the Inspectors do not accept that, in arranging loans
from Ansbacher related deposits, Mr Traynor was acting on his own behalf only. The
Inspectors conclude that, on the balance of probability, the loans so arranged were also
connected with Mr Mulhern's offshore interests.

Mr Mulhern could not explain a charge of £500 in 1974 to the account of Guinness
Mahon Jersey Trust account in Guinness and Mahon under the name of John Mulhern
Settlement. Mr Mulhern gave evidence that he did not have a Jersey Trust or deposit at
that time or at all to his knowledge.

A Loan to a subsidiary company, Ice Cream Marketing Limited, which was described as
'Suitably Secured' in a number of internal Guinness and Mahon documents, was put to
Mr Mulhern. He could not explain the source from which these loans were cash backed.

A payment from Ansbacher to Clarkwood Holdings (a Company under the control of Mr

Mulhern) of STG£45 on 7 December 1990 was not explained by Mr Mulhern.
Mr Mulhern agreed that Mr Traynor had established a company named Debon Arabia
Contracts Ltd for his use. It was to this account that the transfer of STG£1,700,178.75
(being the sterling equivalent of the cash received for the Clayton Love Distribution
Limited shares) was made on 16 February 1994 from the account of Hamilton Ross.

Appendix XV (93) refers.

100. Mr James Murray, deceased

The late Mr James Murray, formerly of Hadley, Coast Road, Mornington, Co Meath, was
a client of Mr Jack Stakelum. He gave funds to Mr Stakelum in the 1970s to place on
deposit. This instruction was implemented in such a way that the funds were invested in
Ansbacher throughn Guinness and Mahon. At a later time, Mr Murray took a loan from
Guinness and Mahon, which was backed by these funds. He thereafter had a direct
relationship with Ansbacher.

Appendix XV (94) refers.

101. Mr William Navan Senior, deceased

Mr William Navan Snr, formerly of 35 Ballyshannon Road, Portadown, Co Armagh died
on 16 September 1990. His daughter, Ms Amanda Navan, and son, William, were his
personal representatives. Mr William Navan Jnr died in the following year.

Both siblings opened a joint account in Northern Bank to administer their father's estate.
This account received a lodgement of STG£5,000 on or about 19 September 1990. Ms
Navan does not know the source. A letter dated 19 September from Ansbacher in Dublin
to Guinness and Mahon, relates to the transaction. It is clear that the funds came from
Ansbacher account no. 13154602. As the estate that received the benefit of the funds
was that of Wm Navan Snr, the Inspectors conclude that he was the owner of the
Ansbacher based assets.

Appendix XV (95) refers.

102. Mr Maurice Neligan and Dr Patricia Neligan

Mr Maurice Neligan is a well-known surgeon and one of the promoters of the Blackrock
Clinic. Dr Patricia Neligan, his wife, is a medical practitioner.

In 1986, the Neligans borrowed money from Guinness and Mahon, with whom Mr
Neligan had previously done business. At about the same time as the loan was
negotiated, a sum of IRL£90,000 was placed on deposit with Guinness and Mahon. Part
of this was used to buy gilts through a Guinness and Mahon nominee account. The
remainder of the deposit, for some unknown reason, was moved without the knowledge
of the Neligans into an Ansbacher account called GMCT / College ref. MP. They closed
their account in 1989.

Appendix XV (96) refers.

103. Mr Olivier Nicol

Orbit Investments Ltd was a Cayman company with a registered address at the GMCT
Cayman office. It was used at various times for a number of persons apparently involved
in racehorse ownership and or training. One such person was Olivier Nicol of Haras de
la Viette, Le Mesnil-Mauger, 14270 Mesidon, France.

A letter of offer from Guinness and Mahon to Orbit Investments Limited addressed to
GMCT office in Grand Cayman requests a guarantee from Mr Nicol.
A letter from Ansbacher Irish office to Guinness and Mahon on 30 January 1991 also
connects the Orbit Investments Ltd with Mr Nicol.

Two letters on Orbit Investment notepaper with both Cayman and Irish addresses also
involve a reference to Mr Nicol.

Appendix XV (97) refers.

104. Mr Michael J O'Keeffe, deceased

The late Mr Michael J O'Keeffe was an accountant by profession and a retired banker.
Unfortunately he died during the course of the Inspectors' work.

Mr O'Keeffe was seriously ill during the course of the Inspectors work and used his
accountant and tax adviser as his agent in this matter.

Mr O'Keeffe, through his authorised agent, replied to a request for information by letter
dated 21 January 2000 and by further letter of 26 January 2001 enclosing a statement
dated 29 November 1999. This communication and all other matters brought to the
attention of the Inspectors by Mr O'Keeffe through his agent have been taken into
account for the purpose of arriving at these conclusions.

Mr Michael J O'Keeffe borrowed funds from Guinness and Mahon in the 1970s. This
loan was referred to as 'suitably secured' in Guinness and Mahon documentation.

In 1976, Mr O'Keeffe requested a Guinness and Mahon official to enquire as to a US$

deposit a/c in GMCT, clearly in the belief that he had such an account. In 1984 Mr
Desmond Traynor placed an envelope in safekeeping with Guinness and Mahon under
the reference 'GMCT re Michael O'Keeffe'.
105. Mr Maurice O'Kelly
Mr Maurice O'Kelly is a former joint managing director of Guinness and Mahon, which
he joined following the takeover by Guinness and Mahon of Commercial Investment
Advisers, in which he owned 70% of the shares. He is a chartered accountant by
profession, and his friendship with Mr Traynor dates back to 1951, when they were both
articled clerks in Haughey Boland. Mr O'Kelly retired from Guinness and Mahon in
1985.

In his evidence to the Inspectors, Mr O'Kelly said that when he joined Guinness and
Mahon in 1971, he had certain funds available to him from the sale of company shares.
These he gave to Mr Traynor to invest. Mr O'Kelly said that he did not know what Mr
Traynor did with it, but he now accepts that the money was lodged to a GMCT account
on his behalf. He also accepts that the account was coded A/A55.

Appendix XV (99) refers.

106. O'Reilly Aerlod (Ireland) Limited

O'Reilly Aerlod (Ireland) Limited is a limited liability company which was established in
1985 to take over the business of O'Reilly Aerlod Limited, an air freight company. It
was first owned by a group involved in the transport business based in Cork but at the
time relevant to its involvement with Ansbacher, a management team headed by Mr
Diarmuid Carpendale owned it. The company's secretary at this time was Mr Desmond
Turvey. A liquidator was appointed to the company on 1 March 1995.

A sum of STG£6,284.50 was lodged to an Ansbacher account in IIB on 22 January 1991.

The cheque was payable to the old company, O'Reilly Aerlod Limited but, on
investigation, it was clear that this firm had not received the benefit of the funds. The
company secretary, Mr Desmond Turvey, denied any knowledge of the cheque.
Mr Diarmuid Carpendale, the former chief executive of the company, gave evidence that
the sum was owned by O'Reilly Aerlod (Ireland) Limited and had been lodged as part of
a scheme whereby Mr Turvey lodged money, which was later used for the payment of
tax-free bonuses to the executives of the firm. The Inspectors accept Mr Carpendale's
evidence and accept that Mr Turvey must have been mistaken. The exact mechanism
used to lodge the money is unclear but the combination of Mr Carpendale's evidence and
the lodgement of the cheque to Ansbacher lead the Inspectors to the conclusion that the
firm was a client of Ansbacher.

Appendix XV (100) refers.

107. Mr Dermot O'Reilly-Hyland, deceased

The late Mr Dermot O'Reilly-Hyland was a senior partner in O'Reilly-Hyland Tierney
and Associates, and resided at Hollywood House, Glenealy, Co. Wicklow.

A document furnished by Guinness and Mahon shows that as at 30 April 1978, a loan
held by Mr O'Reilly-Hyland was secured by a deposit held in either Cayman or
Guernsey. Later documentation makes it clear that in fact the deposits were with GMCT.
An internal Guinness and Mahon document entitled 'Balances as at 17th August 1982 D.
O'Reilly-Hyland' shows four loans and corresponding deposit balances. The deposit
accounts are entitled F, F1, F2 and F3. An internal Guinness and Mahon memo dated 18
April 1977 from Mr Desmond Traynor ('JDT') attaches G.R.A share certificates and says
'I ... would be grateful if you would arrange to 'sell' crediting Dermot O'Reilly-Hyland's
account with the proceeds and 'buy' on behalf of Achill Limited debiting the cost to
GMCT F1 deposit.'(our emphasis).
108. Mr Ken O'Reilly-Hyland
Mr Ken O'Reilly-Hyland of 5/6 Cypress, Hazeldene, Anglesea Road, Dublin 4 is a
retired businessman

Mr O'Reilly-Hyland told the Inspectors that, having become a 'name' at Lloyds, he was
advised by his solicitors that it would be prudent to order his affairs by the establishment
of an offshore trust. He established such a trust in the Bahamas in the 1960s, which, on
the advice of the late John Guinness, he moved to GMCT, Mr Guinness having indicated
that GMCT would provide a more cost-effective trustee service. The trust funds were
held in GMCT in the name of Newport Agencies Limited. Documentary evidence
indicates that the accounts were coded A/D.

Appendix XV (102) refers.

109. Mr Michael O'Shea

Mr Michael O'Shea, Mr Roger P Ballagh and Mr Terence D E Dixon are solicitors in a
Dublin firm.

During 1992, fees earned by the firm were given by Mr McGonagle, their late partner, to
Mr Desmond Traynor and ended up in an Ansbacher account. The remaining partners
have assured the Inspectors that they did not know where these funds were lodged. The
sum involved was £40,000 approximately. The money was left on deposit offshore for
some time and then shared out among the partners. The payments were made from a
Hamilton Ross account in Ansbacher. The IIB dealing tickets show that Mr Ballagh
received over IR£11,530, Mr O'Shea and Mr Dixon IR£6,243 each, the firm IR£4,877
and a company controlled by the late Mr Liam McGonagle Stg £6701.

All the partners who shared in that fund were thus clients of Ansbacher. The Inspectors'
formal decision on the late Mr McGonagle is to be found elsewhere in the report.
Mr Michael J O'Shea, Mr Roger Ballagh and Mr Terence Dixon were clients of
Ansbacher, although the Inspectors accept that they were not aware of the location of the
funds.

Appendix XV (103) refers.

110. Mr John Oppermann and Mrs Eileen Oppermann

Mr and Mrs Oppermann, now retired, were the owners of Johnny's Restaurant in
Malahide from 1973 to 1989. The late Mr Desmond Traynor was a frequent visitor to the
restaurant. Around 1974 or 1975, Mr Oppermann asked Mr Traynor's advice as to where
he and his wife might invest some money. Mr Traynor offered to invest it for them. It is
now clear that he placed the funds in GMCT, where, as appears from an internal
Guinness an Mahon memo of 18 August 1981, they were held in an account coded A/A7.
From then on, the Oppermanns gave him sums of money from time to time. It also
happened occasionally that Mr Traynor held a dinner party in the restaurant, and instead
of paying the bill, lodged the amount to the Oppermanns' GMCT account.

Appendix XV (104) refers.

111. Pettit International Ltd

Pettit International Ltd is part of E G Pettit, an Irish based consulting engineering
company with offices in Dublin and Cork. The Inspectors note that the company
underwent a complete change of ownership in October 1997.

In the 1982/3 period, Pettit International Ltd used the services of Guinness and Mahon
and GMCT on a number of occasions. It is clear from the documents available to the
Inspectors that Pettit International had an account with GMCT. The current owners of
the company, who provided the Inspectors with information available to them, state that
this GMCT account was used by the former company to service income generated by
their overseas trading operation. They have assured the Inspectors that the funds lodged
to the GMCT account comprised money earned from their overseas operations only and
that no funds were ever transferred from Ireland to the account.

Appendix XV (105) refers.

112. Dr Michael Phelan

Dr Michael B Phelan resides at 53 Great Cumberland Place, London. The Inspectors are
in possession of documentation showing that Dr Phelan received a number of payments
from Ansbacher accounts in Guinness and Mahon and IIB. As one document shows, the
payment in question was debited to coded account A/A20.
The Inspectors wrote to Dr Phelan seeking information on 4 May 2000. On 15 May he
telephoned the Inspectors' solicitor Ms Mary Cummins explaining that he had just
returned from holidays. He then gave her certain information over the phone. She asked
him to put this in writing for the Inspectors, and he agreed to do so, having however
explained that he was unwell. On 16 June 2000, the Inspectors' secretary Ms Frances
Gaynor wrote to Dr Phelan reminding him of the Inspectors' request and seeking to
arrange an interview. On 3 July, no response having been received from Dr Phelan, Ms
Gaynor telephoned him at his home. Dr Phelan told her that he had no information or
documents to impart to the Inspectors, and that an interview would be a waste of time. A
second telephone conversation on the following day did not advance matters. On 7 July
2000 Ms Gaynor wrote again to Dr Phelan suggesting an interview in London. She asked
him to provide a medical certificate in the event that he was unable to attend an interview
on health grounds. This was provided on 14 July 2000. In the absence, therefore, of any
evidence from Dr Phelan himself, the Inspectors have been obliged to arrive at their
preliminary conclusions on the basis of documentary evidence in their possession.
113. Ms Marily Power
Ms Marily Power is the part-owner of Suma Stud in Co Meath.

In 1977, a trust was constituted in the Cayman Islands on Ms Power's behalf for the
purpose of holding assets in the United States belonging to her. John Furze was the
nominal settlor and GMCT was the trustee. A letter of wishes signed by John Furze
indicates that he expects Ms Power's instructions to be taken in connection with any
capital or income distributions from the trust. A Cayman company, Jumelol Investments,
managed the assets of the trust, which it placed on deposit with GMCT.

Appendix XV (107) refers.

114. Mr Fernando Pruna and Mrs Eudelia Pruna

On 21 December 1985, the credit committee of Guinness and Mahon approved a loan to
Fernando Pruna and Eudelia Pruna (hereinafter called 'the Prunas') in the sum of US
$135,000. This was the first of a series of transactions that had serious repercussions for
GMCT, Guinness and Mahon and Mars Nominees. Deposits of the same sum backed
the borrowing from GMCT. This was the first of a series of loans to the Prunas, which
totalled at one time US $ 1,068,000, all backed by GMCT deposits.

The Inspectors have had the benefit of The Ninth Memorandum of Evidence prepared by
Ms Sandra Kells of Guinness and Mahon for the Moriarty Tribunal. Mr Cathal
McCarthy has adopted this document as his evidence in his capacity as legal adviser of
Guinness and Mahon. For a fuller understanding of the matters raised relative to these
loans, that document (exhibited hereinas 1(a) ) should be consulted.

Appendix XV ( 1 0 ) refers.
115. Mr Seamus Purcell
Mr Seamus Purcell is a company director and businessman operating in the livestock
processing and exporting sector, initially as an unincorporated entity, Seamus Purcell &
Company, but from the 1980s as Purcell Exports Limited, and in Northern Ireland as
Ulster Meats Limited.

Mr Purcell was introduced to Guinness and Mahon by a business acquaintance around

1975 and came into contact with Mr Desmond Traynor. Guinness and Mahon provided
Mr Purcell's business with bid and performance bonds to enable it to secure livestock
export contracts. Mr Purcell needed US dollars to pay his overseas agents' commissions
(some of which were secret), and in the early 1980s, Mr Traynor offered to facilitate him
with an external dollar account. Some export earnings from the Canary Islands were
used to open the US dollar account in the name of Guinness Mahon Cayman Trust 'Y'
Account, number 41229/03/68. Into this account was lodged a Banco Intercontinental
Espanol cheque for US$432,438.24, payable to Seamus Purcell. The photocopy of the
cheque bore the words 'File Seattle Securities'. Mr Purcell accepted these funds were
related to his business activities, but denied having been aware of the GMCT 'Y' account
or Seattle Securities at the time.

On occasion, commission payments were made in Ireland and, by going to see Mr

Traynor in Guinness and Mahon, Mr Purcell could obtain cash or drafts in dollars.
Mr Purcell said he was not advised by Guinness and Mahon of any breach of exchange
control regulations and he left all of that to the bank.

A Guinness and Mahon document on 6 February 1984 recorded the opening of a

Deutschemarks loan account in the name Purcell Exports Limited for DM6,000,000.
Guinness and Guinness records also indicate the opening of a Deutschmark deposit
account on 8 February 1984 into which was deposited DM5,797,090.14, and the account
name was GMCT 'Y' C/o P Collery. The account was annotated 'Back-to-back with
DM loan'. Once again Mr Purcell said he was unaware of these accounts. However, he
also said he spent much of each year travelling abroad on behalf of his business, and did
not, in consequence, deal with its administration.

The Inspectors conclude that Mr Seamus Purcell, as the beneficial owner of Seamus
Purcell & Company and Purcell Exports Limited, was a client of Ansbacher.

Appendix XV (109) refers.

116. Mr Diarmuid Quirke, deceased

The late Mr Diarmuid Quirke was an executive director of CRH plc from 1980 to his
retirement in 1991. Mr Quirke died on 21 September 1994.

Mrs Joan Quirke, his widow, and the executor of Mr Quirke's estate assisted the
Inspectors in their investigation. The Inspectors accept that her knowledge of the matters
within the remit of the Inspectors is minimal. She has however explained the context in
which certain traveller's cheques were issued to her husband and herself.

A number of points of contact exist between Mr Quirke and Ansbacher based on the
documentation available to the Inspectors.

On 22 October 1985 an amount of IR£960 was transferred from the account of Amiens
Securities in Guinness and Mahon to Mr Quirke's account in that bank. Amiens was
used by Mr Traynor for the processing of small Ansbacher transactions but this
transaction alone would not be sufficient proof of a client relationship between Mr
Quirke and Ansbacher.

On 29 July 1991 a cheque payable to Mr Quirke from Bluehill Investments Ltd in the
sum of STG£2872 was lodged to Ansbacher account in IIB. Bluehill Investments Ltd
was a Guernsey company used by CRH to assist in the financing of the acquisition by
CRH of overseas companies, in the course of which it reimbursed, in sterling, expenses
incurred in connection with this work by executives and directors of CRH.

On 7 January 1992 Mr Quirke wrote to a CRH executive as follows:

I enclose second statement of sterling expenses for calendar year 1991. I would request
that you would forward your cheque to Ms Joan Williams at 42 Fitzwilliam Square who
will be authorised to deal with it on my behalf.

On 14 January 1992 US$4,000 was withdrawn from Guinness and Mahon account of
Ansbacher re Poinciana and used to purchase travellers cheques for Mr Quirke and his
spouse.

On 23 January 1992 a cheque in sum of STG£3125 from Bluehill Investments Ltd

payable to Mr Quirke was lodged to Ansbacher account in IIB.

These latter three events are obviously connected. Ms Williams at that time was the
secretary of Mr Traynor in CRH but her only banking role was as an assistant in Mr
Traynor's Ansbacher banking service to his/the bank's Irish customers. Ansbacher's
service was used to facilitate the purchase of these travellers' cheques and Mr Quirke was
familiar enough with how the system operated to direct the incoming funds to Ms
Williams.

On 13 September 1993, sterling travellers cheques to the value of IR£1324.59 were made
available to Mr Quirke and his spouse through the Bank of Ireland account of Kentford
Securities Ltd. This account was used exclusively for the provision of cash and Irish
pound cheques for clients of Ansbacher, as IIB did not have a cash facility.

It is only to this limited extent that Mr Quirke appears to have used Ansbacher's services
but the full context of the above contacts satisfies the Inspectors that Mr Quirke was a
client of Ansbacher.
Appendix XV (110) refers.

117. Mr Jeremy Robson

Mr Jeremy Robson appears to have been UK based and used the offices of GM & Co
London to collect cash withdrawals from his Ansbacher account.

Mr Robson's name appears on a number of Ansbacher-related documents indicating that

he regularly withdrew funds that were debited to Ansbacher or GMCT accounts. The
withdrawals, although made in Guinness Mahon and Co London, were always made on
the instructions of either Guinness and Mahon or IIB, themselves acting on earlier
instructions from the late Mr Desmond Traynor. A memo from Mr Traynor dated 4 June
1986 links Mr Robson with the Wentworth Trust, a GMCT trust. Many GMCT
statements in Guinness and Mahon show transactions relating to this trust. A sample only
is attached hereto.

Appendix XV (111) refers.

118. Mrs Sonia Rogers

Mrs Sonia Rogers is the widow of Captain Tim Rogers. She is the owner of Airlie Stud,
Maynooth.

Mr Padraig Collery, an employee of Ansbacher in Ireland during the relevant period,

gave evidence to the Inspectors of making payments to Mrs Rogers' secretary from an
account held with Ansbacher in the name of Hamilton Ross. This account was coded
A/A3. Statements of the A/A3 account show lodgements and withdrawals from 1992
onwards.
Mrs Rogers informed the Inspectors that she gave the proceeds of two insurance policies
to the late Mr Traynor in 1988 to fund the education of one of her children. She said that
she had no knowledge of where Mr Traynor had lodged the funds. She believed that the
payments she received from Mr Collery were repayments of the amounts she had given
him.

In cross-examination by Mrs Rogers' lawyers, Mr Collery said that the payments he had
made to her over the years were debited by him to a memorandum account A/A3. This
memorandum reflected movements on an account held in the name of Hamilton Ross. As
is clear from the statements of account A/A3, Hamilton Ross held funds in Ansbacher's
bank in the Cayman Islands. Mr Collery agreed when questioned by the Inspectors that
this meant that Mrs Rogers was the beneficial owner of part of the funds held in Hamilton
Ross account A/A3. The Inspectors are therefore satisfied that Mrs Rogers funds were
deposited with Ansbacher.

Appendix XV (112) refers.

119. Captain Tim Rogers, deceased

The late Captain Tim Rogers was a well-known stallion owner and stud farmer. He died
in 1984. The Inspectors received evidence on oath from his widow, Mrs Sonia Rogers.

Mrs Rogers said that after her husband's death, Mr Desmond Traynor told her that her
husband had established an offshore trust for her benefit and that of their children. At a
later stage, Mrs Rogers learned that the trust was in the Cayman Islands. Mr Traynor told
her that the trust 'dealt in bloodstock' through a company called Ascot Holdings.

Appendix XV (113) refers.

120. Mr John Savoy

Mr John Savoy appears to be a resident of the United States. In 1984, he was an officer of
Southeastern Commodities Inc, a US company whose registered address in 1984 was
1080 SW 12 th Avenue, Pompano Beach, Florida. The company went into liquidation in
that year.

In 1984, the company had a loan from Guinness and Mahon backed by funds held in
Guinness and Mahon in an account entitled 'Guinness Mahon Cayman re Southeastern
Commodities external offset D/A'. The loan was also initially guaranteed by GMCT, but
this guarantee was subsequently cancelled and replaced by the personal guarantee Mr
Savoy.

The GMCT funds on deposit with Guinness and Mahon were themselves backed by a
deposit in the same sum placed with GMCT by a GMCT company, Cool Breeze
Investment Corporation, of which Mr Savoy was the beneficial owner. The Inspectors are
satisfied therefore that the funds backing the Guinness and Mahon loan were beneficially
owned by Mr Savoy.

Appendix XV (114) refers.

121. Schwartz Management Company

Schwartz Management Company is a company registered in the state of Delaware, in the
U.S. Outside Delaware, its principal place of business is in Iowa, where its registered
office is 520 Walnut Street, Des Moines, Iowa 50306. Its business is described as that of
managing the financial and business affairs of other companies, and dealing in metal
products. Its president was Mr Ben Schwartz, recently deceased, whose most recent
address was 1909 North Clifton Avenue, Chicago, Illinois 60614. He also had an address
at PO Box 10363, Des Moines, Iowa 50306.
In the 1980s, Schwartz Management Company had a loan from Guinness and Mahon,
which was backed by a deposit held in Guinness and Mahon in the name of GMCT. In
1983, this loan was the largest on the bank's books, standing at US$10.3 million.

Appendix XV (115) refers.

122. Mr Joseph Seeley

Mr Joseph Seeley was a Company Director of a number of Irish based companies

including Westward Cables Ltd, Westward Horizon Ltd, Horizon Distribution Ltd and
Histon Securities Limited.

According to information contained in a Guinness and Mahon internal document, the

facility in the name of Histon Securities (loan £119,000 and £20,000 letter of credit) was
originally advanced in 1984 in connection with the purchase of shares in Western Cables
Limited. That firm was involved in multi-channel TV installation in Limerick and
elsewhere. Security is described as 'adequate'.

A further internal memorandum of Guinness and Mahon dated 24 December 1986 lists
Histon Securities as College Trustee clients for whom 'College have arranged deposits
here through GMCT'.

Mr Seeley and his wife are listed as the sole shareholders in Histon Securities Limited.
In an internal Guinness and Mahon document relating to security for a company loan, Mr
Seeley alone (rather than he and his wife together) is requested to personally guarantee
the loan. This indicates that Mr Seeley was the controlling shareholder.

Appendix XV (116) refers.

123. Mr Sidney Seymour, deceased
The late Mr Sydney Seymour died on 31 October 1992. He had appointed his wife as
his executrix, but unfortunately she died on 17 December 2000 before she could assist the
Inspectors in their investigation. The Inspectors are satisfied that the remaining members
of the family do not have any relevant information. In these circumstances, the
Inspectors have considered this matter on the basis of the documents available from a
number of sources and the evidence of Mr George Crampton.

Mr Seymour was employed for many years by G&T Crampton Ltd, an Irish based
building company. He was also a director of that company. In the early 1970s, this
company arranged that a number of trusts were established in the Cayman Islands for the
benefit of its directors. These trusts were to be managed by Ansbacher. Each of these
trusts was to be given the name of Whitethorn and identified by 'A', 'B', 'C' etc. The
Inspectors have documentary evidence that one such trust was established and the
testimony of Mr Crampton infers that the other trusts were also established.

The Inspectors, in the case of Mr Seymour have additional information in that he is

identified after the relevant time as having a loan from Guinness and Mahon that is
described as 'suitably secured'. The Inspectors conclude from the above information that
Mr Seymour was a client of Ansbacher.

Appendix XV (117) refers.

124. Mrs Nora Shanahan

Mrs Nora Shanahan lives at 8, Clifton Gardens, London W9 1DT. Unfortunately, due to
the lack of co-operation of Mrs Shanahan, the Inspectors have been unable to confirm
any of the details necessary to report fully on her. They have established the following,
however:
It appears that Mrs Shanahan had a business connection with Ansbacher in the 1990s.
From records available to the Inspectors the following transactions took place in and out
of Ansbacher/Hamilton Ross accounts in IIB (all sums sterling):

14 October 1991 lodgement STG£30,000

27 August 1990 withdrawal STG£5,000

Further withdrawals of STG£5,000 were made on 28 August 1991, 8 April 1992, 21

January 1993, 26 July 1993, 3 March 1994, 6 January 1995, 6 December 1995, and 19
October 1996. As appears from the letter dated 2 October 1991, Mrs Shanahan's account
number was A/A48.

Appendix XV (118) refers.

125. Mr Michael J Shanley

Mr Michael J Shanley of Tingrith Manor, Tingrith, Milton Keynes, England, is a director

of a number of Irish companies, among them Shanley Hotels (Ireland) Limited. The
Inspectors wrote to Mr Shanley in December 2000, and despite a number of reminders
and a formal requirement to attend before the Inspectors to give evidence on oath, either
in Ireland, or if more convenient, in England, Mr Shanley did not reply until July 2001. In
that letter he refused to comply with the Inspectors' requirement to attend before them,
and said he would write a letter of explanation 'eventually'. He added that if the
Inspectors still had questions upon receipt of the proposed letter of explanation, he might
consider a meeting, but that in any event, this would not be before November 2001. The
Inspectors find Mr Shanley's response unacceptable, and have been obliged to proceed to
a preliminary conclusion without the benefit of his evidence.
The Inspectors heard evidence from Mr Thomas Kevin Smith, a former director of
Maybach Investment Company Limited ('Maybach'), a company that had a loan from
Guinness and Mahon described by the bank as 'suitably secured'. From their evidence
and from documents in the possession of the Inspectors, it emerged that an Irish trust
known as the Maureen O'Brien Settlement was established in 1970 to benefit 'the
grandchildren and more remote issue of Thomas and Bridget Shanley ...'. Funds from the
sale of a property in Raheny, Dublin, were settled on the trust. A letter of wishes signed
by the settlor (Mr Shanley's sister) makes it clear that the wishes of Mr Shanley are to be
taken into account by the trustees in making distributions. The letter of wishes also
indicates that it might be desirable that monies should be made available to assist
businesses promoted by Mr Shanley.

The trust lent money to a company called Keeladrum Investments Limited, with an
address c/o GMCT, who placed it on deposit with Ansbacher. The funds so deposited
were used as security for a loan obtained by Maybach from Guinness and Mahon. On 12
January 1978, College Trustees, the trustees of the Katharina Settlement, a Channel
Island trust, acquired the full issued share capital of Maybach. In May 1980, the trustees
of the Maureen O'Brien Settlement resettled the trust fund on the Katharina Trust and in
due course, the trustees of that trust lent the funds interest-free to Maybach.

Considerable documentation in the possession of the Inspectors indicates that Mr Shanley

was the beneficial owner of the funds in the two trusts. Three documents are of particular
significance. The first is a letter dated 21/22 January 1987 from Mr Smith to Mr Shanley,
from which it emerges that Mr Shanley had issued instructions concerning the
beneficiaries of the Katharina Trust. The second document is a letter dated 18 February
1986 from Mr Smith to Mr Shanley discussing the accounts of Maybach. The third
significant document is a letter dated 21 January 1987 from Mr Smith to Mr Ellis of
College Trustees. The Inspectors' copy of this letter is of such poor quality as to be
almost illegible, but on the second page, one can discern the following sentence: 'Mr
Shanley would like to lodge with you a letter of intention in regard to the proportions in
which he would like named beneficiaries to benefit under the trust and from time to time
he may wish to amend the said letter.'
The above documents clearly show that Mr Shanley exercised control over the Katharina
Trust funds. Since the funds in the Katharina Trust are the same funds that were held
previously by the Maureen O'Brien Settlement, and since, as the Maureen O'Brien
Settlement Deed shows, Mr Shanley was not a beneficiary of that settlement, the only
inference that can be drawn from his subsequent exercise of control over the funds is that
he was at all times the beneficial owner of them. This includes the period during which
they were on deposit with Ansbacher.

Appendix XV (119) refers.

126. Mr John D Sheridan

Mr John D Sheridan, who died in 1983, was a client of Ansbacher. For the avoidance of
doubt and any possible confusion with others of the same name, the deceased has a
daughter resident in Florida, Ms Susan Sheridan Mack.
Ms Susan Sheridan Mack was contacted by the Inspectors in connection with her possible
connection with an Ansbacher account. She replied through her attorney as follows:

'As you may or may not be aware, Ms Mack's father John D Sheridan died in January
1983. Subsequently in 1985 Ms Mack first heard of Ansbacher and began receiving
distributions. Ms Mack has no idea how she acquired her interest, but presumed that it
was inherited from her father.

Please understand that Ms Mack is (sic) never considered herself a client of Ansbacher
and still does not do so. Again, she has little knowledge of the investment and still
assumed it was inherited.'

Appendix XV (120) refers.

127. Mr Jack Stakelum
Mr Jack Stakelum is a chartered accountant and company director, and was a close
personal friend of Mr Desmond Traynor. In the 1960s they were partners in the
accountancy firm of Haughey Boland.

In the early 1970s when Mr Stakelum was still with Haughey Boland, Mr Traynor
suggested a scheme whereby Mr Stakelum borrowed a substantial amount from Guinness
and Mahon on which he claimed tax relief on the interest. In a Guinness and Mahon
listing of loans the loan is described as being suitably secured. The funds were placed
with an offshore company, the name of which has not been established but in which Mr
Stakelum was beneficially interested, which placed them on deposit offshore. Mr
Stakelum said the offshore bank might have re-deposited the money with Guinness and
Mahon. Mr Stakelum acknowledged that this was a classic suitably secured situation of
the time.

After leaving Haughey Boland in 1975 Mr Stakelum set up Business Enterprises Limited,
a company from which he offered financial services and business advice. From around
1976-77 some of Mr Stakelum's clients had funds abroad which they asked him to
'monitor' on their behalf. Mr Stakelum arranged with Mr Traynor that these funds were
transferred to Guinness and Mahon and placed on offshore deposit. Thereafter he
offered a service to his clients whereby, using a business name entity called Clyde
Enterprises, he accepted Irish pound lodgements for, and provided withdrawals from, the
offshore account which he described as a 'hotchpotch account' containing funds
belonging to a number of his clients.

In another section of the report the Inspectors have considered carefully the evidence
available to them as to the location of the offshore entity into which Mr Traynor
deposited the funds given to him by Mr Stakelum, and they have concluded that the
hotchpotch funds were on deposit with Ansbacher.
Since Mr Traynor and Guinness and Mahon did not know the names of the individuals
whose combined funds made up the total of the hotchpotch account, it follows that the
account was operated by Mr Traynor as being under the control, and therefore the legal
ownership, of Mr Stakelum. The beneficial ownership of the funds, according to Mr
Stakelum, remained pro rata with his individual clients.

Further, by letter of 1 August 1990, Mr Traynor instructed Guinness and Mahon to

arrange for travellers cheques for US$6,000 to be issued in the name of John J Stakelum
and charged to Ansbacher account number 13154977. Mr Stakelum accepted that this
withdrawal came from a US dollar offshore account separate from the main hotchpotch
account, and that the cost was charged to him.

Mr Stakelum enjoyed the use of the funds nominally deposited abroad, but held in
Ireland through an Ansbacher account in Guinness and Mahon, by means of a service
provided by Ansbacher and Mr Traynor whereby he was able to withdraw funds in
Ireland.

Appendix XV (121) refers.

128. Mr Sam Stephenson

Mr Sam Stephenson is a well-known Dublin architect. He has been a property developer

in consortia with others, which on a number of occasions included the late Mr Desmond
Traynor. Until the mid 1970s, when a disagreement arose between them resulting from
the then property crash, Mr Stephenson characterised his relationship with Mr Traynor as
one of a very close partnership and friendship, and said that Mr Traynor was of great
benefit as an advisor.
Starting in the early 1970s, Mr Traynor placed monies representing Mr Stephenson's
share of property development profits on deposit with Ansbacher, which was then known
as GMCT, in Cayman. Mr Traynor suggested that it would be prudent for Mr
Stephenson to have a family trust in Cayman. Mr Stephenson, while accepting that the
creation of a trust had been mentioned to him, did not accept that he had any knowledge
of the actual setting up of a trust.

The Ansbacher deposit was used to provide security for property development loans from
Guinness and Mahon, and these loans were described as being 'suitably secured'. In the
mid 1970s property crash, Guinness and Mahon wished to see Mr Stephenson reduce the
level of his borrowings, and the Ansbacher trust deposit was used by Guinness and
Mahon to offset liabilities arising from development losses.

Appendix XV (122) refers.

129. Super Ser Limited

Super Ser Limited ('Super Ser') was a company operating in Ireland up to the 1980s. Its
shareholders were Mr Harry Lindsay and Mr Chris Goosen. It is no longer in existence,
and the Inspectors wish to stress that any company currently bearing the same or a similar
name has no connection with Ansbacher.
Mr Harry Lindsay told the Inspectors that Super Ser had substantial deposits with
Ansbacher. This is substantiated by an extract from a 1978 report on Guinness and
Mahon by the Central Bank which refers to Super Ser having at that time funds on
deposit with GMCT. According to Mr Lindsay, this account was opened to finance
dealings conducted by Super Ser in the United States. He said that the funds were
subsequently exhausted in repaying debts owed by Super Ser to Guinness and Mahon.

Appendix XV (123) refers.

130. Mr and Mrs Peter Tamburo
Mr and Mrs Peter A Tamburo resided in 1974 at 2520 Dellago Drive, Fort Lauderdale,
Florida, U.S.A.

In 1974, following discussions with the late Mr Desmond Traynor, John Furze of GMCT
arranged to form a trust and a Cayman company, Windsor Securities Limited, on Mr
Tamburo's behalf. In 1981, the company acquired shares in Tunnel Holdings Limited, a
UK-based manufacturer of asbestos products, which shares were held in the name of
Overseas Nominees Limited, GMCT's nominee company.

Appendix XV (124) refers.

131. Mr Kazuaki Tazaki

Mr Kazuaki Tazaki is a former director of Brother International Corporation (Europe)
Limited ('Brother'). He came to Ireland from Japan in 1960 to take up employment with
that company. He became a member of the board of directors in 1968. In 1970, he left
Ireland to work with Brother in Manchester. When Brother International Corporation
(Ireland) Limited was incorporated in 1974, he became a director of that company also,
while remaining in England, where he continues to reside. At all relevant times, Mr
Tazaki has been resident for tax purposes outside the jurisdiction.

In his evidence on oath to the Inspectors, Mr Tazaki said that when he left Dublin in
1970, he got a bonus payment from Brother. This was transferred to the late Mr Desmond
Traynor by Mr Tazaki's employers. Mr Tazaki could not explain why the money was
sent to Mr Traynor rather than to him. Mr Traynor told him that the money would be
placed in a trust. In the late 70s or early 80s, Mr Tazaki learned that the trust in question
was in the Cayman Islands. Mr Tazaki received statements from Mr Traynor showing
balances for a sterling account coded A/J and for a US$ account in the name of Titan
Investments Limited. He had no doubt that these were statements of the account of his
offshore funds. Documents shown to Mr Tazaki at interview show that these accounts
were in GMCT.

Appendix XV (125) refers.

132. Ms Carmel Traynor

Ms Carmel Traynor, of 63 St Anne's, Kimmage Road West, Dublin 12, is a sister of the
late Mr Desmond Traynor.

In the mid 1970s, Ms Traynor invested a small sum through her brother. She was not
aware of where the money was invested and did not deal with it for many years. On her
brother's death in 1994, she requested the repayment of her investment. Some time later,
another brother, John, made arrangements for the payment of the funds through Mr
Padraig Collery. The repayment was made in cash and the exact sum is unknown to Ms
Traynor.

In reaching their decision, the Inspectors noted the evidence of Mr John Traynor
concerning the closing by him of Ms Carmel Traynor's account, after the death of Mr
Desmond Traynor, through Mr Collery. The only cash under the control of Mr Collery
after Mr Traynor's death was Hamilton Ross money, which had been (in respect of any
money on deposit prior to 1 January 1993) Ansbacher funds. Ms Traynor's money had
been on deposit a far longer time.

The Inspectors conclude that Ms Carmel Traynor was a client of Ansbacher, although she
may have been unaware of the fact.

Appendix XV (126) refers.

133. Mr James Desmond Traynor, deceased

The late Mr James Desmond Traynor was one of the founding directors of GMCT, and
was its representative in Ireland. He was later its Chairman. He commenced his career in
1950 as the first articled clerk in Haughey Boland & Company, Chartered Accountants,
where he remained until 1969. When he left Haughey Boland, Mr Traynor joined
Guinness and Mahon and remained there until 1986. He was a director of Guinness and
Mahon from 1969 to 1986. He was chairman of CRH plc from 1987 until his death in
1994. He was in his later years one of the leading figures in the Irish business
community.

Mr Traynor had substantial deposits with Ansbacher, which at the time of his death were
mostly contained in accounts in the name of Hamilton Ross and Poinciana Fund. Both of
these companies were owned by the Poinciana Trust, Mr Traynor's Cayman Island trust.
Mr Traynor was also the beneficiary of an earlier trust of which GMCT was trustee. It is
not clear whether this trust was taken over by the Poinciana Trust, or whether it continued
to have a separate existence.

Appendix XV (127) refers.

134. Mr Joseph Turley

Mr Joseph Turley (Senior) is a director of Rathdown Motors. His earlier career was in the
car rental business, and he commenced a family firm, Argus Automobiles, sometime in
the 1970s. Loans obtained by Mr Turley from Guinness and Mahon for himself and for
Argus Automobiles, are described by Guinness and Mahon as 'suitably secured' or
'considered adequate'. Mr Turley told the Inspectors under oath that he could not
understand why his loans would be so described, and he denied any connection with
Ansbacher.
An internal Guinness and Mahon document with the title entitled 'Joseph Turley/Argus
Automobiles Limited/GBM Plastics' signed JR/CC and dated 4 September 1989 states
'[Mr Turley's] facilities ... were provided on the basis that security was adequate to the
extent of STG£1m.) Due to the Bank's changing relationship with the offshore
connections and in particular with the departure of Padraig Collery from G&M, it has
been agreed with Mr Turley that our facilities with him/Argus/ GBM should now be
formalised without regard to the adequate security. It is proposed that G&M should take
security over a number of investment properties owned by Mr Turley'. Mr Turley's
knowledge of the backing deposit is clear from the previous reference, and also from an
internal Guinness Mahon & Co memorandum dated 28 September 1989 headed 'J Turley
connection - G&M Dublin'. It includes the following remarks: 'Thepresent limits to the
[Guinness Mahon] Group are set out on page 1 of the accompanying memoranda and
total an exposure of £450,000 and these are currently secured by 'adequate' deposits
which are effectively under [Guinness and Mahon 's] control. The Committee will be
aware of the background of such security and the fact that, in certain cases, this may be
withdrawn in the foreseeable future. This is one case where the customer has been
informed that the Bank would prefer to have such arrangements conducted elsewhere,
unless additional security could be provided.'

Finally, a letter from Mr Desmond Traynor to Guinness and Mahon gives rise to the
inescapable conclusion that the offshore entity holding the backing funds is Ansbacher.
The letter, dated 9 January 1990, is on paper with the Ansbacher letterhead and it
requests a note of balances for a number of accounts, among which are Resident Loan
accounts in the names of GBM Plastics and J Turley. There is no evidence that the
beneficial owner of the backing funds is anyone other than Mr Turley.

Appendix XV (128) refers.

135. Mr Martin Turley

Mr Martin Turley resides at 309 West Columbine Street, Santa Ana, California 92907,
US. In response to the Inspectors' general letter of enquiry, Mr Turley replied that he had
no information relating to Ansbacher. The Inspectors responded with a specific query on
26 June 2000, but have received no further reply from Mr Turley.
A fax dated 11 November 1994 from the late Mr John Furze of Ansbacher directs the
transfer of substantial funds from an Ansbacher account in IIB to an account in the name
of Mr Turley in Ulster Bank Limited, International Division, Belfast.

Mr Martin Turley of 309 West Columbine Street, Santa Ana, California 92907, U.S.A.
has failed to give the Inspectors the co-operation to which they were entitled and arising
there from, consideration should be given by the appropriate authorities as to whether an
application should be made for a disqualification order, pursuant to S. 160.(2)(e)
Companies Act 1990, in respect of Mr Turley.

Appendix XV (129) refers.

136. Sir Charles Villiers, deceased

The late Sir Charles English Hyde Villiers MC was a director of Guinness Mahon
London between I971 and 1976. From documentation available to the Inspectors, it
appears that Sir Charles had an account in GMCT for many years prior to his death.

Appendix XV (130) refers.

137. Dr Oliver Waldron

Dr Oliver Waldron resides at 3 Kingston House North, Princes Gate, London SW7 1LN.

Dr Waldron furnished the Inspectors with an unsworn statement and certain documents.
Dr Waldron informed the Inspectors that he lived abroad between 1965 and 1972. Upon
his return to Ireland from Canada in that year, he established a trust with GMCT. The
beneficiaries were his children. The assets settled on the trust were acquired abroad,
where they were held in a number of companies controlled and managed by GMCT, one
of which was called Inter Agent Limited. Dr Waldron says that small amounts from the
trust funds were paid out to him from time to time in Ireland to defray expenses on behalf
of his children. In 1983, he moved permanently to England, and at that time, he withdrew
all of the trust funds to pay for his children's education.

Appendix XV (131) refers.

138. Mr Joseph Walsh

Mr Joseph Walsh is a retired businessman and former Joint Managing Director of his
family business, P Walsh & Sons Limited, Kilkenny.
Mr Walsh met Mr Desmond Traynor in the course of business, and when, around 1972,
Mr Walsh said he wish to leave some money to his nephews and nieces, Mr Traynor
proposed the creation of a discretionary trust in the Channel Islands. Mr Walsh gave
Mr Traynor in the region of £100,000 by way of a loan to get the trust going, and Mr
Traynor said it could be taken back later if he needed the money. Mr Walsh made no
further lodgments to the trust.

In 1995, Mr Walsh's brother died suddenly and he decided to withdraw the value of his
'original loan' and give the money to his brother's children. By this time Mr Traynor had
also died and Mr Walsh did not know how to make contact with his trust. He sought help
from Mr Paul Carty of Deloitte & Touche who put him in touch with Mr Padraig Collery,
who obtained a withdrawal. At this stage Mr Walsh learned that his trust funds were in
the Cayman Islands.

As part of obtaining information resulting from the Inspectors' inquiry, Mr Walsh's

solicitor telephoned Ansbacher who told him that on 27 November 1989 a Cayman
discretionary trust had been established which owns a Cayman company called Drogheda
Investments Limited. The trust continued in existence after the sole withdrawal.

Appendix XV (132) refers.

139. Mr Ivan Webb, deceased
The late Mr Ivan Webb was Managing Director of G & C Crampton Ltd. He died in June
1972. Shortly before he died, arrangements were made to establish a number of trusts in
the Cayman Islands. There were six in number, designated Whitethorn A, B, C, D, E,
and F. It is clear from correspondence available to the Inspectors that the intention was
that Whitethorn F trust was to be the vehicle to be used by Mr Webb. As Mr Webb died
within three months of these arrangements being made, it is not possible in his case to
describe the exact sequence of events that followed from the preliminary decision to
establish the Whitethorn F trust.

The Inspectors have, however, established that, after the death of Mr Webb, an account
existed in Ansbacher and later under the control of Hamilton Ross Limited, which held
funds apparently intended for the trust. The money transferred to the Ansbacher account
was administered for many years in the same way as other funds deposited at that time,
leading to the conclusion, on the balance of probability, that the trust was in place prior to
the death of Mr Webb. (The Inspectors are further satisfied that the beneficiary of these
funds took no action with regard to the establishment or maintenance of the trust after Mr
Webb's death.)

Appendix XV (133) refers.

140. Ms Joan Williams

Ms Joan Williams of 21 Stradbrook Grove, Blackrock, Co. Dublin, was secretary to Mr
Desmond Traynor, both during his time at Guinness and Mahon and at CRH. She is now
retired.

In her evidence to the Inspectors, Ms Williams said that Mr John Furze of GMCT told
her during one of his visits to Ireland that he would open an account for her in GMCT
and that he would lodge some money to it. She regarded this as a gift. She said that she
had been told that a memorandum account coded 'A/A7' was her account. Mr Furze
made lodgements to the account from time to time. Ms Williams made some withdrawals
from the account, which is still in existence.

Appendix XV (134) refers.

141. Mr Robert Willis

Mr Robert Willis is a former director of Irish Life, CRH and Banque Nationale de Paris.

Mr Willis knew the late Mr Desmond Traynor very well and regarded him highly.
Knowing of Mr Traynor's connection with Guinness and Mahon, Mr Willis asked him to
open a deposit account for him, and from then on, gave cheques to Mr Traynor from time
to time for lodgement to that account. He usually gave him these cheques in an informal
manner, on the premises of CRH. Mr Willis told the Inspectors that he did not know
where Mr Traynor had opened the account, and he did not enquire, as he trusted Mr
Traynor absolutely. He said that whenever he wished to make a withdrawal, he asked Mr
Traynor to transfer funds to an account in the Royal Bank of Scotland. The Inspectors
have a number of documents containing instructions from or on behalf of Mr Traynor to
transfer funds to Mr Willis' account in that bank, and the documents show that the
amounts withdrawn were always debited to an Ansbacher account.

Appendix XV (135) refers.

142. Mr Robert Wilson

Mr Robert Wilson is a businessman and former chairman of Robert Wilson & Sons
(Ulster) Limited and Robert Wilson (Ireland) Limited both of which went into
receivership in 1983. Mr Wilson has been tax resident abroad since 1985.
Mr Wilson came into contact with Mr Desmond Traynor when the latter worked with
Haughey Boland, who provided audit services to the Robert Wilson companies. In the
early 1970s, Mr Traynor became a director and shareholder of the companies.

Around 1977, Mr Wilson discussed with Mr Traynor the creation of a discretionary trust
for the benefit of his family and himself. The trust was set up through GMCT with
£40,000 from Robert Wilson & Sons (Ulster) Limited. The trust operated through a
Cayman registered company called Northern Finance Limited which appears to have
ceased trading as at 4 January 1993.

In 1978, Robert Wilson (Ireland) Limited obtained a loan of IRL£125, 000 from
Guinness and Mahon and this was described as being backed by a Cayman deposit in a
report by the Central Bank as at 30 April 1978.

Over the years from about 1984 onwards, Mr Wilson obtained withdrawals from the trust
funds by contacting Mr Traynor. Some of these were effected by transfers from
Guinness and Mahon and later IIB, directly to Mr Wilson's account in Ulster Bank,
Dublin.

Appendix XV (136) refers.

143. Wilson Bishop Tolley & Co Pty.

Wilson Bishop Tolley & Co Ltd is an Australian-based company. It had a number of
loans with Guinness and Mahon in the 1970s and 1980s. These included loans in 1978 of
US$90,000 and DM150,000. By 1981 these loans were US$90,000 and DM40,000.

These loans were described in the books of Guinness and Mahon as 'suitably secured' in
1978 and as 'fully backed by GMCT' by 1981.
On 27 January 1981 an internal Guinness and Mahon memorandum advises Mr Desmond
Traynor of funds in US$ and DM placed in Guinness and Mahon through GMCT.

A note from GMCT dated 3 March 1981 also connects Wilson Bishop Tolley & Co Pty
Ltd with GMCT.

Appendix XV (137) refers.

144. Adolf Franz (Burschi) Wojnar, deceased

The late Mr Adolf Franz Wojnar (normally known as Mr Burschi Wojnar) was a Dublin
based businessman who was involved in a number of companies up to the date of his
death on 7 May 1993. These entities included MW Wallpaper Specialists Ltd, Fletcher &
Phillipson Ltd and Foxrock Securities Ltd.

The Inspectors interviewed Mr Wojnar's sons, Christopher and Bernard, for the purpose
of assessing whether their father was a client of Ansbacher.

The following transactions were identified by the Inspectors as relevant to the issue:

In early 1977, Foxrock Securities Ltd borrowed a sum of £9,000 guaranteed by Mr

Burschi Wojnar. Under the heading of security, an internal Guinness and Mahon
document notes that a ''Suitably secured' situation will exist in due course.'

Later in 1977, MW Wallpaper Specialities borrowed a sum of £10,000 from Guinness

and Mahon. This was described as 'suitably secured' in the books of Guinness and
Mahon and was to be guaranteed by Mr Burschi Wojnar.

In 1978, Fletcher & Phillipson Ltd borrowed a sum of £87,000 so that Mr Burschi
Wojnar could purchase shares in that company, held by his wife, as part of a family
arrangement. The borrowing is described in the books of Guinness and Mahon as
'suitably secured' to the extent of £37,500. Mr Wojnar guaranteed this loan also.

A document produced by Guinness and Mahon in 1978 for the Central Bank lists the
Foxrock Securities loan as backed by a Guernsey deposit.

A report from Guinness and Mahon to their London Head office, dated 24 December
1986, lists Fletcher & Phillipson as a College Trustee client for whom College have
arranged backing deposits in Dublin through GMCT.

A further loan of £100,000 in 1988 was guaranteed by Mr Burschi Wojnar and

designated 'considered adequate'.

While there are many references in the documents available to the Inspectors describing
loans as 'suitably secured' or 'adequately secured', there is only one document which
identifies an Ansbacher connection i.e. the list of 24 December 1986 referred to above.

Mr Christopher and Mr Bernard Wojnar in evidence stated that they had no knowledge of
any of the above transactions. They were directors of the family companies over many of
the relevant years and they confirmed that these companies did not appear to have any
offshore funds

It is noteworthy that the late Mr Burschi Wojnar, who was the principal shareholder in
the companies, guaranteed each loan. It therefore appears probable that the offshore
funds were under the control of Mr Burschi Wojnar.

In addition to the foregoing Mr Jack Stakelum has confirmed, on foot of a requirement

from the Inspectors, by letter 30 July 2001 that Mr Burschi Wojnar had offshore deposits
through his system.

Appendix XV (138) refers.

145. Mr Richard Wood
Mr Richard Wood is chairman of John A Wood Limited. He was a director of CRH from
1981 to 1997.

Mr Wood gave evidence that his late father was involved with a group of businessmen in
property speculation in the 1960s and 1970s. They established a trust in the Cayman
Islands called the Whitethorn No 7 Trust. This trust owned all the shares in a company
called Hexagon Securities Limited ('Hexagon'). The funds of the trust were deposited in
Hexagon's name in GMCT, in accounts coded A/G. Mr Wood's father died on 29
January 1972. A letter dated 16 March 1977 from Mr John Furze of GMCT to Mr Wood,
sending him statements in relation to the trust and asking him to sign them, indicates that
GMCT regarded Mr Richard Wood as its client. Upon the dissolution of the trust in 1977,
the funds were distributed to Youghal Development Company Limited, of which Mr
Woods was the sole shareholder, and Thrush Securities Limited, of which he also was a
shareholder, although it is unclear to what extent.

Appendix XV (139) refers.

146. Mr Christopher Woodward

Mr Christopher Woodward of 3 The Green, Branksome Hill Road, Dorset, United
Kingdom, was an employee of Guinness Mahon Jersey Trust, who was the Settlor of
many of the trusts established in Jersey through a Guinness and Mahon subsidiary on that
Island. In 1975, these trusts were re-organised so that Guinness and Mahon Jersey Trust
Limited took over as trustees. Some time later, Mr Woodward resigned as director of the
companies operating the trusts. By 1984, correspondence with Guinness and Mahon
shows that Mr Woodward had broken or was about to break all links with the operation
and his concern was to relocate to London. In the event, this occurred.
Any examination of the documents in which Mr Woodward's name appears is
complicated by his nominal involvement in the affairs of others. The benefit of the doubt
has been given to Mr Woodward and all references that appear to relate to his work as a
trust official, have been assumed to be on behalf of others.

When the above exclusions have been made there remain a number of references that
appear to relate to Mr Woodward as an individual. There are clear references in these
documents to a GMCT account in the name of Mr Woodward and to the involvement of
Mr John Collins, a GMCT executive, in the private affairs of Mr Woodward.

Appendix XV (140) refers.

147. Mr Ronald Warren Woss

Mr Ronald Warren Woss c/o 14 Business Park Drive Notting Hill Victoria 3168
Australia is a businessman who had a close connection with the late Mr Desmond
Traynor. He was a director of a number of companies within the trust structure of Mr
John Byrne i.e. Danstar Holdings Pty (an Australian company) and Tepbrook Properties
Limited an UK company. The reasons for these involvements are not known but they do
not appear to be connected with any ownership.
The Inspectors have written to Mr Woss seeking his assistance in their work without any
response.

A number of records available to the Inspectors have references to Mr Woss. An

Ansbacher letter dated 11 February 1991 to IIB seeks a payment to Mr Woss from
memorandum account A/A3 6. Further, a letter from Hamilton Ross directs a payment
from Hamilton Ross account A/A26 to a travel company apparently in connection with
the travel arrangements of Mr Woss. These references on their own would not be
sufficient to suggest a connection between Mr Woss and Ansbacher of the type on which
the Inspectors are required to report.
From the time the business was transferred to IIB from Guinness and Mahon in 1991
accounts were in existence under the code A/A26 in the name of Ansbacher and later
Hamilton Ross. These were always treated in a special way and were the subject of a
weekly report from Ireland to Australia. This reporting was not done directly by IIB or
Ansbacher/Hamilton Ross but was organised by Mr Sam Field Corbett, a Dublin based
provider of secretarial and other services through a company called Management and
Investment Services Ltd. The Inspectors were anxious to establish the beneficial owner
of the A/A26 funds and raised the issue with Mr Field Corbett. He informed the
Inspectors that he was not aware of who was the ultimate owner as he was only providing
the service at the request of Mr Traynor. He did however confirm that the person to
whom he conveyed the weekly information was Mr Woss in Australia. The weekly
reporting from IIB was a continuation of a similar system, which operated when the
funds were in Guinness and Mahon.

This latter information together with the above mentioned payments are sufficient to
allow a conclusion to be drawn.

Appendix XV (141) refers.

23.4 Category B: List of persons who were clients of Ansbacher through College
Trustees.

1. Mr Douglas Armstrong
2. Blue Jeans Limited and JB Agencies Limited
3. Mr Ray Carroll
4. Mr Liam Cassidy
5. College Trustees
6. Mr Tom Conaty
7. Mr Stephen Daly - deceased
8. Mr William Forwood and Mrs Joyce Forwood
9. Mr Ronald T Fredette
10. Mr Colm Hyland
11. Mr Denis McCarthy
12. Mr Harold F Murray

13. Mr Brian Rhatigan

23.5 Description of Category B clients

1. Mr Douglas Armstrong

Mr Douglas Armstrong has been involved in a number of companies in the electronic

field over many years. One of the main companies was Armstrong Electronics Limited.
Mr Jack Stakelum is a long time associate and advisor. Mr Armstrong has had a long
time business relationship with Guinness and Mahon. Mr Armstrong was interviewed on
January 31 2001 for the purpose of establishing whether he was a client of Ansbacher.
Because of the contradictions between the evidence given by Mr Armstrong, which
evidence was supported in writing by Mr Stakelum, and the documentary information
available to the Inspectors, it is necessary to set out in some detail the facts of the case.
The following facts are evident from the documentation in the hands of the Inspectors:

1. Armstrong Electronic Limited and its associated firms have been doing business
with Guinness and Mahon since the mid 1970s.

2. Money was borrowed from time to time to finance the business of various
companies.

3. Many of the loans were designated within Guinness and Mahon as 'adequate'
'considered adequate', or 'adequately secured'. This has always, in the
experience of the Inspectors, meant a back-to-back security not necessarily based
on Ansbacher funds. Mr Stakelum does not agree that this is a correct
interpretation. Three documents dated September 1985 (in some cases the date is
arrived at by inference), and further documents dated November 1986, 1 June
1988, April 1990 all use these formulae of words indicating security outside this
jurisdiction.

4. The route by which this security existed is signposted in a Guinness and Mahon
memo dated 24 December 1986, which identifies Armstrong Electronics' security
as being in a category, which Guinness and Mahon call 'College Trustees clients
for whom College have arranged backing deposits here through G.M.C.T.'

In evidence Mr Armstrong was unable to explain these matters but maintained his
position that neither his nor any other money abroad had backed his companies
borrowings.

The Inspectors concentrated on the Jersey Island connection, as this appeared the likely
original source of any backing funds. On his firm's involvement with Jersey Mr
Armstrong made a number of statements:
 (a) At page 23 of the transcript he seems to suggest that he had no business in Jersey
but this is taken by the Inspectors to be an error of understanding and Mr
Armstrong is given the benefit of the doubt in this regard.
(b) He states at page 5 of the transcript as follows:
Q. You are using a Jersey based company for your non-Irish
activities, is that right?
A. No not at the moment, no. We did one time.
(c) When asked the name of his Jersey Company at page 24 of transcript Mr
Armstrong identifies the company as Enterprise Trading, which was not owned by
him but by Mr Stakelum.

However, an internal Guinness and Mahon memo dated 14 June 1991, based on an
interview between Mr Stakelum and Mr Armstrong on the one hand and the
Guinness and Mahon on the other, reports as follows:

'Outside of the Armstrong operation D.A. has expanded his activities into Europe
using a Jersey based company'.

In addition to Armstrong Electronic Limited a back-to-back loan was negotiated for

Wilfield Securities Limited, another Armstrong company.

The Inspectors have considered the evidence in its entirety and conclude that on the
balance of probability the power to dispose of and pledge the offshore funds rested with
Mr Armstrong as the majority shareholder in the Irish companies who received cash
backed loans. In a situation where Mr Armstrong was the owner of almost 100% of the
shares in the various companies, the likelihood of any other person providing back-to-
back cover was remote.

Appendix XV (142) refers.

2. Blue Jeans Limited and J B Agencies Limited.
Blue Jeans Limited was a Guernsey based limited liability Company. It was operated and
controlled by College Trustees Limited until it was liquidated in 1995.

It is clear that, over a long number of years, Blue Jeans had deposits under the control of
College Trustees. As part of the scheme operated in the 1980s by the Guinness Mahon
group of companies, the Blue Jeans Limited account was directed through GMCT.

Blue Jeans had a strong Irish connection. On 7 February 1986 an account in the name of
the company was opened in Guinness and Mahon by way of the lodgement of
STG£22,462.90. This account continued to operate until 4 February 1987.

There are also many examples in the Guinness and Mahon files of loans by
Guinness and Mahon to an Irish company JB Agencies Limited by way of letter of credit
facilities between 1986 and 1990. These borrowings were backed by guarantees given by
Blue Jeans Limited from its Guernsey office. Typical of such arrangement is a faxed
note dated 26 June 1990 from Blue Jeans Limited to Guinness and Mahon as follows:

'We wish to confirm that we are willing to guarantee letter of credit facilities to
yourselves up to a maximum of Sterling £475,000. We can provide collateral in
the form of cash deposits in support of any such guarantee. (Signed) For Blue
Jeans Limited.'

Blue Jeans Limited was operated by College Trustee personnel from the office of College
Trustees Limited in Guernsey. In common with many of College Trustee clients, the
money it held on deposit was channeled through GMCT. This is borne out by a letter
dated 12 January 1988 from Blue Jeans Limited to Guinness and Mahon, which
authorized the disclosure of information to the firm's auditors of account referred to as
'Guinness Mahon Cayman Trust Limited for account of Blue Jeans Limited'. An
internal Guinness and Mahon account listing has a similar listing.
The Inspectors have attempted to identify the owners of Blue Jeans Limited. Mr James
Sweeney and Mr Terry Kennedy, the owners of JB Agencies, the firm receiving the
guarantee, gave evidence that the Guernsey firm was an offshoot of their Belgian
supplier. The Belgian supplier (Mr Roland Wallaert) denies this in equally strong terms.
Because of the lack of cooperation of College Trustees, that issue has not been easily
resolved.

The Inspectors have attempted to uncover other external information which would
indicate which of the explanations is most likely correct.

No information has been discovered linking Mr Wallaert to Blue Jeans other than the
testimony of Mr Sweeney and Mr Kennedy, which is disputed by Mr Wallaert.

There are two matters showing a link with J B Agencies and/or its principals.

1. A letter dated 5 September 1985, Mr Collery (of Guinness and Mahon) to

Guinness Mahon Guernsey Limited, which refers to a payment to 'Mr Jim
Sweeney of Blue Jeans Ltd'. Mr Sweeney explains this as a contribution to a
cinema advertising campaign by Wally Jeans (the supplier owned by Mr
Wallaert) to J B Agencies.

2. An internal Guinness and Mahon credit memorandum of 27August 1988

contains the following note: J B Agencies has been a client since 1983. As
turnover increased so did its L/C requirements. The appendix summarizes the
trading results and financial position. Small profits/break even has been the
norm though this does not accurately reflect the true nature of the business.
Accounts for year ended 30/4/1988 are due shortly and are expected to show an
increase in declared profits. Management is experienced in rag trade and the
account is well conducted. Security is considered adequate to the extent of
IR£307k. This is likely to increase to IR£400k approximately in the coming
year.
 This reference to IRL£307k is a reflection of the same sum stated to be
available for back-to-back purposes at that time. It is clear that the author of
the above document within Guinness and Mahon thought that J B Agencies
beneficially owned the deposit of Blue Jeans Limited

The net value of the Irish company (J B Agencies Ltd) in 1988 was IRL£12,353
and in 1989 IRL£19,369. This was obviously not adequate for the level of
borrowing needed. It follows that offshore funds were funds that were owned
by the company or its promoters, on which Guinness and Mahon could rely.

Appendix XV (143) refers.

3. Mr Ray Carroll

Mr Ray Carroll 6 Clonfadda Wood Blackrock Co Dublin is a retired businessman. The

Murray group of companies formerly employed him in the capacity of Chief Executive.
His alleged involvement with Ansbacher can only be understood in the context of his
employment and his shareholding in the Murray group. It is therefore necessary to set
out in broad terms the reasons why this shareholding is relevant to the issue to be decided
by the Inspectors.
Mr Harold F Murray was the founder of the Murray group of companies, which group
has been involved in the car sale, rental and general motor trade in Ireland over many
years.

In 1974 the late Mr Murray caused to be established a trust based in Jersey called the
Woodward Trust. The trust operated through Sumac Investments, a Jersey based
company. According to evidence received by the Inspectors, the money deposited was
money realised by the sale of a company asset.
College Trustees managed money sent to the Woodward Trust in 1974. For some time
the funds were in Guinness and Mahon in Dublin having been deposited from Jersey but
later in or around 1981 these funds were channelled through Ansbacher under its then
title of GMCT. This was done without reference to those who controlled the funds.

Evidence was given that up to 1994 (when the money was withdrawn and declared for
the tax amnesty) the funds of the trust were used to back loans to the group.

Some money was distributed from Jersey to the beneficiaries in 1980. The beneficiaries
included Mr Ray Carroll who had a 9% interest in the Murray group and a similar
entitlement to the funds lodged abroad. At that time, however, the GMCT connection
may not have occurred and this payment is considered by the Inspectors not to be an
Ansbacher connected transaction but is relevant in establishing Mr Carroll's ownership of
part of the trust funds.

The Inspectors received evidence that the money was ultimately transferred to a number
of directors of the Murray Group at the time of the tax amnesty under the direction of Mr
Harold F Murray.

In respect of Mr Ray Carroll, an issue arises as to whether he was the true owner of part
of the funds at the time these funds were on deposit in GMCT. He was the Chief
Executive of the Group between 1977 and 1991. The Inspectors conclude that his
entitlement to part of the funds was established as a right from at least 1980 and that his
share was not dependant on the grace and favour of Mr Harold F Murray or any other
person but was a right which could have been enforced in law from 1980 onwards at the
latest. In so far as it is clear from the documentation that the offshore funds of the Group
were in GMCT from 1981 onwards, Mr Ray Carroll must be considered a client of the
company now known as Ansbacher by reason of his ownership of part of those funds.

Appendix XV (144) refers.

4. Mr Liam Cassidy
Mr Liam Cassidy is a former director of Cassidy Silks Limited. Because of his present
state of health, he declined to attend for interview, and he provided a medical certificate,
which the Inspectors were happy to accept. However, without the benefit of Mr Cassidy's
assistance, the Inspectors have been obliged to arrive at their preliminary conclusions on
the basis of documentary evidence.

Mr Cassidy is adamant in his correspondence with the Inspectors that he never had any
connection with Ansbacher. However, Guinness and Mahon documentation shows that
Cassidy Silks had a loan in the 1970s that is described as 'suitably secured' Further
documentation shows that Mr Cassidy and his wife Vera obtained travellers cheques from
Guinness and Mahon in 1985, and that the cost of the cheques was debited to an account
in Guinness and Mahon entitled 'GuinnessMahon Cayman Trust/College'. This account
held monies belonging to clients of College Trustees, which College Trustees had
deposited with Ansbacher, frequently unknown to those clients. The Inspectors have
therefore concluded that Mr Cassidy placed funds with College Trustees in the Channel
Islands, and that College Trustee deposited those funds with Ansbacher.

Appendix XV (145) refers.

5. College Trustees Ltd

College Trustees Ltd itself has been found to be a client of Ansbacher from 1981 to 1989
approximately.

Appendix XV (146) refers.

6. Mr Tom Conaty
Tom Conaty Ltd with a registered office at 73 May Street, Belfast 1 and a place of
business at Balmoral Fruit Market is involved in fruit brokering. Mr Tom Conaty is the
majority shareholder in the company.

As early as 1977, Guinness and Mahon (Ireland) Limited (hereinafter Guinness and
Mahon) was granting loans to Tom Conaty Ltd. The loans were described as 'suitably
secured' indicating a deposit outside the jurisdiction not necessarily Cayman based.
There is a similar reference in a 1978 loan.

In April 1988, an executive directors' meeting within Guinness and Mahon considered an
application to renew the facility of Tom Conaty Ltd of Balmoral Fruit Market Belfast.
The application was supported by a guarantee of Mr Tom Conaty and was designated as
'adequately secured'.

On 16 May 1983, Tom Conaty Ltd was paid STG£1,500 from a Guinness Mahon
Cayman Trust / College account.

Mr Tom Conaty of 4 O'Neill's Place, Holywood, Co Down, a director of the company,

was written to concerning these matters but did not respond until the Inspectors issued a
preliminary conclusion to him. By letter of 13 September 2001, Mr Conaty's solicitor
forwarded a statement from their client. It is clear from the statement provided by Mr
Conaty that Mr Conaty held funds offshore through College Trustees. It is also evident
from the documentation relating to the payment of 16 May 1983, referred to above, that
College Trustees held those funds in a GMCT/College Trustee account in Guinness and
Mahon. The Inspectors note that Mr Conaty submits that he gave instructions to College
Trustees to hold the funds in Guernsey rather than the Cayman Islands.
Mr Conaty accepts in his statement that: The money was held for his benefit.... In those
circumstances it is not proposed to make any adverse conclusion against the limited
liability company.

Appendix XV (147) refers.

7. Mr Stephen Daly, deceased

The late Mr Stephen Daly was a primary school teacher until his retirement in 1988. As
a summer holiday activity between 1958 and 1974, he organized 'affinity charter' flights
to the US as a one-man operation. In 1974 he set up Irish Teacher Projects Ltd, which
organised educational tours for teachers to the US. He subsequently operated ITP Travel
Ltd.

Surpluses arising from his charter operations were deposited with Guinness Mahon
Guernsey in 1978 on the advice of Mr Martin Keane. College Trustees controlled the
funds in an account reference GMCT / College ref. TC431 which was part of the Elinor
Trust, of which Mr Daly was the beneficial owner.

Mr Daly communicated periodically with College Trustees about his investment, which
was spread over a number of foreign currencies managed by NM Rothschild & Sons (CI).

Mr Daly made a further lodgement to the Elinor Trust in 1983, whereby he took funds to
the UK for lodgement to the Channel Islands via the Isle of Man.

Mr Daly terminated his relationship with Ansbacher in 1994.

Appendix XV (148) refers.

8. Mr William Forwood and Mrs Joyce Forwood

Mr William Forwood qualified as a solicitor and became a partner in a law firm in
London. In 1967 he was invited to join Guinness and Mahon, and became co-Managing
Director in 1968 with Sir George Mahon and Mr John Guinness, specialising in the area
of mergers and acquisitions. Mr Forwood was involved in setting up the GMCT
corporate legal arrangements in the early 1970s. In May 1976, Mr Forwood
discontinued his employment with Guinness and Mahon and resigned as a director in
November 1976.

Around 1969 / 1970, Mr Forwood caused a Channel Islands trust called Rockford
Investments to be set up for the benefit of his wife, Joyce, and himself as well as others,
into which was invested the property associated with a one third share of a farm in
Buckinghamshire inherited from Mrs Forwood's father. College Trustees administered
the trust. Mr Forwood believes other assets were subsequently invested in the trust.
Mr and Mrs Forwood were beneficiaries under this trust, which was wound up in 1993.

At some stage in the early 1980s, Guinness and Mahon arranged for the funds held in the
trust to be invested through GMCT, and a Guinness and Mahon bank statement of
January 1987 for an account named Guinness Mahon Cayman Trust / College records a
lodgement of STG£2,000 're. Rockford'. Further confirmation of the position is recorded
in a letter of 17 May 1991 from Ansbacher requesting IIB to accept lodgement of a
cheque payable to Rockford Investments for STG£1,057.50 to an Ansbacher account No.
02/01087/81.

Reference to the linking of the Rockford Investments assets to loans made by

Guinness and Mahon to a property development company called York Securities Limited
is contained in an extract of a 1985 Guinness and Mahon report to the Central Bank
entitled 'Loans set-off against Deposit Accounts'. This links IR£ loans to York
Securities with a deposit in the name of Rockford Investments. Mr Forwood said he
was unaware that Guinness and Mahon had linked the loans to the Rockford Investments
deposit. This had been done without his authority, and in any event the trust assets were
largely land rather than cash.
A further reference to the backing of the loans to York Securities Limited, in which Mr
Forwood held an equity interest together with others, is demonstrated by a Guinness and
Mahon credit committee memorandum of 1986 in which the security for three loans to
York Securities was described as 'adequate', and the comment that 'the loan is cash
backed'.

The Inspectors conclude that Mr William Forwood and Mrs Joyce Forwood were clients
of Ansbacher, but accept that they thought, wrongly, that, as their trust was in the
Channel Islands, their deposit was also there.

Appendix XV (149) refers.

9. Mr Ronald T Fredette
Mr Ronald D Fredette with an address in 1985 at 63 Soundview Road P.O. Box 471
Guilford, Conneticut O6437, US, had a banking relationship with Guinness and Mahon in
the mid 1980s. Money was also lodged to an US $ account in Guinness and Mahon with
the account holder as Guinness Mahon Cayman Trust/College re R Fredette.

Appendix XV (150) refers.

10. Mr Colm Hyland

Mr Colm Hyland was a shareholder in and director of GB Miller. Guinness and Mahon
documentation describes a loan furnished to Mr Hyland in 1977 as being 'suitably
secured'.

In evidence on oath, Mr Hyland told the Inspectors that while he was a shareholder in GB
Miller, a trust was established in the Channel Islands for the purpose of lodging overseas
commission earned by the two shareholders, Mr Hyland himself and Mr Geoffrey Miller.
Mr Miller had earlier given evidence to the Inspectors that in fact an offshore company
was established. It is not clear whether or not there was a trust, as Mr Hyland thinks, but
in any event Mr Hyland understood at the time that he could withdraw money from time
to time in Ireland. He did this through Mr Padraig Collery. Mr Hyland believes that the
fund was at all times in the Channel Islands. However, a Guinness and Mahon statement
of account in the name Guinness Mahon Cayman Trust/College shows two transactions
in 1984 with the reference 'Hyland\ showing that the funds had been deposited by
College trustees with GMCT. Mr Hyland was a client of Ansbacher, although he was not
aware of that fact.

Appendix XV (151) refers.

11. Mr Denis McCarthy

Mr Denis McCarthy was the Managing Director, and then Chairman, of Odearest until
his retirement in the early 1980s. He was also a long time non-executive director of
Eagle Star insurance group, and was on the board of Beaumont Hospital. His interest in
horse racing gave him the opportunity to be on the board of Leopardstown Racecourse,
and to become the Senior Steward of the Turf Club.

In the early 1970s Mr McCarthy met Mr Desmond Traynor at a dinner party. Sometime
later, in 1973, Mr McCarthy decided to invest his share of the profit from the sale of a
successful horse in an offshore account. He gave a cheque to Mr Traynor who arranged
for the funds to be invested in a Guernsey company called Chunga Investments Limited.

Although he does not remember signing any documents, he thought Mr Traynor

mentioned a discretionary trust, and records provided by College Trustees show that, in
December 1978, a discretionary trust known as The Garenne Trust was set up with
College Trustees acting as trustees.
Around 1981/82, Guinness and Mahon decided to redeposit much of the monies invested
in Guernsey under the control of College Trustees, with GMCT / Ansbacher in the
Cayman Islands. On 20 November 1981, the balance of US$25,092.26 held in an US
dollar external call deposit account with Guinness and Mahon (ref: GMCT re. College
B/G Account no. 32713/03/68) was transferred to Chunga Investments. The Inspectors
infer that this transfer was an amount beneficially owned by Chunga which originated in
a GMCT / Ansbacher account.

Other payments by Ansbacher, possibly for fees and expenses, were made on behalf of
Chunga to College Trustees through a Guinness and Mahon account entitled
GMCT/College Sundry Sub Co Account no. 63127/02/16

Appendix XV (152) refers.

12. Harold F Murray

Mr Harold F Murray was the founder of the Murray group of companies which group has
been involved in the car sale, rental and general motor trade in Ireland over many years.
In 1974, the late Mr Murray caused to be established a trust based in Jersey called the
Woodward Trust. The trust operated through Sumac Investments Ltd, a Jersey based
company.

College Trustees managed money sent to the Woodward Trust in 1974. For some time
the funds were lodged in Guinness and Mahon in Dublin from Jersey but later, in or
around 1981, these funds were channelled through Ansbacher under its then title of
GMCT. This was done without reference to Mr Murray.

Mr Harold T Murray (son of Harold F) gave evidence that, up to 1994 (when the money
was withdrawn and declared for the tax amnesty), the funds of the trust were used to back
loans to the group. Further, the money was at all times available to Mr Harold F Murray
to be used as he thought fit.

Appendix XV (153) refers.

13. Mr Brian Rhatigan

Mr Brian Rhatigan is a former director of Rhatigan Holdings and Rhatigan Developments

and is now a self-employed project management consultant. Both in his unsworn
statement and in his sworn evidence, Mr Rhatigan denied any involvement with
Ansbacher. When shown a document indicating that he had withdrawn funds for
travellers cheques from an account in Guinness and Mahon entitled 'GMCT re College',
Mr Rhatigan said he did not know what that account was, and repeatedly said he did not
remember whether he had ever received travellers cheques from Guinness and Mahon.
When shown other documents in which Guinness and Mahon loans given to himself and
to companies controlled by him and a partner were described as 'suitably secured' Mr
Rhatigan said that he was aware from the media what the term was supposed to mean, but
that 'other people might not agree with them'.

The Inspectors are satisfied that Mr Rhatigan's funds were initially on deposit with
College Trustees in the Channel Islands. Together with other funds belonging to Irish
residents, these were placed on deposit in Ansbacher's bank in the Cayman Islands by
College Trustees (often unknown to the clients), and formed part of an account held in
Guinness and Mahon and entitled 'GMCT re College Trustees'.

Appendix XV (154) refers.

23.6 Category C: List of persons who were clients of Ansbacher through Mr Jack
Stakelum

1. Mrs Margaret Clifford

2. Mr Thomas Clifford
3. Mr William Clifford - deceased
4. Ms Olga Gray
5. Mr Gerard Keane
6. Mr Austin C Murray
7. Mr William Quinn and Mrs Eileen Veronica Quinn - both deceased
8. Dr Tom Tiernan
9. Mr Patrick Tolan

23.7 Description of Category C clients

1. Mrs Margaret Clifford

Mr William Clifford (deceased), formerly of The Spa Tralee, Co Kerry, had a business
relationship with Jack Stakelum. Mr Clifford was a director of Princes Investments
Limited, which had an adequately secured loan with Guinness and Mahon. The security
used for this loan is not clear but Mr Clifford had money on deposit through Mr Stakelum
between 1976 and the date of his death in 1981. Mr Clifford may not have been aware of
the exact location of his deposits.

Mr Clifford is on a list of clients relevant to this investigation supplied by Mr Stakelum

following a requirement by the Inspectors. The list supplied by Mr Stakelum indicates
that Mrs Clifford closed the account in 1987/8. The account therefore continued for
some four years after Mr Clifford's death. Mrs Clifford has dated the closing of the
account as March 1994.
Mrs Margaret Clifford was a client of Ansbacher from the date of her husband's death in
1981 until 1994.

Appendix XV (155) refers.

2. Mr Thomas Clifford
Mr Thomas Clifford, of the Kerries, Tralee, Co. Kerry, had a business relationship with
Jack Stakelum. Unfortunately, due to age and infirmity, Mr Clifford has been unable to
assist the Inspectors. No blame is attached to Mr Clifford in respect of his unavailability.

Mr Clifford was a director of Princes Investments Limited who had an adequately

secured loan with Guinness and Mahon. He had money on deposit through Mr Stakelum
between 1976 and 1987/8. Mr Clifford may not have been aware of the exact location of
his deposits. Mr Clifford is on a list of clients relevant to this investigation supplied by
Mr Stakelum following a requirement by the Inspectors.

Appendix XV (156) refers.

3. Mr William Clifford, deceased

The late Mr William Clifford, formerly of The Spa Tralee, Co Kerry, had a business
relationship with Jack Stakelum. Mr Clifford was a director of Princes Investments
Limited, which had an adequately secured loan with Guinness and Mahon. The security
used for this loan is not clear but Mr Clifford had money on deposit through Mr Stakelum
between 1976 and the date of his death in 1981. Mr Clifford may not have been aware of
the exact location of his deposits.

Mr Clifford is on a list of clients relevant to this investigation supplied by Mr Stakelum

following a requirement by the Inspectors.
Appendix XV (157) refers.

4. Ms Olga Gray
Ms Olga Gray of 9, Essen Road, Ormande 2091, Johannesburg, had a business
relationship with Jack Stakelum. She gave money to Mr Stakelum in the mid 1980s and
it remained under Mr Stakelum's control until 1987/8. The money was given to Mr
Stakelum to be put on deposit outside this jurisdiction Mr Stakelum carried out these
instructions. Ms Gray may not have known where the money was deposited. Ms Gray is
on a list of clients relevant to this investigation supplied by Mr Stakelum following a
requirement by the Inspectors.

Appendix XV (158) refers.

5. Mr Gerard Keane
Mr Gerard Keane is the beneficial owner of Gerry Keane Limited, a wholesale and retail
paint and wallpaper business in Dublin.

He was a client of Jack Stakelum, to whom, from 1983/4 onwards, he gave monies to
place on deposit for him. It was his understanding that Mr Stakelum would place the
money on deposit in an undisclosed offshore account. Mr Keane did not know where the
money was held.

In 1988, Mr Stakelum sought advice from Mr Desmond Traynor of Guinness and Mahon
who arranged on Mr Keane's behalf to have a Channel Islands registered company called
Beesley Properties Inc ('Beesley') purchase a house at 54 Heytesbury Lane, Dublin. Mr
Keane agreed that the money used by Beesley to fund the purchase came out of the
monies he held on deposit through Mr Stakelum. Initially the house was rented to Mr
Keane.
Beesley was the recipient of a lodgment in 1988 through an Ansbacher account in
Guinness and Mahon described as Guinness Mahon Cayman Trust / College Sundry Sub
Co account.

In 1990, Mr Keane agreed to acquire the house from Beesley (which he effectively
controlled) and borrowed the necessary funds from Allied Irish Finance. These funds
were given to Killeen solicitors, who paid a cheque to Mr Traynor which was deposited
by him in an Ansbacher account, no. 13154602, in IIB, as set out in his letter of 27 March
1990.

In 1994, Mr Stakelum withdrew £100,000 of Mr Keane's funds at his client's request.

Appendix XV (159) refers.

6. Mr Austin C Murray
Mr Austin Celsus Murray is an architect. He and his wife Jean Murray are directors of the
unlimited company Austin C Murray.

The names of Austin and Jean Murray appear on a Guinness and Mahon list of loans
described as 'suitably secured'. This gave rise to the inference that they had money in an
offshore account. The Inspectors are satisfied however, from information provided by
both Mr and Mrs Murray, that Mrs Murray was unaware of the existence of any such
account, and that she was not beneficially entitled to any funds it might contain.

Mr Murray told the Inspectors that, to his knowledge, he never had monies in the
Cayman Islands. He said that, in 1974, he placed money on deposit with Guinness and
Mahon, and that this money was placed in an account in his name in the Channel Islands.
At a later stage, Mr Jack Stakelum looked after these funds for him, and he understood
that Mr Stakelum placed them in a collective account held by him. Mr Murray was
unaware where that collective account was held.
Appendix XV (160) refers.

7. Mr William Quinn and Mrs Eileen Veronica Quinn, both deceased

Mr William Quinn, deceased, formerly of 15 Offington Park, Sutton, Dublin 13 had a
business relationship with Mr Jack Stakelum. This commenced in the late 1970s and
continued until Mr Quinn's death in 1985. Money was given to Mr Stakelum to be
invested outside the jurisdiction. Mr Stakelum carried out these instructions. Mr Quinn
may not have known where the money was deposited. His wife, Mrs Eileen Veronica
Quinn, now also deceased, continued the account after his death. Mr Quinn is on a list of
clients relevant to this investigation supplied by Mr Stakelum following a requirement by
the Inspectors.

Appendix XV (161) refers.

8. Dr Tom Tiernan
Dr Tom Tiernan of 529 Howth Road, Raheny, Dublin 5 was a client of Jack Stakelum, to
whom, during the period 1976 to 1980, he gave monies to place on deposit. He had no
knowledge of where the deposits were held or any contact with any financial institution.
He made no withdrawals until Mr Stakelum advised him that he was retiring when the
balance on his account was transferred elsewhere. Dr Tiernan is on a list of clients,
relevant to this investigation, supplied by Mr Stakelum following a requirement by the
Inspectors.

Appendix XV (162) refers.

9. Mr Patrick Tolan
Mr Patrick Tolan is resident at 40, Elkwood, Rathfarnham, Dublin 14. He was a client of
Mr Jack Stakelum to whom, during the period 1983 to 1988, Mr Tolan gave untaxed
income of which he was in receipt. His understanding was that Mr Stakelum would place
the money on deposit in an undisclosed account, which also held the monies of other
persons. Mr Tolan did not know where the money was held.

Appendix XV (163) refers.

23.8 Category D: List of persons whose sole involvement was the establishment of
Ansbacher trusts to which they never transferred any assets

1. Mr Neil McCann
2. Mr Philip Monahan

3. Mr Alex Spain

23.9 Description of Category D clients

1. Mr Neil McCann

Mr Neil McCann is a director of Fyffes plc. In the mid-1950s, he took over the family
company, which was then known as Charles McCann Limited. In 1968, a new company
was incorporated - Fruit Importers of Ireland Limited in which Mr McCann was a
majority shareholder, holding about 60% of the shares. The rest of the shares were
divided among a number of people. Fruit Importers of Ireland Limited ceased trading in
1980. Its trade and assets were transferred to a new and previously unconnected
company, FII plc, which in 1986 purchased Fyffes, and subsequently changed its name to
Fyffes plc.
A copy letter from Mr McCann to GMCT refers to a Deed of Settlement dated 3 March
1972, by which John Andrew Furze appointed GMCT as Trustees of a settlement for the
benefit of the issue of the late Charles McCann and Rosetta McCann. The letter states
that in its capacity as Trustee of the said settlement, GMCT, through its nominees, owned
the entire issued share capital of a company called Blue Limited. Mr McCann told the
Inspectors that he had no such trust, and had no recollection of ever having seen the letter
until it was furnished to him recently by SKC, his financial advisers. In the letter, Mr
McCann goes on to authorise GMCT to transfer the entire issued share capital of Blue
Limited to a third party

However, a letter dated 28 December 1972, from Mr Furze to Mr McCann confirms the
existence of a trust, established on 31 March 1972, of which John Furze is settlor and
GMCT is trustee. It states that Mr McCann is a member of the appointed class, and that
the settlor has requested that the trust funds be held primarily for the benefit of Mr
McCann himself and his wife and family. The settlor has further requested that the trustee
make no distribution without taking the advice of Mr McCann. A second letter, dated 5
January 1973, is addressed to Mr Vincent Walsh of Arthur Cox from Mr Alex Spain. The
letter (which is copied to Mr McCann) refers to three Cayman trusts, called the Red,
White and Blue Trusts, which were established 'early in 1972'. It is clear from the fact
that the letter was copied to Mr McCann that he still had an involvement with the Blue
Trust at that time.

Mr McCann is adamant that, whatever the intended purpose of such a trust, no assets
were ever transferred to it. A letter dated 11 May 2000, from Mr Sean Mooney of
KPMG, supports his assertion. The Inspectors accept Mr McCann's evidence in this
regard. However, it is clear from what has been said above that Mr McCann arranged for
or permitted the establishment of the Blue trust. It was so established on his behalf by
GMCT, and the Inspectors are satisfied that this constituted the carrying out of business
for him by GMCT.
Mr McCann was a client of Ansbacher only to the extent that it carried out business on
his behalf by establishing a trust, to which, however, no assets were ever transferred.

Appendix XV (164) refers.

2. Mr Philip Monahan

Mr Philip Monahan resides at Somerton, Porterstown Road, Castleknock, Dublin 15. He

is a property developer, and is a shareholder in and director of a number of companies.
A letter dated 5 January 1973 from Mr Alex Spain to Mr Vincent Walsh of Arthur Cox,
and copied to Mr Monahan, refers to three Cayman trusts, called the Red, White and Blue
trusts, which were established 'early in 1972'. Mr Spain explains that he is enclosing a
letter from John Furze of GMCT about the trust, of which he, Mr Spain is a potential
beneficiary, and he adds that identical letters have been sent to Mr Monahan and to Mr
Neil McCann. This gives rise to an inference that Mr Monahan must also have been a
potential beneficiary of one of the trusts. As the letter indicates that the Red Trust was
that of which Mr Spain was a potential beneficiary, and as other information in the
Inspectors' possession indicates that the Blue trust was Mr McCann's, the Inspectors
believe that the White trust was that of Mr Monahan. The letter tells the recipient that
any profits arising from two named companies should flow into the trusts

In reply to a letter from the Inspectors enquiring in general terms as to any information
Mr Monahan might have about Ansbacher, his solicitors said that he had 'no details
and/or recollection pertaining to any of the matters' set out in the Inspectors' letter.
However, the Inspectors subsequently furnished Mr Monahan with a copy of the letter of
5 January 1973, and in response, by letter dated 7 November 2001 his solicitors, Noel
Smyth and Partners, stated that Mr Monahan recollected that the Red White and Blue
trusts were set up in respect of a venture which did not proceed, and that he understands
that no money was transferred to them, and that he received no benefits therefrom. The
Inspectors accept this as true. However, it is clear from what has been said at paragraph 2
above that Mr Monahan arranged for or permitted the establishment of the White trust. It
was so established on his behalf by GMCT, and the Inspectors are satisfied that this
constituted the carrying out of business for him by GMCT.

Appendix XV (165) refers.

3. Mr Alex Spain
Mr Alex Spain, of 46 Upper Mount Street, Dublin, is a former partner in KPMG.

A letter dated 5 January 1973 from Mr Spain to Mr Vincent Walsh of Arthur Cox refers
to three Cayman trusts, called the Red, White and Blue trusts, which were established
'early in 1972'. Mr Spain explains in the letter that he is enclosing a letter from John
Furze of GMCT about the trust, of which he, Mr Spain, is a potential beneficiary. The
letter tells the recipient that any profits arising from two named companies should flow
into the trusts. In a letter to the Inspectors, Mr Spain said that the Red trust was set up in
connection with his interest in a property development, but that it was never activated and
that no assets flowed into it at any time. It is clear from the foregoing that Mr Spain
arranged for the establishment of the Red trust. It was so established on his behalf by
GMCT, and the Inspectors are satisfied that this constituted the carrying out of business
for him by GMCT.

Appendix XV (166) refers.

23.10 Category E: List of persons for whom Ansbacher conducted business other
than the holding of funds

This category comprises three sub-categories as follows:

23.11 Category E(i): List of persons to whom Ansbacher provided a service or
loans in the ordinary course of business

1. Mr Vincent Ferguson
2. Mr James McCarthy
3. Celtic Helicopters
4. Colm McLoughlin

23.12 Description of Category E(i) clients

1. Mr Vincent Ferguson
Mr Vincent Ferguson is a former director of Fitzwilton plc and Atlantic Resources
Limited. Through Mr Desmond Traynor, he obtained a number of loans from Ansbacher.

Appendix XV (167) refers.

2. Mr James McCarthy
Mr James McCarthy is a former Chief Executive of Dockrell's and former member of the
Board of Fitzwilton plc, Independent Newspapers and Atlantic Resources plc. Around
1997 he became an executive director of Arcon Limited, which was a subsidiary of
Atlantic Resources. He has now retired from business. Evidence shows that cheques
drawn by Mr McCarthy were lodged to an account in the name of Kentford Securities
Limited (see paragraph 3 below). This company, which had an account in Bank of
Ireland, was widely used by Mr Desmond Traynor for the purpose of making lodgments
to and withdrawals from Ansbacher accounts in Guinness and Mahon and IIB.

Mr McCarthy, who gave evidence on oath to the Inspectors, categorically denied that he
had any dealings with Ansbacher other than that about to be outlined. In 1983-84, Mr
McCarthy and two other persons who were shareholders in and board members of
Atlantic Resources plc, wished to obtain finance for the purchase of shares in that
company. They approached Mr Traynor, who agreed to arrange the matter. At first Mr
McCarthy assumed that the finance would be provided by Guinness and Mahon, but in
fact Mr Traynor arranged that it should be provided by GMCT. He set up a structure
whereby the loan would be granted to a GMCT nominee company, Medford Investments
Limited, which company would also purchase the shares.

In 1986, GMCT provided Mr McCarthy with a similar service in respect of the purchase
of shares in Fitzwilton plc, and in respect of the purchase of further shares in Atlantic.
Another GMCT Nominee company, Ascot Holdings Limited, was on this occasion the
entity to which the loan was granted, and which purchased the shares. Mr McCarthy
explains the payments into Kentford by stating that they were cheques he gave Mr
Traynor as repayments of his loans from the Company. Some of these cheques were
made out to 'Cash'. He explains this by stating that those cheques were given to Mr
Traynor after Mr Traynor's departure from Guinness and Mahon, and that Mr Traynor
probably told him to make the cheques payable to cash. The Inspectors accept Mr
McCarthy's explanation, and are satisfied that it was Mr Traynor himself, not Mr
McCarthy, who lodged the cheques in Kentford Securities' account, and that he did so in
order to transfer the payments to Ansbacher.

Appendix XV (168) refers.

3. Celtic Helicopters Limited

Celtic Helicopters Limited is a Dublin company that provides helicopter services. Its
directors are Mr Ciaran Haughey and Mr John Terrance Barnicle.

In 1991, Celtic Helicopters obtained a loan from IIB secured upon a cash deposit placed
with IIB by Ansbacher. In 1992, IIB provided Celtic Helicopters with a guarantee for a
loan from Bank of Ireland. IIB's guarantee was secured by a further guarantee and cash
deposit from Ansbacher. In 1993, IIB provided Celtic Helicopters with a guarantee in
respect of a lease contract with Jet Aviation. On this occasion, IIB's guarantee was
secured by a guarantee and cash deposit from Hamilton Ross.

In 1992, funds debited to an Ansbacher account in IIB were lodged to an account in the
name of Celtic Helicopters in Bank of Ireland, and used to repay its loan from IIB.

There is no evidence whatsoever to suggest that Celtic Helicopters was the beneficial
owner of the Ansbacher or Hamilton Ross funds used to back the loans described above,
or of any funds on deposit with either Ansbacher or Hamilton Ross. On the contrary, the
evidence given on behalf of the company is that it never had funds on deposit with
Ansbacher, and indeed that the directors were unaware of the existence of the cash-
backed security. However, it is clear that Ansbacher carried out business for Celtic
Helicopters by providing the services described above, from which Celtic Helicopters
clearly benefited, and to that extent, Celtic Helicopters was a client.

Appendix XV (11) refers.

4. Mr Colm McLoughlin

Mr Colm McLoughlin is a resident of Dubai, United Arab Emirates, and was so resident
at all relevant times. Mr McLoughlin's business affairs in Ireland were handled, in the
present context, by his brother, Mr Ray McLoughlin.
In the early 1980s, a company called Selima Investments Limited, with an address 'c/o
Guinness Mahon Cayman Trust' borrowed money from Guinness and Mahon. Its loan
account number was 07318006. Security for the loan included shares in James Crean
Limited. On 11 September 1984, the name on loan account number 07318006 was
changed to Montoire Limited (a Channel Islands company) and Selima Investments
Limited was so advised on 17 September. The name 'Montoire' had already appeared on
documents relating to the Selima loan, on one occasion appearing in brackets after the
name 'Selima'. As Selima Investments was a GMCT company, it was necessary for the
Inspectors to identify its beneficial owner, as that person was clearly a client of
Ansbacher

On 1 October 1984, an internal Guinness and Mahon memorandum notes that it had been
agreed that Mr Ray McLoughlin would guarantee the aforementioned loan, but that he
had indicated that he wished to give the matter further consideration, as there was a
'distinct possibility he might repay the loan in the near future.' A further memo of the 18
October and a file note of 14 December note that Mr McLoughlin still had not provided
the guarantee. A memo of 26 March 1985 notes that the name of the account had again
been changed, this time to a company called Dewdrop Investments Limited, another
Channel Islands company. Security for the loan continued to include, inter alia, the
shares in James Crean Limited already mentioned. A copy of a facility letter to Dewdrop
Investments Limited dated 28 May 1985 bears on its face the handwritten annotation
'Switch from Montoire packet' indicating that the Dewdrop loan was in all respects the
same loan previously held by Montoire.

Mr Ray McLoughlin gave evidence on oath to the Inspectors, the gist of which was that
his brother Colm McLoughlin was the principal of Selima Investments Limited.
According to Mr McLoughlin, Colm wished to borrow money from Guinness and Mahon
to purchase shares in James Crean Limited, and Guinness and Mahon furnished him with
a GMCT company, Selima, for this purpose. Mr McLoughlin gave evidence that he was
the principal negotiator with Guinness and Mahon on behalf of his brother Colm, and he
put forward this fact as the explanation for the proposal in the documentation that he
should furnish a guarantee, although he added that he did not recollect being asked for
such a guarantee. Asked about the Guinness and Mahon memo of 1 October 1984, which
refers to the possibility that he will repay the loan, Mr McLoughlin gave evidence that he
did not know what it meant, and suggested that it might be inaccurate. Mr McLoughlin
also stated that in 1985 Colm decided to use a Channel Islands company instead of a
Cayman company, and Dewdrop Investments Limited was provided to him in
consequence. Mr Ray McLoughlin denied that he himself had any interest in Dewdrop
Investments Limited.
On 4 September 1985, Guinness and Mahon sent detailed information on the Dewdrop
loan to Mr Paddy Meagher, an employee of James Crean Limited. Mr Ray McLoughlin
has told the Inspectors that Mr Meagher was an accountant employed in an administrative
capacity by James Crean Limited. He assisted Mr Ray McLoughlin with various matters
from time to time. Asked why Guinness and Mahon would communicate with Mr
Meagher about Dewdrop Limited, Mr McLoughlin said that he would communicate with
Colm about these matters and 'that led to this communication with Paddy Meagher'. Mr
McLoughlin went on to say ' ... on an issue relating to the loan I would have dialogued
with Colm. If that involved talking with the administration people in Guinness Mahon
about a thing like currency, I would have asked Paddy, probably, to help me with that
because I was too busy. That is what, I think, this means, but again, I repeat, I actually do
not recall all that.'

On 14 January 1986, Mr Ray McLoughlin wrote to Guinness and Mahon about arranging
a borrowing for 'his brother'. In an attached memo, he sets out relevant information. This
includes an item stating that 'his brother's' present borrowing amounts to £160,000. This
figure equates roughly to the amount borrowed by Dewdrop Investments Ltd, not being
the original borrowing but an additional borrowing arising out of a rights issue based on
the Crean shares originally purchased. Up to that moment, no reference to Mr Ray
McLoughlin's brother had been made in any of the documentation.

Finally, a Guinness and Mahon file note dated 15 January 1986 and signed 'MCK' (the
initials of Mr Martin Keane) is headed 'Ray McLoughlin ('R. McL')/ James Crean plc
('Crean'). This note begins: 'At the present time our involvement with the above is as
follows':- and it goes on to set out (inter alia) the balance on the Dewdrop loan account.
Mr Ray McLoughlin, when asked about this memo, stated that his name was on it
because of his brother's connection to him.

The Inspectors had some doubts whether the beneficial owner of Selima was Colm
McLoughlin or his brother Ray McLoughlin. Subsequently, Mr Colm McLoughlin
furnished the Inspectors with an affidavit stating that he was the beneficial owner of
Selima, and that the borrowings referred to above were at all times for his benefit. Mr
Maurice O'Kelly and Mr Martin Keane of Guinness and Mahon gave evidence on oath
that they believed Mr Colm McLoughlin to be the beneficial owner of Selima. The
Inspectors accept that evidence.

Appendix XV (79) refers.

23.13 Category E(ii): List of persons provided with an Ansbacher company for the
purpose of purchasing property

1. Ms Barbara Breen

23.14 Description of Category E(ii) clients

1. Ms Barbara Breen
Ms Barbara Breen is the Managing Director of Merops Nutrition and Windsor Nutrition,
and is a director of and shareholder in Windsor Foods Ltd and Windsor Nutrition Ltd.
These companies were all owned by the late Mr Thomas McLaughlin, a close friend of
Ms Breen. In the 1980s, Ms Breen used a Cayman Island company, Coral Reef Securities
Limited ('Coral Reef'), to buy a property in Portugal. Fees in respect of this company
were invoiced by Ansbacher, under its earlier names of Cayman International Bank and
Trust Company Limited and Ansbacher Limited.

In the early 1980s, Mr McLaughlin gave funds to Mr Desmond Traynor to place on

deposit. Mr Traynor deposited them with Ansbacher. Ms Breen understood that these
funds were to be placed at her disposal in the event of Mr McLaughlin's death. She
withdrew money from the funds from time to time but only with the consent of Mr
McLaughlin whom she considered to be the real owner of the funds. In or about 1998,
Mr McLaughlin repatriated the money and lodged it to an account in his own name in an
Irish bank. The Inspectors are satisfied that Ms Breen was not the beneficial owner of the
funds placed on deposit with Ansbacher by Mr Thomas McLaughlin.

Ms Barbara Breen was a client of Ansbacher only to the extent that Ansbacher managed
Coral Reef Securities Limited, a company that purchased and held a property on her
behalf.

Appendix XV (169) refers.

23.15 Category E(iii): List of persons who owned Ansbacher-managed companies

which were potential beneficiaries of the Lynbrette Trust

1. Mr Francis Boland

2. Mr Patrick J Dineen

23.16 Description of Category E(iii) clients

1. Mr Francis Boland
Mr Francis Boland is currently chairman of the Port of Cork Company Ltd.
Evidence supplied by Guinness and Mahon showed that on 19 November 1980, Barclay's
Bank International in Manchester transferred $50,000 to an account in the name of
Guinness Mahon & Co (the London company) in Bankers Trust Company, New York,
for further transmission to a GMCT seven-day deposit account. Guinness and Mahon
says that Mr Boland requested this transfer.
Mr Boland gave evidence that he formed part of a consortium to carry out a development
near Phoenix, Arizona, USA. Upon the advice of Mr Desmond Traynor, a scheme was
constructed involving the establishment of a discretionary trust, the Lynbrette Trust, of
which GMCT was the Trustee. The Trust had as beneficiaries five Cayman companies,
representing the interests of the five Irish participants. Mr Boland told the Inspectors that
Medford Investments Limited was the name of the company that represented his interest
in the Trust. Mr Boland was unable to recollect the transaction referred to above, but he
explained that his personal contribution towards the development amounted to $212,000,
which he paid in three or four tranches and he presumes that the transaction in question
must have been the payment of the first tranche. The Inspectors accept that this is the
most likely explanation, given a similar transaction on the part of another participant in
the development at the same time. The development was unsuccessful and all
participants lost their investments.

Mr Boland was a client of Ansbacher to the extent only that he was the beneficial owner
of a company (Medford Investments), which was a potential beneficiary of a trust of
which Ansbacher was trustee.

Appendix XV (170) refers.

2. Mr Patrick J Dineen

Mr Patrick Dineen, of Temple Lawn House, Blackrock Road, Cork, is a businessman and
company director. He has been a professional non-executive director who has served on
the boards of many well-known Irish companies.
In May 1981, Mr Dineen, together with seven others, formed a consortium to develop a
property in the US. The consortium caused a discretionary trust, the Lynbrette Trust, to
be established, of which GMCT was the trustee. The trust had as beneficiaries five
Cayman companies, representing the interests of the five Irish members of the
consortium. Mr Dineen was uncertain as to the name of the company representing his
interest, but information available to the Inspectors suggests it was Overseas Nominees
Ltd.

Mr Dineen invested monies in the Lynbrette Trust, which also borrowed funds from AIB
in New York. The development was unsuccessful and failed financially and the Irish
members of the consortium had their guarantees called by AIB.

The Inspectors conclude that Mr Patrick Dineen was a client of Ansbacher to the extent
only that he was beneficially entitled to the interest held by Overseas Nominees in the
Lynbrette Trust.

Appendix XV (171) refers.

 PART VI

RELATED MATTERS
Introduction to Part VI
The High Court Order of 22 September 1999 directed the Inspectors at paragraph (e) to
'report on any related matter'. The Inspectors do so in this section of the report. They
have deemed that there are four such related matters: (a) the operation and wrongdoing of
the Cayman Islands company known as Hamilton Ross Company Limited, (b) the role of
the Central Bank, (c) the matter of exchange control and (d) the role of the auditors of
Guinness and Mahon during the period when Ansbacher held accounts with that bank. In
this chapter also, the Inspectors name those persons who, in one way or another, failed to
co-operate with their enquiry, and make a recommendation to the High Court in that
regard.
 HAMILTON ROSS COMPANY LIMITED (1992 TO EARLY 1997)

INDEX

Page
24.1 Introduction 436

24.2 Hamilton Ross's opposition to the Inspectors investigations 436

24.3 Ownership and control of Hamilton Ross 437

24.4 Mr Traynor as beneficial owner from 1992 437

24.5 The involvement of Hamilton Ross in Ansbacher's Irish business 438

24.6 Removal of Hamilton Ross from the books of Ansbacher 438

24.7 Hamilton Ross opens accounts in IIB 439

24.8 Ansbacher notepaper used for Hamilton Ross business 440

24.9 Ansbacher clients become clients of Hamilton Ross 440

24.10 Hamilton Ross statements printed on Ansbacher paper until 1993 440

24.11 Hamilton Ross uses Ansbacher's Cayman address 440

 Page
24.12 Hamilton Ross operation identical to that of Ansbacher 441

24.13 Lodgements 441

24.14 Withdrawals 441

24.15 Hamilton Ross at 8-10 Inns Court 442

24.16 Responsibility of individuals 442

24.17 Wrongdoing of Hamilton Ross (1992 to early 1997) 443

24.18 Conducting its affairs with intent to defraud a creditor of some of its

clients 444

24.19 General criminal offences. 444

24.20 Breaches of the Companies Acts 445

24.21 Unlicensed banking 446

24.22 Breaches of the taxation code by Hamilton Ross 448

HAMILTON ROSS COMPANY LIMITED

24.1 Introduction
Hamilton Ross Company Limited ('Hamilton Ross'), as shown earlier, was originally a
company used by Ansbacher to hold the funds of some of Ansbacher's Irish clients. The
Inspectors consider its operation and wrongdoing to be a 'related matter' within the terms
of the High Court Order for a number of reasons. Firstly, there is evidence tending to
show that when Ansbacher's London management insisted upon the removal of Hamilton
Ross from the books of Ansbacher, Hamilton Ross set up business in Ireland as a bank,
operating without the licence required by the Central Bank. In that capacity, it held funds
belonging to a number of former clients of Ansbacher. Secondly, the signatories on the
Hamilton Ross accounts were Mr Furze (who was stated to be a director) and three
authorised signatories: Mr Traynor, Mr Collery and Ms Williams. Of these four people,
Mr Traynor was the chairman of Ansbacher, Mr Furze was an executive director of
Ansbacher, Mr Collery controlled the memorandum accounts and Ms Williams was Mr
Traynor's secretary (although of course not by any means exclusively in relation to his
Ansbacher work). Thirdly, instructions in relation to the Hamilton Ross accounts in IIB
were initially issued on Ansbacher headed paper. Even when that practice changed, the
notepaper used was identical with the Ansbacher notepaper in every respect except the
name of the company. The Cayman postal address was that of Ansbacher. The
telephone, telex and fax numbers were Ansbacher's.

24.2 Hamilton Ross's opposition to the Inspectors investigations

The Inspectors, pursuant to their duty to report on the affairs of Ansbacher and identify
its clients, sought the assistance of Ansbacher itself. In due course, that company made
an application to The Grand Court of the Cayman Islands seeking permission to disclose
certain limited information to the Inspectors. Hamilton Ross as a notice party opposed
this application and an affidavit was filed as to the nature of their objections (see
Appendix XVI(a)). From these documents, it is clear that Hamilton Ross felt unable to
co-operate with the Inspectors. In common with other affected parties, Hamilton Ross
was notified of the essential elements of the Inspectors' conclusions and made
representations arising therefrom, which have been taken into account by the Inspectors.

24.3 Ownership and control of Hamilton Ross

Hamilton Ross, its functions and its appearance on the Irish scene are described in
Chapter 2. Dramatic changes took place in mid September 1992 as a result of executive
action by Henry Ansbacher in London. The details of these events are related elsewhere
in this report, but, as a result, control of Hamilton Ross left Ansbacher and rested with Mr
John Furze and/or Mr Desmond Traynor. It is difficult to delimit the role of Mr Furze as
he was a director of Hamilton Ross at all times, originally as a GMCT and Ansbacher
executive, later as principal or agent of Mr Desmond Traynor. After Mr Traynor's death,
Mr Furze acquired Hamilton Ross, possibly as beneficial owner. Of particular
importance to the Inspectors is the ownership between September 1992 and Mr Traynor's
death on 11 May 1994. September 1992 is significant as at that time certain Ansbacher
accounts in IIB were closed and the funds (bearing the same codes) were transferred to
new accounts opened in the name of Hamilton Ross. The documents opening Hamilton
Ross accounts in IIB in September 1992 describe Mr Furze as a director, with Mr
Traynor, Mr Padraig Collery and Ms Joan Williams as authorised signatories. This
would suggest that Mr Furze was the new beneficial owner but the question arises as to
whether he was acting on his own behalf or as an agent of another.

24.4 Mr Traynor as beneficial owner from 1992

Events which occurred on 5 May 1993 answered this question. Through the agency of
Mr John Furze, a trust known as the Poinciana Trust was established with Mr Desmond
Traynor as the moving party. The third member of the group that ran GMCT/Ansbacher
for over 20 years, Mr John Collins, is named as the Protector in the deed. The
beneficiaries are stated to be Mr Desmond Traynor and his wife in the first place and his
wider family secondly. The trust deed contains a schedule setting out the assets of the
trust. These include the issued shares and other capital of four companies, Poinciana
Fund Limited, Hamilton Ross Limited, Worldwide Management and Consultancy
Services Limited and Dumas Holdings Limited (see Appendix XVI(b)).

The conclusion is clear - Mr Traynor was the beneficial owner of Hamilton Ross from the
time of the de-merger of the Ansbacher accounts in 1992 to his death. Following Mr
Traynor's death, Mr Furze disposed of Hamilton Ross in his capacity as trustee of
Poinciana Trust. This information is contained in a letter dated 22 June 2001 from Barry
B Benjamin (the new trustee of the Poinciana Trust) to Mr Tony Traynor, son of Mr
Desmond Traynor. (see Appendix XVI(c)). The date of the disposal and the price paid
(if any) are unknown. The Traynor family have assured the Inspectors that they do not
have this information. If the lack of knowledge of the Traynor family is genuine (a fact
not disputed by the Inspectors), the secret nature of this transaction is a lesson to those
who entrust their wealth to offshore trusts.

24.5 The involvement of Hamilton Ross in Ansbacher's Irish business

Hamilton Ross's involvement in Ansbacher's Irish business began in 1988, when it
appeared on the books of Ansbacher as the company holding the funds in Cayman of
some of the smaller Irish sterling depositors. Up to September 1992, the use made of
Hamilton Ross was no different to that made of other Cayman companies within the
Ansbacher scheme, apart from the fact that the Hamilton Ross system was an
amalgamation of many individuals' investments. Ansbacher, through Hamilton Ross,
was providing offshore banking for the small investor through the ingenuity of Mr
Traynor and Mr Furze. Within Ireland, Hamilton Ross had thus far done no wrong.

24.6 Removal of Hamilton Ross from the books of Ansbacher

However, the use made of Hamilton Ross, both within and outside Ireland, changed
dramatically towards the end of 1992. The background and details of the change at that
time is set out elsewhere in this report. A brief summary will suffice here so as to put
the part played by Hamilton Ross into context.
On 16 September 1992, two senior employees of Henry Ansbacher, Messrs Jennings and
McAuliffe, sent a fax to Mr Richard Fenhalls, the chief executive of Henry Ansbacher,
from Cayman where they had been seconded in circumstances outlined in Chapter 12.
They had discovered the use that was being made of Hamilton Ross in Cayman, and were
seriously alarmed. According to the fax, they feared that it could lay Ansbacher open to
charges of:

• 'Carrying out a deposit taking activity in Eire without a licence.

• Trading within Eire without declaring this to the Revenue.
• Possible breach of Eire Exchange Control
• Assisting Eire residents to avoid Eire tax.
• Failure to comply with the Money laundering regulations.
• Possible risk of error on money transfer between the clients and AL
[Ansbacher Limited].
• Risks associated with the absence of dual controls' (see Appendix XVI(d)).

Mr Fenhalls took action to bring this dangerous situation to an end. He issued

instructions that all Hamilton Ross accounts were to be removed from the books of
Ansbacher by 30 September 1992.

24.7 Hamilton Ross opens accounts in IIB

Back in Ireland, Mr Traynor responded to the new situation by taking steps to ensure that
some of the memorandum accounts and other business considered to be of a similar type
were taken off the books of Ansbacher in Ireland. He gave instructions to IIB to close
certain accounts that had been held in the name of Ansbacher, and to transfer the funds to
new accounts which were opened in the name of Hamilton Ross. This was the first
appearance of that company on the Irish scene. The accounts were opened on foot of a
resolution of the board of Hamilton Ross and were non-resident accounts. Only part of
the main pooled account was transferred. The signatories on the Hamilton Ross accounts
were to be Mr Furze (who was stated to be a director) and three authorised signatories
Mr Traynor, Mr Collery and Ms Williams. These are exhibited in Appendix XVI(d).
24.8 Ansbacher notepaper used for Hamilton Ross business
Instructions to IIB were issued on Ansbacher notepaper bearing an Irish address for
correspondence. Examples of the type of instructions issued appear in Appendix XVI(e).
Ansbacher notepaper continued to be used to give instructions to Irish banks on the new
Hamilton Ross accounts after September 1992. In general, Hamilton Ross notepaper was
used after mid November. A later letter on Ansbacher notepaper dated 3 December 1992
is exhibited in Appendix XVI(f), but this was the exception rather than the rule and may
have been a clerical error.

24.9 Ansbacher clients become clients of Hamilton Ross

The cumulative effect of the removal of Hamilton Ross from the Cayman books, the
opening of the Hamilton Ross accounts in IIB, and the transfer to them of Ansbacher
funds was that those clients whose funds which had been held in a pooled account in
Ansbacher's name in IIB, and in a pooled account in the name of Hamilton Ross on the
books of Ansbacher in Cayman, now ceased to be held in any Ansbacher account either
in Ireland or in Cayman. Instead, they were held on the clients' behalf in IIB in an
account in the name of Hamilton Ross. Thus, those persons who had hitherto been
clients of Ansbacher became clients of Hamilton Ross.

24.10 Hamilton Ross statements printed on Ansbacher paper until 1993

Statements of the Hamilton Ross memorandum accounts continued to be printed on
Ansbacher headed paper until January 1993, but Mr Collery has explained to the
Inspectors that this was simply because he was using up available stationery until new
stationery was printed. Mr Collery is clear on one vital point, namely, that from 30
September 1992, these statements were no longer sent for reconciliation to Ansbacher;
instead, they were sent to Hamilton Ross at its Cayman address.

24.11 Hamilton Ross uses Ansbacher's Cayman address

On 19 November 1992, new stationary made its debut in 42 Fitzwilliam Square. In
addition to the previous Ansbacher paper, Hamilton Ross paper was made available,
which would be used for Hamilton Ross business from that time on. The paper itself is
interesting, as it fundamentally contradicts the assertion of Henry Ansbacher's
management that, after September 1992, Ansbacher no longer managed Hamilton Ross.
The notepaper is identical with the Ansbacher notepaper except for the name. The
Cayman postal address is that of Ansbacher. The telephone, telex and fax numbers are
Ansbacher's. The way in which the Irish address at 42 Fitzwilliam Square is
superimposed is identical. Hamilton Ross continued to use this notepaper, unchanged,
until at least December 1994. Examples of this notepaper are exhibited at Appendix
XVI(g).

24.12 Hamilton Ross operation identical to that of Ansbacher

After the transfer of some of the Ansbacher funds to Hamilton Ross, no change in the
range, scope or intensity of the operation is obvious. Letters continued to be issued
under the names of one of the three Irish authorised signatories. Ms Williams signed
most of the letters, but from her evidence and the references contained therein it is clear
that Mr Traynor continued to manage the operation. The system, as operated for
Hamilton Ross clients, involved a cash lodgement and withdrawal system in Ireland in
respect of money notionally held by these persons in Grand Cayman.

24.13 Lodgements
Hamilton Ross accepted lodgements in Ireland for and on behalf of Irish residents.
Lodgements when they were made were rarely sent directly from Hamilton Ross to IIB
but were transferred through an Amiens type account and a sterling account in Scotland.
This was necessary as the memorandum accounts were denominated in sterling at all
times. Lodgements were directly made, however, on some occasions. One such example
can be found at Appendix XVI(h).

24.14 Withdrawals
There are many examples in the records made available to the Inspectors of withdrawals
by Hamilton Ross of the type previously done in the name of Ansbacher: see letter 4
January 1993 seeking IR£20,000 for B.E.L. Secretarial Services, letter dated 18 February
1993 seeking IR£50 payable to Kentford Securities Ltd and letter 15 March 1993 seeking
a cheque for IR£10,000 payable to Bank of Ireland. Copies of these documents are
exhibited at Appendix XVI(i). Kentford Securities Ltd account in the Bank of Ireland
continued to be used as a cash facility for withdrawals as IIB did not have a cash service.

24.15 Hamilton Ross at 8-10 Inns Court

After the death of Mr Traynor in May 1994, Hamilton Ross continued to operate from 42
Fitzwilliam Square. It later moved to 8-10 Inns Court Winetavern Street Dublin 8, the
premises of Mr Sam Field-Corbett, a long-time associate of Mr Traynor. The transfer
was organised by Mr Padraig Collery who recognised that the Hamilton Ross business
could not be run indefinitely from CRH offices after Mr Traynor's demise. The transfer
took place in and about November 1994 even though Hamilton Ross letters were still
issuing from 42 Fitzwilliam Square up to December 1994. Once the transfer had taken
place, the day-to-day work appears to have been done by Mr Field-Corbett.

It is outside the scope of this section of the report to consider in detail the roles played by
Ms Williams, Mr Collery and/or Mr Field Corbett at the various dates relating to
Hamilton Ross. These matters are considered under the appropriate section dealing with
the role of each of these persons.

24.16 Responsibility of individuals

During the lifetime of Mr Traynor, all executive decisions were taken by him or under his
authority. Mr Traynor controlled all aspects of Hamilton Ross's Irish operation. As a
result Mr Traynor, if alive, would have to accept responsibility for any breach by
Hamilton Ross of its duties under Irish law.

Ms Joan Williams and Mr Padraig Collery assisted Mr Traynor but had no overall
executive responsibility for the business up to the date of his death. It is obvious from the
correspondence that Mr Collery had greater authority than Ms Williams at this stage.
After the death of Mr Traynor, the executive functions previously exercised by him were
divided between Mr John Furze and Mr Padraig Collery. In playing a major role in the
continuation of the business, Mr Collery must share with Mr Furze responsibility for any
breach by the Company of its legal duties in this jurisdiction for periods after the death of
Mr Traynor.

Mr Field-Corbett does not appear to have had executive responsibility for the actions
taken by him. His actions appear to have been taken under the control of Mr Furze and
Mr Collery. Mr Field-Corbett was responsible for assisting the enterprise by the
provision of premises.

24.17 Wrongdoing of Hamilton Ross (1992 to early 1997)

As appears from the Order appointing the Inspectors of 22 September 1999, the
Inspectors are required, inter alia:

'to examine whether the Companies Acts 1963-1990 were breached by the
Company... and if so to identify the provisions involved....' (see sub-paragraph
(c) of the Order) and

'to examine whether the affairs of the Company were conducted with intent to
defraud its creditors or the creditors of any other person or otherwise for
fraudulent or unlawful purpose and if so to identify the statutory provisions
involved ' (see sub-paragraph (d) of the Order).

The Inspectors have formed the view that they should apply the Order of the High Court,
mutatis mutandi, to the related matter of Hamilton Ross.

The Inspectors therefore considered it relevant to consider whether, during the period in
which it carried on business in Ireland (i.e., between 1992 and early 1997) the affairs of
Hamilton Ross were conducted with intent to defraud creditors of some of its clients,
whether Hamilton Ross was guilty of carrying on an unlicensed banking business,
whether Hamilton Ross was in breach of Part XI of the Companies Act, 1963 and
whether Hamilton Ross can be said to have breached the taxation acts. The Inspectors
are satisfied that the present management of Hamilton Ross was not in situ during the
relevant time.

24.18 Conducting its affairs with intent to defraud a creditor of some of its clients
As has been set out in previous chapters of this Report, the Inspectors are satisfied that
there is evidence tending to show that, in the course of conducting its Irish business,
Ansbacher provided a range of services to clients which was calculated to facilitate those
clients in the evasion of their taxation liabilities. This conclusion also applies to
Hamilton Ross, which took over part of the Ansbacher Irish business in 1992. The
Inspectors are satisfied that the clients of Hamilton Ross availed of Hamilton Ross's
services for that purpose and did so with the knowledge of Hamilton Ross. So far
therefore as sub-paragraph (d) of the Order is concerned the Inspectors are satisfied
therefore that there is evidence tending to show that the affairs of Hamilton Ross were
conducted with intent to defraud creditors (namely the Revenue Commissioners) of some
of its clients.

24.19 General criminal offences.

The above conclusion leads the Inspectors to conclude further that there is evidence
tending to show that Hamilton Ross may have been guilty of a number of criminal
offences including:

(a) The common law offence of conspiracy to defraud which is an offence punishable
by a fine or imprisonment; and

(b) The offence of knowingly aiding, abetting, assisting, inciting or inducing another
person to make or deliver, knowingly or wilfully, any incorrect return, statements
or accounts in connection with their tax contrary to the provisions of the
appropriate tax legislation now consolidated in Sections 1056 and 1078(2) of the
Taxes Consolidation Act, 1997.
24.20 Breaches of the Companies Acts
The Inspectors have considered also whether Hamilton Ross breached any of the
provisions of the Companies Acts, 1963-1990. In this context, it is important to bear in
mind that Hamilton Ross is a company incorporated outside the State and relatively few
of the provisions of the Companies Acts therefore apply to it. However, Part XI of the
Companies Act, 1963 applies specifically to companies incorporated outside the State
which have an established place of business within the State. The Inspectors have
concluded that Hamilton Ross had established places of business within the State at 42
Fitzwilliam Square and Inns Court Winetavern Street and accordingly, Part XI of the
Companies Act, 1963 applies to Hamilton Ross.

The purpose of the provisions contained in Part XI of the Act of 1963 is to ensure that
some basic information is available in Ireland in relation to companies incorporated
outside the State but doing business in Ireland. Thus, Section 352 requires such
companies, within one month of the establishment of a place of business within the State
to deliver to the Registrar of Companies certain basic information including:

(a) A certified copy of its constitutional documents (e.g. the Memorandum and
Articles of Association) and, if applicable, a certified translation thereof;

(b) Particulars of its directors and secretary;

(c) The names and addresses of persons resident in the State who are authorised to
accept service of process notices and the like on behalf of the Company;

(d) The address of the Company's principal place of business in the State;

(e) Any changes in all or any of the aforementioned documents and particulars.
By Section 353 the Company is obliged, if there is any alteration in any of the foregoing,
to deliver a return to the Registrar of Companies containing the prescribed particulars of
the alteration.

Pursuant to Section 355 Hamilton Ross was obliged to exhibit conspicuously on every
place where it carried on business in the State the name of the company and the country
in which it is incorporated.

By Section 357 of the Act, Hamilton Ross, if it ceased to do business in the State (which
it did in or about 1997) was obliged to forthwith give notice of the fact to the Registrar of
Companies.

It was of the essence of Hamilton Ross's Irish business that it be conducted in secret.
The Inspectors have detailed elsewhere the lengths, which Mr Traynor went to conceal,
even in statements given to clients, the fact that Ansbacher was doing business in Ireland.
This policy of concealment continued in respect of the Hamilton Ross business. It comes
as no surprise therefore to find that, like Ansbacher, Hamilton Ross breached each and
every one of the provisions referred to above. By Section 358 of the Act of 1963, it is
provided that if any company fails to comply with any of the provisions of Part XI of the
Act the company and every officer or agent of the company who knowingly and wilfully
authorises or permits the default is liable to a fine not exceeding £500. The Inspectors
are satisfied, both on the balance of probabilities and beyond reasonable doubt, that
Hamilton Ross has failed to comply with each of the foregoing provisions.

24.21 Unlicensed banking

The business of banking in Ireland is regulated, inter alia, by the provisions of the Central
Bank Act, 1971 (as amended) and the Central Bank Act, 1989. The relevant provisions of
these Acts have been set out in Chapter 5.
The Inspectors are satisfied that Hamilton Ross carried on business in Ireland, and that
there is evidence tending to show that that business was banking business within the
meaning of the Central Bank Acts, 1971 and 1989. In particular:

(a) Irish clients were enabled to lodge and withdraw money in Ireland albeit that
their funds were in Hamilton Ross. These transactions were carried out
principally on or from the premises of CRH. Occasionally, Mr Traynor
would meet people by arrangement to conduct their transactions, or money
would be delivered to their homes by Mr Traynor's driver or by the CRH
porter. This is described in greater detail elsewhere in this report. A number
of persons have given evidence to the Inspectors that they made lodgements
on the premises of CRH. These transactions were an intermingling of
Ansbacher and Hamilton Ross business. Later the location changed to
Winetavern Street.

(b) Transactions in relation to Hamilton Ross funds of Irish clients were entered
on a computer in CRH weeks before similar entries were made in Cayman.

(c) From November 1992, letters emanating from 42 Fitzwilliam Square were on
headed paper bearing the name of Hamilton Ross and requesting that, where
appropriate, replies be directed to 42 Fitzwilliam Square and later to Inns
Court, Winetavern Street. By these communications, Hamilton Ross held
itself out as being engaged in the business of banking at these addresses.

Hamilton Ross did not have the licence required by Section 7 of the Central Bank
Act,1971 (as amended) to carry on the business of banking in Ireland. Indeed, it did not
even apply for such a licence. (see letter from the Central Bank at Appendix XVI(j)).
The Inspectors are, therefore, satisfied that Hamilton Ross carried on an unlicensed
banking business, and that there is therefore evidence tending to show the commission of
a criminal offence.
24.22 Breaches of the taxation code by Hamilton Ross
A detailed treatment of the taxation legislation pertinent to an analysis of Ansbacher's
wrongdoing is presented in Chapter 5. The Inspectors have based their analysis of the
failure of Hamilton Ross to comply with taxation laws on the same detail. The Inspectors
conclude that there is evidence tending to show that Hamilton Ross may have:

1. Breached Section 141 of the Corporation Tax Act, 1976 by failing to notify the
Revenue Commissioners of the commencement of business within the State as
required.

2. Breached Section 142 of the Corporation Tax Act, 1976 by failing to deliver to
the Revenue Commissioners a Notice of Liability to Corporation Tax.

3. Failed to pay Corporation Tax lawfully due.

4. Breached Section 31 of the Finance Act, 1974 in respect of its obligations to

deduct tax from interest paid.

5. Failed to make deductions from payments to employees contrary to Section 126

of the Income Tax Act, 1967 (now Section 985 of the Taxes Consolidation Act
1997) and corresponding Social Welfare legislation.
 CHAPTER 25

THE ROLE OF THE CENTRAL BANK

INDEX

Page
25.1 Introduction 450

25.2 The nature and practice of Central Bank regulation 451

25.3 Bank required to have regard to qualitative factors 452

25.4 The 1976 inspection of Guinness and Mahon and subsequent events 453

25.5 The 1978 inspection and related events 457

25.6 The 1982 inspection and subsequent events 464

25.7 The 1986 inspection and subsequent events 467

25.8 The 1988 inspection and subsequent events 469

25.9 The current view of the Central Bank in relation to the activities of
Ansbacher 470

25.10 Conclusions on the role of the Central Bank 471

THE ROLE OF THE CENTRAL BANK

25.1 Introduction
When assessing the role of the Central Bank (hereinafter referred to as 'the Bank') in the
affairs of Ansbacher, it is important to bear in mind that the Inspectors are investigating
Ansbacher and not the Bank. Furthermore, Ansbacher at no time came directly under the
supervisory jurisdiction of the Bank but came to the attention of the Bank only as a
subsidiary of Guinness and Mahon. Likewise, the Inspectors are not investigating
Guinness and Mahon though, as appears from what has already been set out in this report,
Guinness and Mahon does feature centrally in the affairs of Ansbacher. These
considerations notwithstanding, the Inspectors are conscious that, on foot of the High
Court Order of 22 September 1999, they are charged, in their investigation of the affairs
of Ansbacher, to report upon any related matters. As appears from what is set out
hereunder, certain aspects of Ansbacher's business in Ireland came to the attention of the
Bank and it is for this reason that the Inspectors see fit to refer to the role of the Bank.

It is also important, when assessing the role of the Bank in the affairs of Ansbacher, to
bear in mind what was regulatory practice at the time of the events in issue and to be
careful not to form any conclusion based upon later concepts of regulatory practice.
Furthermore, the Inspectors are cognisant of the fact that only certain aspects of
Ansbacher's business came to the attention of the Bank and that other aspects of its
business, including the system of maintaining memorandum accounts recording the
interests of Irish residents in deposits held by Guinness Mahon Cayman Trust/Ansbacher,
were concealed from the Bank.
25.2 The nature and practice of Central Bank regulation
The Bank is statutorily responsible for the supervision of most financial institutions in
Ireland, including banks. The Bank's supervisory powers were first established in
relation to banking supervision in the Central Bank Act 1971. Since then the Bank's
supervisory remit has been extended considerably, though for the most part, those
extensions have no relevance to the work of the Inspectors.

The Bank's regulation of banking is concerned principally with protecting against what is
known as systemic risk and prudential risk. Systemic risk is the risk associated with the
collapse of a bank, which may in turn prompt the collapse of other banks or related
financial institutions. Prudential risk is the risk associated with depositors and investors,
persons who are not usually in a position to judge the safety and soundness of a particular
financial institution. The Bank's regulation therefore has two objectives: firstly, to
manage systemic risk thereby seeking to ensure that the financial system as a whole is
secure and, secondly, to reduce the risk of an individual institution failing, with the
consequent loss to depositors and investors.

The Bank is not principally concerned with Revenue matters and indeed, subject to
certain exceptions which are not here relevant, the duty of confidentiality imposed upon
the Bank and its staff is such that it may not disclose information about individual
persons or entities to third parties including the Revenue Commissioners. This is another
important point to bear in mind when assessing the role of the Central Bank in the affairs
of Ansbacher.

The Central Bank Act, 1971 vested in the Bank the power to grant bank licences. The
Act also provided, for the first time, for on-site inspection of banks. The system which
initially evolved from the 1971 Act was, in common with other countries, one which set
out to achieve regulatory objectives by imposing general 'one size fits all' ratios on
banks. These traditional ratios sought to identify certain key risks such as credit risk,
lack of diversification and lending to connected institutions. The practice of regulation
has changed dramatically over the past thirty years but this concentration on ratios is a
feature of the Bank's supervision of Guinness and Mahon in the late 1970s and for much
of the 1980s. That said, there has always been both a quantitative and a qualitative aspect
to the Bank's supervisory technique. Thus, pursuant to Section 9 of the Central Bank Act
1971 the Bank is empowered to refuse to grant a banking licence in circumstances where
it is satisfied that a grant would not be in the interests of the orderly and proper regulation
of banking. Furthermore, pursuant to Section 10 the Bank may grant a banking licence
subject to conditions which, in the opinion of the Bank, are calculated to promote the
orderly and proper regulation of banking. Those conditions may be amended, revoked or
added to from time to time by the Bank if it is of the opinion that such action is calculated
to promote the orderly and proper regulation of banking. Pursuant to Section 11 of the
1971 Act, the Bank may, with the consent of the Minister for Finance, revoke a bank
licence if the circumstances relevant to the grant are changed and are such that, if an
application for a licence were made in the changed circumstances, it would be refused.

25.3 Bank required to have regard to qualitative factors

It is apparent therefore that from the very beginning of banking regulation the Bank was
required to have regard to qualitative factors. These factors included the quality of the
management of a bank and the nature of the activities being carried on by a bank. Thus,
whilst it has been emphasised earlier that the Bank is not principally concerned with
Revenue matters, the Bank was and is statutorily obliged to concern itself with the proper
regulation of banking. In this context, any evidence that a bank was facilitating tax
evasion was at all material times a matter of concern for the Bank.

Ongoing supervision of existing entities by the Bank consisted of:

(a) regular collection and analysis of data;
(b) regular reviews with management of the institution;
(c) dealing with specific issues;
(d) on-site inspection.
This is the approach that was adopted in relation to Guinness and Mahon and it is through
this approach that the Bank came into possession of certain information in relation to
particular aspects of Guinness and Mahon's business, including those aspects which
concerned its Cayman subsidiary.

25.4 The 1976 inspection of Guinness and Mahon and subsequent events
Inspections are usually carried out by two bank examiners, one of whom is termed the
Lead Examiner. The Lead Examiner plans the inspection and is the person principally
responsible for writing the examination report. That report is reviewed by a more senior
person in the Bank. The Lead Examiner on the Guinness and Mahon examination in
1976 was Mr Adrian Byrne. Mr Byrne is currently the Head of Banking Supervision in
the Bank. The other examiner was Mr John Rockett and the review person was Mr
Bernard Daly. All three gentlemen were chartered accountants by qualification.

The principal purpose of the 1976 inspection was to consider the Guinness and Mahon
loan book and in particular, the recoverability of the loans. That entailed an examination
of the security for those loans which in turn revealed the back-to-back nature of some of
the deposits with Guinness and Mahon.

As part of their inspection, the bank examiners had regard to the offshore subsidiaries of
Guinness and Mahon, including in particular Guinness Mahon Cayman Trust Limited,
which at that time had deposits of IR£14.3 million with Guinness and Mahon. The clear
impression gained by the bank examiners in relation to these deposits is that they were
part of a scheme which was surrounded by a unique level of secrecy and which appeared
to involve tax evasion. This impression gained by the bank examiners is clear from the
report which they wrote at the time in relation to the inspection and is clear also from the
evidence given by Mr Adrian Byrne to the Inspectors.

Referring to the offshore subsidiaries and in particular Guinness Mahon Cayman Trust
Limited, the bank examiners wrote:
 'We are satisfied from our conversations with Mr J.D. Traynor that a
major part of these companies' activities is in the receipt of funds on
which taxation has been avoided.

The largest of the offshore subsidiaries is the Cayman Island company

which we understand has received no funds from the Scheduled
nd
Territories since 22 June 1972 - the date the Cayman Islands became
in effect a foreign state for exchange control purposes

The bank is in effect offering a special service which assists persons to

transfer funds, on which tax has been avoided, to offshore tax havens.
The possibility of the bank abusing its position as an authorised dealer
in providing this service cannot be ignored.

In view of the delicate nature of these matters we did not pursue the
matter further

The directors of the bank were initially reluctant to give information

about the activities of these companies to the Central Bank because it
feared that the information might be conveyed to the revenue
authorities. With regard to cases where loans by Guinness and Mahon
(Dublin) were secured by complex back-to-back arrangements of
deposits in these companies, we were given sight of copy security
documents but were requested not to note the names in which the
deposits were held. This we agreed to do. No files or records relating
to customer transactions with these companies are retained in Dublin.
The bank fears that the retention of such files would give grounds to the
revenue to claim that the companies are managed by Dublin and also
individual files might come into the hands of the revenue authorities.
 We have been assured by Mr Traynor that no funds from Ireland have
been transferred to the Cayman Islands since 22nd June 1972.

Deposits held by the Cayman company have, however, increased by

£4.7 million to £14.3 million during the twelve month period to 31
March 1976. We have been assured that this increase has been
obtained through deposits from the United States and Jamaica. We
have no evidence to support this information.'

Mr Adrian Byrne, the Lead Examiner on the 1976 inspection, gave evidence to the
Inspectors in relation to these entries in the examination report. He told the Inspectors
that what the examiners encountered - ' ...just didn 't smell right it didn 't taste right.
There was something wrong.'

Mr Byrne told the Inspectors that, when the examiners wrote of the possibility of the
bank abusing its position as an authorised dealer, they were drawing the attention of the
reader of their report to the clear possibility that the bank was involved in a scheme of tax
evasion. The only readers of the report would have been people holding some senior
position within the Bank. He was also drawing the attention of the reader to the fact that
they, as examiners, did not pursue the matter further. Mr Byrne also told the Inspectors
that the concerns of Guinness and Mahon to ensure secrecy and to ensure that
information did not find its way into the hands of the Revenue Commissioners were
completely out of the ordinary. Neither before 1976 nor since then had he encountered
such a level of concern on the part of any other financial institution.

It is clear that Mr Byrne's own impression was that the bank examiners had encountered
systematic tax evasion rather than avoidance. Without proof, he was reluctant to
formalise such a conclusion in writing but he wanted to signal it as a clear possibility. He
did not think it appropriate on the basis of the information then available to characterise
all concerned as engaging in tax evasion. The examiners report was reviewed by Mr
Bernard Daly who was the Manager of Banking Supervision. Senior to him was the
Assistant Director General who at that time was Mr Timothy O'Grady-Walshe. The next
most senior man was the Director General of the Bank who at that time was Mr Bernard
Breen and the person in overall charge was the Governor of the Bank who at that time
was Mr Charles Murray. Mr Byrne believes that his report would have been discussed
internally within the Bank but cannot recall any specific discussion in relation thereto. In
any event, arising out of the 1976 inspection, the Bank wrote to the Chairman of
Guinness and Mahon by letter dated 9 September 1976 which letter went under the hand
of the Governor. In that letter it was stated:

'A number of points of serious concern have emerged from the

examination which the Bankfeels ought to be brought to your attention.

Tax havens
The examination revealed that Guinness and Mahon Limited has
banking subsidiaries, closely connected with the Irish bank, operating
in offshore tax havens. The Bank is somewhat concerned at the extent
of this involvement and would welcome an opportunity to discuss the
matter.'

Guinness and Mahon Limited replied by letter of 26 November 1976 and in relation to
this particular concern on the part of the Bank replied as follows:

'I would not altogether be happy with your understanding of our

situation in this regard and would certainly welcome the opportunity of
discussing the matter.'

It is clear from this correspondence that the concerns which the bank examiners had
expressed had fed their way into the system in the Bank and were now being recorded,
albeit in somewhat discreet terms, by the Governor of the Central Bank. Ultimately, a
meeting was held on 8 February 1977 between the Bank and Guinness and Mahon.
Minutes of the meeting appear to have been kept by Mr Bernard Daly who appears to
have attended the meeting along with Mr O'Grady-Walshe on the part of the Bank. In
relation to this aspect of matters the minute records as follows:

'Tax havens
Mr Traynor outlined in some detail the operation of the bank's
subsidiary companies in the Cayman Islands, Guernsey and Jersey. He
stressed that they were basically trust companies but that a proportion
of the assets being managed were deposited with the trust companies
themselves. The three companies in question had banking status. He
also emphasised that the funds were not placed on deposit for the
purpose of tax avoidance or evasion. (Mr O'Grady-Walshe and I
discussed this matter subsequently and agreed that we should talk with
Guinness and Mahon again concerning this matter at a later date).'

It is clear, therefore, that, from as early as 1976, the Bank had concerns in relation to the
activities of the Cayman subsidiary of Guinness and Mahon. Those concerns centred
upon the back-to-back deposit arrangements and, in short, the concern was to the effect
that the bank was facilitating tax evasion on the part of Irish residents. On behalf of
Guinness and Mahon Mr Traynor was maintaining the position that the arrangements
were neither for the purpose of tax avoidance or tax evasion, but, from the decision of Mr
O'Grady-Walshe and Mr Daly to discuss the matter further, it appears that the Bank
continued to have reservations.

25.5 The 1978 inspection and related events

On average, the Bank conducted investigations approximately once every two years. The
first inspection of Guinness and Mahon subsequent to the 1976 inspection was in fact
conducted in June and July of 1978. Earlier in 1978, however, an issue arose regarding
the free resources ratio 1 of Guinness and Mahon. At a meeting held on 25 January 1978
between Mr Traynor and Mr O'Kelly on behalf of Guinness and Mahon and Mr

1
The free resources ratio is a concept relevant to the amount of capital required to be held by a
licensed bank.
O'Grady-Walshe and Mr Daly on behalf of the Bank, Mr Traynor indicated that Guinness
and Mahon had loans of approximately IR£4 million which were secured by deposits
placed with the bank's Cayman Islands subsidiary and he requested that the Bank would
consider these loans as non-risk for the purpose of calculating the free resources ratio.
This specific request of Mr Traynor's was considered by the Bank and in particular by
Mr Byrne in the first instance. He wrote a recommendation in the following terms:

'From the information available it would appear that the loans were
secured by cash deposit and as such form a normal back-to-back
arrangement. However the fact that the bank takes such extreme
precautions to keep the existence of the deposits secret from the
Revenue Commissioners indicates that the bank might well be a party
to a tax evasion scheme. Should this be the case and the Bank accepts
the right of set-off for the purpose of calculating the free resources
ratio the Bank would be placed in a very embarrassing position should
the revenue authorities ever become aware of the situation. It is
therefore recommended that the Bank does not accept a right of set-off
for the purpose of calculating the free resources ratio.'

The word 'evasion' in this recommendation was crossed out and in manuscript the word
'avoidance' was substituted. This was not the first alteration of such a nature made by
the Bank. In the 1976 examination report, a reference by Mr Byrne to tax evasion in the
context of Guinness and Mahon Channel Islands Limited was altered to refer to tax
avoidance. The Inspectors have been informed by solicitors for the Bank that the official
who effected these changes has no recollection of these events.

Whether the written reference be to tax avoidance or to tax evasion, it is clear from this
recommendation that the Bank continued to have concerns regarding the Cayman
deposits and that at least some members within the Bank were of the view that Guinness
and Mahon was involved in a tax evasion scheme. Mr Byrne's recommendation was
accepted by his superiors within the Bank. Mr Daly telephoned Mr Traynor on 23 March
1978 and informed him that the Bank had considered the question of the cash backed
loans and had decided they should continue to be regarded as risk assets. He also
intimated to Mr Traynor that Mr O'Grady-Walshe might wish to discuss the 'tax' aspect
of the loans at a later date.

By the time the 1978 inspection was conducted, Mr Adrian Byrne had been promoted and
was now the review person on that examination. The examination was conducted by
John Fitzgerald, Michael Burke and John Hynes. The examination report contained a
summary of the main findings, the first of which was in the following terms:

'The bank is participating in taxation avoidance arrangements.'

In relation to this aspect of the main findings the report states as follows:

'The bank has advanced loans amounting to £5.5 million which,

according to the books and records of the bank, are either partially
secured or unsecured ... We have been informed by the Vice Chairman
of the bank, Mr D. Traynor, that each of these loans are, in effect,
secured by means of a cash deposit placed with Guinness and Mahon
Cayman Trust Limited - a wholly owned subsidiary of the bank, or with
G&M Guernsey Limited, a wholly owned subsidiary of Guinness
Mahon Limited London. These deposits are placed as part of a
complex tax avoidance scheme and considerable measures are being
taken by the bank to ensure that knowledge of the existence of the
scheme does not become known to the revenue authorities in Ireland.

The scheme, as we understand it, operates as follows ' [there then

follows a detailed and accurate description of the scheme]

The first of the conclusions and recommendations to the 1978 examination report is in the
following terms:
 'Taxation avoidance scheme
The bank has advanced loans amounting to £5.5 million to customers
which are secured by deposits placed with Guinness and Mahon
Cayman Trust Limited or Guinness Mahon Guernsey Limited. These
deposits form part of tax avoidance schemes. The full extent to which
the bank is involved in these schemes is difficult to determine. We are
of the view that while the provision of advice on tax avoidance within
the law may be an acceptable part of the work of any bank, it is not, in
our view, appropriate or ethitical (sic) for a bank to participate in, as
distinct from advise on, tax avoidance schemes. We suggest, therefore,
that the bank should cease its participation in these schemes.'

The Inspectors were initially surprised that it should have been the view of the Bank that
it was either inappropriate or unethical for a bank to participate in tax avoidance schemes.
Of course, it would be quite inappropriate and unethical for a bank to participate in a tax
evasion scheme and the Inspectors wondered whether this is really what the report
intended to convey. On this issue the following exchange took place with Mr Byrne, who
was the reviewer of that report, in the course of his evidence to the Inspectors:

'Q. Is it the view of the Central Bank that it is not ethical for a bank
to participate in a tax avoidance scheme?
A. I don't... well, I don't know whether that is coding again.
Q. Yes, yes. You see it is certainly the view, I take it, of the Central
Bank that it is not ethical to participate in a tax evasion scheme?
A. Well, yes.
Q. Is that what that is really saying?
A. I suspect it is.
Q. Right?
A. I don't know but again I think it is code for evade, yes.'
It is clear, therefore, that by 1978 the Bank's concerns in relation to the cash backed
deposits were such as to cause the Bank to recommend that Guinness and Mahon should
cease its participation in a scheme involving back-to-back deposits. Whether the
terminology used was tax avoidance or tax evasion the message was clear.

There is one further feature of the 1978 inspection worthy of remark. In 1978 as opposed
to 1976, Guinness and Mahon produced for the Bank a list of the major loans backed by
deposits held in Cayman/Guernsey Trust companies. That list included a loan of some
IR£416,000 to Mr Ken O'Reilly-Hyland secured by a deposit of IR£230,000 in Cayman.
Mr O'Reilly-Hyland was at that time a director of the Bank. There is considerable
uncertainty as to what if any steps were taken upon receipt of this information. So far as
Mr Byrne is concerned, the matter was recorded in the examination report for others to
deal with as they saw fit. Mr O'Grady-Walshe has no specific recollection in relation to
the matter but feels sure he would have mentioned it to his superiors. Mr Charles
Murray, the then Governor, has no recollection of the matter being raised. There appears
to be no documentary record within the Bank recording receipt or consideration of this
information. There is nothing in the evidence to indicate, and the Inspectors do not
suggest, that the view which the management and the Bank took at the time of Guinness
and Mahon's involvement in such cash back loan business was in any way influenced by
Mr O'Reilly-Hyland's personal situation.

Following upon the Bank's 1978 inspection, there was a meeting on 13 September 1978
between Mr Traynor and Mr O'Kelly on behalf of Guinness and Mahon and Mr Daly, Mr
Byrne and Mr Fitzgerald on behalf of the Bank. The Bank's minute of that meeting
records a discussion in relation to tax avoidance schemes in the following manner:

'Mr Daly said that the Central Bank was not happy with the extent of
the bank's involvement in tax avoidance schemes. The Bank felt that
such schemes were not in the national interest and it was considering
whether to request Guinness and Mahon Limited to wind down its
activities in this area. Mr Traynor said that such request would make
 him very unhappy. He added that it was not correct to say that the
bank was involved in any tax avoidance scheme. The schemes to which
Mr Daly was referring were devised and arranged by the bank's
customers and their financial advisors. The bank merely informed its
customers of the existence of the banking facilities available in
Guernsey and which were formerly available in the Cayman Islands.

It is clear from this minute that the Bank's concerns were being expressed now in ever
more trenchant terms ('such schemes were not in the national interest') whilst Mr
Traynor was maintaining his position that the schemes were legitimate. The Bank
appears not have been convinced by Mr Traynor's protestations. On 1 November 1978,
Mr O'Grady-Walshe on behalf of the Bank wrote to Mr Guinness, the Chairman of
Guinness and Mahon Limited. Referring to its offshore banking activities Mr O'Grady-
Walshe wrote:

'We are of the view that there can be no reason for these arrangements
other than to reduce the tax liabilities of the customers in question. It
appears to the Central Bank that your bank's involvement in such
arrangements is inappropriate and could be considered to be contrary
to the national interest.'

Mr Guinness replied by letter of 1 February 1979 in which he emphasised the complexity

of the arrangements and suggested that both Mr Traynor and Mr O'Kelly might meet
Central Bank representatives to discuss the whole matter in detail. Such a meeting
ultimately took place on 7 March 1979. It was attended by Mr Daly and Mr Byrne on
behalf of the Bank. At the meeting, each side maintained its position. Mr Daly indicated
that the Bank could see no logical reason for the arrangements other than to assist
customers to avoid taxation, whilst Mr Traynor emphasised that all the loans represented
genuine banking loans. The impasse between the two sides appears to have been
resolved by Mr Traynor stating that the then level of loans which had cash deposits
placed in offshore banks as securities would not increase. He went so far as to say that
since 1972 (when the Cayman Islands ceased to be part of the sterling area), no new loans
had been granted where deposits held in the Cayman Islands formed part of the security
and that it seemed to him that the introduction of the then new exchange control
regulations would effectively end further loans being advanced where deposits held in the
Channel Islands formed part of the security. A minute of the meeting records Mr Daly on
behalf of the Bank as indicating that, in view of this assurance given by Mr Traynor that
the level of loans was likely to be reduced in the future, the Bank would not wish to
pursue the matter further. Mr Byrne, giving evidence to the Inspectors, felt it unlikely
that Mr Daly would have been authorised to give such a commitment at the meeting and
feels it likely that such a commitment was given by Mr Daly subject to ratification by his
superiors within the Bank. In any event, by August of 1979, Mr Traynor appears to have
modified his position somewhat. A minute of a standard review meeting with
representatives of the Bank records Mr Traynor, when referring to the Cayman deposits,
as saying that there was little increase in activity in the Cayman company in the last few
years and that he did not think it would grow any further.

The meeting is significant in one other respect: it appears to be the first occasion upon
which the Bank learned of the routing of money of Irish depositors through Guernsey, on
to Cayman and back to Ireland. The minute of the meeting records the Bank being told
that Guinness Mahon Guernsey Limited acted as a trustee to hundreds of discretionary
trusts which owned companies with a registered office in Cayman. The Bank was
informed that deposits from Irish residents were placed in the name of one of these trusts
which lent on the money to one of the companies with the funds in turn being deposited
with the Cayman bank. The Cayman bank then redeposited the funds with the Dublin
bank which was then enabled to give an advance to the original depositor secured by the
funds.

It appears that matters rested there until 1981. At a standard review meeting held on 29
April 1981, there appears to have been some passing reference to particular loans with a
Cayman connection but there appears to have been no further discussion of the overall
nature of this banking activity or of its taxation implications. It appears therefore that,
whilst the Bank's concerns about the nature of the activity were never allayed by Mr
Traynor, his assurances that the activity would not increase and would likely decrease
were sufficient to persuade the Bank to leave matters rest. A further review meeting in
February of 1982 produced no reference to the Cayman deposits.

25.6 The 1982 inspection and subsequent events

The third inspection of Guinness and Mahon was conducted in the months of August and
September of 1982 by Neil Kennedy and Catherine Heery. Once again their inspection
report was reviewed by Mr Byrne. Their report was not in fact completed until April
1983.

The 1982 report begins with a summary of the main points to arise from the inspections
in 1976 and 1978. Surprisingly, there is no reference to the participation by Guinness
and Mahon in what had previously been described as 'taxation avoidance arrangements'.
This is so notwithstanding the fact that this was the first of the main findings of the 1978
report.

The issue of back-to-back loans was touched upon in the 1982 report. An extract from
the report identifies the major loans and identifies one company as having a loan of
IR£870,000 with a backing deposit held in the Cayman Islands. An appendix to the
report indicated that in the case of this company the sum on deposit in the Cayman
Islands was STG£720,000. That information is of some significance because in 1978
when the Bank was first provided with a list of borrowers with back-to-back deposits that
list revealed that this company had a loan of IR£595,000 secured by a deposit in
Guernsey of IR£595,000. Here then was evidence of the routing of monies to Cayman
via Guernsey and an increase of the sums on deposit in Cayman. Later in the 1982 report
however it is stated:

'No funds have been transferred from this country to the Cayman
Islands since 1972.'
Even if this representation from Mr Traynor was accurate (which it was not), it
represented only the literal truth because it was clear that money was being routed from
Ireland to Cayman via Guernsey. That information was available to the Bank.

It is clear from the 1982 report that the Bank continued to harbour reservations
concerning Guinness Mahon's operations in Cayman. The following is an extract from
the report under the heading 'Guinness Mahon Cayman Trust':

'The balance sheet of the company at 30 September 1982 is contained

in Appendix 22. It shows that the company had assets of £166 million
at that date comprised mainly of liquid assets (£128 million). Advances
by the company amount to only £36 million. As far as we are aware
the bank conducts normal banking operations. It is a matter for
consideration as to whether we should seek to verify this
understanding.'

In relation to this extract of the report, Mr Byrne confirmed to the Inspectors that the
report revealed a 'very high' liquidity ratio and that the references to 'As far as we are
aware', 'normal banking operations' and 'whether we should seek to verify this
understanding' were intended to convey a concern on the part of the Bank regarding the
operations in Cayman. On this issue, the following exchange took place between the
Inspectors and Mr Byrne:

'Q. And somebody records that this is a matter for consideration as

to whether you should seek to verify that understanding?
A. Yes.
Q. What concern has there been signalled?
A. That all might not be well.
Q. Yes.
A. Or what is the Cayman bank at? What type of business is it in?
 Q. It is the same concern all the way is it not?
A. Well, yes.
Q. Yes?
A. I think so.
Q. Does this heighten your concern; this information that you have
in relation to the balance sheet?
A. Well, it would do. I presume that when one saw those figures the
immediate reaction was, 'it is a very highly liquid bank'.
Q. Yes?
A. And 'just let's see what is behind it'. That no doubt was raised
there and that was the question.'

On 12 January 1983, Mr Byrne and Mr Kennedy on behalf of the Bank attended a

meeting with Mr Traynor, Mr O'Kelly and Mr McCleane of Guinness and Mahon. The
meeting was held to discuss the outcome of the 1982 inspection. At this meeting, Mr
Byrne referred to the commitment given subsequent to the 1978 inspection whereby the
bank undertook to reduce its involvement in back-to-back lending. In response, Mr
Traynor said that there had been no increase in the level of this type of lending. He
provided a list of loans under this heading which totalled IR£1.9 million.

At further meetings in May of 1983 and January of 1984 between Bank personnel and
Guinness and Mahon personnel, no reference was made to the back-to-back deposits.

On 18 July 1984, Mr O'Grady-Walshe and Mr O'Sullivan on behalf of the Bank met with
Mr Pender of Guinness and Mahon. The purpose of the meeting was to discuss matters
relating to emerging bad debts in Guinness and Mahon and related concerns. Mr
O'Grady-Walshe indicated that the Bank was considering carrying out an inspection in
Guinness and Mahon. He also referred to developments in bank supervision generally
both at home and abroad, focussing particularly on the need for adequate supervision in
relation to banking subsidiaries and the application of prudential supervision on a
consolidated basis. In keeping with this, Mr O'Grady-Walshe indicated that the Bank
would wish to extend its prudential surveillance to Guinness and Mahon Cayman Trust
Limited. Mr Pender indicated that it would be necessary to speak to Mr Traynor about
that matter. The Bank was aware at this time that Guinness and Mahon's subsidiaries
were contributing approximately 50% to the total group profits.

Ultimately, a decision was taken by Guinness and Mahon to sell its subsidiaries to its
London parent for a consideration of IR£4.7 million. That decision had a number of
consequences from the Bank's perspective. Firstly, the capital ratio concerns arising
from the bad debt situation were removed and, secondly, the supervisory concerns
regarding the Cayman operation appeared to become the concerns of the regulatory
authorities in the United Kingdom rather than those of the Bank.

25.7 The 1986 inspection and subsequent events

The 1986 inspection was carried out in the months of February and March of 1986. The
examiners were Mr Neil Kennedy and Ms Ann Horan. Their report was completed on 2
May 1986. Mr Byrne had by this time been promoted further and was not therefore the
reviewer of this examination report.

The foreword to the report records a number of significant happenings, including the sale
of Guinness Mahon Cayman Trust, the resignation of Mr O'Kelly as Managing Director
of the bank consequent upon the collapse of a textile company which had substantial
borrowings from the bank and the announcement of Mr Traynor's resignation as Chief
Executive and Deputy Chairman of the bank. Under the heading 'Hypothecated Deposits
to Secure Loans' the following entry appears:

'Deposits amounting to £11.1 million, as at 31 December 1985, were

hypothecated to secure loans to customers and are not included as
advances on the balance sheet. These are loans granted by the Dublin
bank on the strength of deposits held in the Cayman Islands and other
offshore locations. When these loans are granted an equivalent
amount offunds is transferred from the offshore location to the Dublin
 bank. Most of these loans are to non-residents. In the case of loans to
residents Mr Pender said that it is possible that some tax liability could
arise in the event of default but should this arise additional funds can
be transferred to Dublin should this be required. '

An appendix to the report gives a breakdown of the deposits amounting to IR£11.1

million and does indeed indicate that the bulk of those deposits are referable to non-
residents. However, even a cursory examination of the details set out in the appendix to
the 1986 report would reveal that the profile of the Irish resident loans and deposits was
significantly different from the profile of the Irish resident loans and deposits referred to
in earlier inspection reports. At a minimum, if this information was correct, it indicated
that new loans were being granted to Irish residents and new deposits received for and on
behalf of Irish residents. In fact, the information supplied by Guinness and Mahon was
not accurate but, even taken at face value, it indicated that the assurances previously
given by Mr Traynor were not being honoured.

Another significant factor emerging from the 1986 report is that the Bank now appeared
to be willing to permit Guinness and Mahon to exclude hypothecated loans from risk
assets. This was confirmed, in terms, in the 1988 inspection report. The Bank had
previously dealt with a specific request from Mr Traynor to treat the hypothecated loans
in such a fashion and, after a detailed consideration, had declined that request. This
significant change of policy on the part of the Bank in 1986 and subsequently is not
recorded in any document and indeed there is no documented consideration of the issue.
Giving evidence to the Inspectors, Mr Byrne stated as follows:

'There would have been in a sense that, when we said no to the set-off
originally it was because we were generally unhappy with this tax
scheme because there was uncertainty as regards the whole legality of
the thing, whether if the thing was actually called on, could they get the
security in. It was basically surrounding that specific set of loans. But
hypothecated loans or back-to-back loans were set-off, which is quite
 normal banking practice. So once we got over that particular hump
and we regarded these as legitimate back-to-back loans, we did allow
set-offs. They were loans to non-residents secured by deposits, by
cash.'

This answer is illuminating in a number of respects. Firstly, it confirms that the Bank at
all times had reservations about back-to-back loans involving Cayman. Secondly, it
indicates that the Bank did take at face value Mr Traynor's assurances that the amount of
such loans involving Irish residents was being run down even though the Bank was being
furnished with information indicating that new loans were being granted and new
deposits received. Thirdly, it suggests that the Bank was prepared to take a more relaxed
view in circumstances where the loans involved non-residents (and not all of them did)
even in circumstances where the lending bank was subject to the supervision of the Bank.

25.8 The 1988 inspection and subsequent events

The fifth inspection took place in the month of February 1988. The examiners were Mrs
A Horan, Ms E Byrne and Mr T Donovan.

The report contains little information in relation to Cayman but does confirm that
deposits at the bank amounting to IR£8.6 million at 31 January 1988 were hypothecated
to secure loans to customers and were therefore excluded from risk assets. Once again,
an appendix is attached to the report detailing the loans so hypothecated and, at least in
respect of Irish resident persons, that appendix is wholly misleading. Once again, it
would appear that Guinness and Mahon furnished misleading information to the Bank.

There existed some controversy between Mr Terry Donovan, one of the examiners on the
1988 inspection, Mrs Horan, another of the 1988 examiners and Mr Byrne regarding
concerns that had been raised by Mr Donovan relating to the Guinness and Mahon back-
to-back loans. Mr Donovan appeared to feel that legitimate concerns that he was raising
at the time were not being taken sufficiently seriously by other members of the Bank
staff. Mrs Horan and Mr Byrne disagree with some of Mr Donovan's recollections but
Mr Donovan in any event was putting the matter no further than to suggest that the Bank
had perhaps been unduly hasty in disregarding matters which have subsequently turned
out to be highly significant.

Another matter which arose in late 1988 was the issue of the appointment of an internal
auditor to Guinness Mahon. This topic had been the subject of earlier initiatives on the
part of the Bank. From 1982 onwards, the Bank had stressed the importance of the
internal audit function and had made a direct request of Guinness and Mahon in June
1986 requiring deficiencies in that respect to be corrected. On 21 November 1988, the
Chairman wrote to the Bank indicating that the position of internal auditor had not been
filled since the resignation of the previous incumbent but that the function was being
fulfilled by the internal auditor of Guinness Mahon London. Mr Byrne informed the
Inspectors that the Bank would draw comfort from the workings of an internal auditor. In
the event, the internal audit report for Guinness and Mahon of 1989 revealed some
startling new information which was never made available to the Bank. In fact, Mr
Byrne was not in a position to indicate whether the Bank had even requested sight of the
report. The 1989 internal audit report in fact revealed the existence of the memorandum
accounts and had that information been made available to the Bank it is likely to have
sparked a very significant reaction, particularly in light of the concerns which the Bank
had in relation to Guinness and Mahon over a considerable period of time.

25.9 The current view of the Central Bank in relation to the activities of
Ansbacher
Witnesses on behalf of the Bank have been asked a number of questions based upon the
knowledge which they now have of the activities of Ansbacher as opposed to the
knowledge which they had at the time of conducting the examinations referred to above.
They are consistent in their view that the activities of Ansbacher in Dublin constituted the
acceptance of deposits and hence banking, within the meaning of the Central Bank Acts,
and that such an activity was unlawful in the absence of a licence. Speaking generally in
relation to Ansbacher's activities, Bank witnesses spoke of being 'outraged' whilst Mr
Byrne in particular stated that he felt 'very betrayed by a lot of people in Guinness and
Mahon particularly Mr Traynor'. Mr Byrne also made it clear that had the Bank known
all of what was actually happening in Guinness and Mahon there would be no 'doubt or
hesitation as to what the Central Bank would have done'. In a subsequent written
submission, the Bank has indicated what it would in fact have done: namely, conduct a
thorough investigation of Guinness and Mahon with a view to ensuring that persons
concerned in the unlawful activities and the deception practised on the Bank would have
no place in the banking industry and to take any necessary legal proceedings and also to
co-operate with the Director of Public Prosecutions in any criminal investigation.

25.10 Conclusions on the role of the Central Bank

In the light of the evidence which has been summarised above the Inspectors reach the
following conclusions in relation to the role of the Central Bank:

(1) The Central Bank examiners, and in particular, Mr Byrne, deserve

credit for detecting the unusual nature of the services being offered by
Guinness and Mahon's Cayman subsidiary and for raising the question
as to whether or not the Bank was abusing its position as early as 1976.

(2) There may have been a certain reluctance on the part of some members
of Central Bank staff to formalise a charge that Guinness and Mahon
was engaged in tax evasion, but the suggestion in 1978 that it was not
appropriate or ethical for Guinness and Mahon to continue to engage
with the particular back-to-back loans then under consideration and the
suggestion that the bank should cease its participation in such
arrangements is a clear indication that the Bank had very serious
concerns regarding the operations of Guinness and Mahon at that time.

(3) Mr Traynor sought to mislead the representatives of the Bank when

insisting that the arrangements in Cayman involved neither tax evasion
nor tax avoidance. He did not succeed in misleading the Bank, which
 at all times harboured reservations in relation to the back-to-back loan
arrangements.

(4) The Bank was persuaded not to take action in relation to these
arrangements, not by any suggestion that they were wholly innocent,
but rather by a representation from Mr Traynor to the effect that their
volume would not increase and would in all likelihood decrease. This
representation appears to have been accepted by the Bank, and indeed
information was subsequently furnished by Guinness and Mahon to the
Bank tending to support the accuracy of that representation. The
representation was untrue and the information furnished to support it
was misleading. It was unwise of and regrettable for the Bank to have
accepted Mr Traynor's representations, particularly in circumstances
where the Bank already harboured reservations about his protestations
of innocence regarding the back-to-back deposits. Furthermore, there
was information available to the Bank which on any reasonable
analysis demonstrated that Mr Traynor's representations were
inaccurate.

(5) It is regrettable that the Bank did not secure sight of the reports from
the internal auditor of Guinness and Mahon and in particular, the
internal audit report of 1989. Had the Bank considered that report it
would have been forced to take serious action. The ongoing
involvement of Mr Traynor and Mr Collery would have been revealed,
as would evidence suggesting the conduct of unlicensed banking
business by Ansbacher in Ireland. The suspicions regarding a tax
evasion scheme would have been heightened even further. In such
circumstances, it seems inconceivable that the Bank would have
permitted any of Ansbacher's activities in Ireland to continue.
(6) At all material times and even prior to the passing of the 1989 Central
Bank Act, the Bank had sufficient powers available to it, be it by threat
of revocation of a licence or by the attachment of conditions to the

licence, to ensure that Guinness and Mahon did not involve itself in
inappropriate banking activity. Had the Bank probed Mr Traynor's
representations further in the early 1980s, there is good reason to
believe that the Bank could have availed of these powers to put an end
to Ansbacher's activities in Ireland. It seems certain that had the Bank
seen the internal audit report in 1989, it would have availed of these
powers to ensure an end to Ansbacher's activities.

(7) A combination of the misleading information furnished by Guinness

and Mahon and in particular by Mr Traynor and a failure on the part of
the Bank to test, appraise and gather the information available to it
resulted in the true nature of Ansbacher's activities going undetected
for longer than ought to have been the case.
 CHAPTER 26

EXCHANGE CONTROL

INDEX

Page

26.1 Introduction 475

26.2 Statutory Framework 475

26.3 Conclusions 476

EXCHANGE CONTROL

26.1 Introduction
In Chapter 4, the Inspectors concluded that Ansbacher had been carrying on an
unlicensed banking business in Ireland. The operation of this business should have
brought Ansbacher within the exchange control regime that operated in Ireland from
1954 until 1992. However, in the absence of a banking licence, the company appears to
have relied on its banking relationship with Guinness Mahon and IIB in this regard.

26.2 Statutory Framework

The Central Bank has provided the Inspectors with a summary of Exchange Controls,
which is set out in Appendix XVII(a). The Exchange Control arrangements in Ireland
sought to apply an 'economic' rationale for implementing exchange controls, with its
main purpose being to safeguard the Official External Reserves and to regulate the effects
of capital movements on the exchange rate of the Irish pound.

From its introduction in 1954, the legislation was developed to reflect Ireland's
participation in the economic development of Western Europe, including the country's
membership of the EEC in 1973, the break with the pound sterling in 1978, the creation
of the International Financial Services Centre in 1987 and the gradual movement towards
the abolition of controls in 1992.

Responsibility for exchange controls was with the Minister for Finance to effect
regulations by way of statutory instruments. He delegated his power to established banks
who acted as Authorised Dealers. One such was Guinness and Mahon. In 1965, the
Minister delegated to the Central Bank responsibility for administering most of the
exchange control system.

26.3 Conclusions
Ansbacher's trading in Ireland was assisted through its banking relationships with,
mainly, Guinness and Mahon, and, from 1991 (by which time exchange controls had
largely been abolished), IIB.

The Inspectors are satisfied that any arrangements made by clients with Mr Traynor
during the period of exchange control were on the basis that Guinness and Mahon or
other Irish financial institution acting on the instructions of Mr Traynor would take
whatever steps were necessary in relation to exchange control. Guinness and Mahon
were at all times authorised dealers for exchange control purposes. In that context, the
individual clients could not be held responsible for any exchange control issues.

The Inspectors are satisfied that in so far as any exchange control difficulties arise for
Guinness and Mahon or IIB from the activities of the company under investigation these
are matters to be taken up (if necessary) by the Central Bank with the institutions
involved. These matters therefore fall outside the scope of the Inspectors remit to
investigate Ansbacher (Cayman) Limited.
 THE ROLE OF THE AUDITORS OF GUINNESS AND MAHON

INDEX

Page
27.1 Introduction 478

27.2 Auditors of Ansbacher (Cayman) Limited 478

27.3 The central role of Guinness and Mahon in the context of its auditors'

actions 479

27.4 The relevant period 479

27.5 Duties of Guinness and Mahon auditors relative to Ansbacher 480

27.6 Assistance provided to Ansbacher by Guinness and Mahon 480

27.7 Incomplete information 480

27.8 Auditors 481

27.9 Conclusions 481

ROLE OF THE AUDITORS OF COMPANY AND GUINNESS AND MAHON

27.1 Introduction
In accordance with the terms of the High Court Orders from which the Inspectors derive
their authority, the Inspectors have also considered the role of auditors in the matters
under investigation. The Inspectors are conscious that their mandate relates to
investigating Ansbacher, not the auditors. However, the Inspectors have concluded that,
as auditors should have a watchdog type role (which should, if properly performed, have
had a bearing on the activities of Ansbacher), some examination of their role was
appropriate. The Inspectors therefore decided that the role of the auditors could be a
related matter within the meaning of the High Court Order and considered the matter in
that limited context.

27.2 Auditors of Ansbacher (Cayman) Ltd

The Auditors of Ansbacher (Cayman) Limited are outside this jurisdiction and operate
under the laws of the Cayman Islands. The Inspectors concluded that no useful purpose
would be served in seeking to investigate the manner in which such audits were carried
out as any relevant investigation would be hampered by the confidentiality laws of
Cayman. This view was confirmed by legal advice from the Inspectors' Cayman
lawyers.
27.3 The central role of Guinness and Mahon in the context of its auditors'
actions
The Inspectors' initial assessment of the actions of Irish based audit firms mainly centred
on the audit of Guinness and Mahon. From the date of Ansbacher's incorporation in
1971 until 1991, when the Ansbacher accounts were moved to IIB, Guinness and Mahon
played a central role in the unlicensed banking operation described in this Report. The
Henry Ansbacher Group only acquired GMCT after it had traded illegally for 16 years
within the Guinness Mahon Group under the Guinness Mahon Cayman Trust name.

27.4 The relevant period

Between 1971 and 1991, various changes occurred which are relevant in the auditing
context.

1. From 1971 to 1984, GMCT was a subsidiary of Guinness and Mahon. The Irish
business of the company was conducted from Guinness and Mahon's offices.

2. From 1984 to 1988, GMCT was a subsidiary of Guinness Mahon London. Its
Irish business was conducted from the offices of Guinness and Mahon up to 1986;
up to 1987, it operated from an office provided by Guinness and Mahon to Mr
Desmond Traynor and thereafter from Mr Traynor's office at CRH plc.

3. From 1988, GMCT (now renamed with an Ansbacher title) was part of the
Ansbacher group. It was merely a customer of Guinness and Mahon, as it was
later of IIB and Bank of Ireland Private Banking Ltd. Its location in Ireland
continued to be at the office of CRH plc.

From the foregoing, 1the Inspectors are of the view that the relevant period so far as the
role of the auditors is concerned is the period 1971-1988.
27.5 Duties of Guinness and Mahon auditors relative to Ansbacher
The duties of the auditors of Guinness and Mahon relative to its interface with GMCT
changed as the Cayman company moved from subsidiary to sister company to mere
customer. The overriding consideration remained constant, however. Any interaction
between GMCT/Ansbacher and Guinness and Mahon, which would have affected the
true and fair view of Guinness and Mahon's balance sheet, should have been reflected in
the audit process and reports.

27.6 Assistance provided to Ansbacher by Guinness and Mahon

The Inspectors have concluded that GMCT/Ansbacher carried on business in Ireland as a
bank, without a licence (see Chapter 5). The Inspectors have concluded that it was
facilitated in this by Guinness and Mahon in every way (see Chapters 6 and 14). This
assistance was particularly important in the years prior to 1988. During most of this
period, staff of Guinness and Mahon were used to update and maintain the records of
GMCT's Irish customers; Guinness and Mahon operated accounts as non-resident when
it knew them to be beneficially owned by Irish persons; it provided back-to-back
facilities to Irish persons on the basis of incorrectly drafted letters of offer (omitting the
back-to-back security); and it provided the facilities whereby GMCT received
lodgements and made payments to Irish persons. Some of these activities left traces in
the records of Guinness and Mahon, which might have alerted its auditors to what was
happening.

27.7 Incomplete information

The Inspectors sought the assistance of the audit firms associated with the audit of
Guinness and Mahon in respect of audit records. The Inspectors are satisfied that audit
files for much of the period no longer exist and any consideration of the matter on the
basis of incomplete information must take cognisance of that limitation.
27.8 Auditors
Up to 1973, Craig Gardner (now PricewaterhouseCoopers) were the auditors for
Guinness and Mahon. From 1973 to 1981, Touche Ross based in London were the
auditors but the work was carried out by Stokes Kennedy Crowley (SKC), an Irish firm,
which is now part of KPMG. From 1982 to 1986, Touche Ross (now Deloitte & Touche)
were the auditors. From 1986 onward, the auditors were Cooper & Lybrand (now
PricewaterhouseCoopers). The Inspectors have interviewed representatives of these
firms and received information on the audits conducted. This information is limited and
largely unsupported by documentation for the period 1971 to 1988 when the involvement
of Guinness and Mahon's auditors should have been greatest due to the intermingling of
Guinness and Mahon and GMCT business. During that period, GMCT was first a
subsidiary of Guinness and Mahon and later a sister company within the Guinness and
Mahon Group.

27.9 Conclusions
The Inspectors conclude that it is a matter for the appropriate regulatory authorities to
consider whether the fact that different audit firms did not identify the evidence of
unlicensed banking business of GMCT over many years highlights any deficiency in
either the general practice relating to auditing of the banking sector, and/or, if
appropriate, in the manner in which the audit work was completed.

The absence of audit records over much of this period and the frequency of changes in
audit personnel make it unsafe for the Inspectors to attempt to identify individual
shortcomings by those who conducted the audits. Further, the Inspectors are of the view
that the assessment of responsibility on a firm-by-firm basis by them would require a
degree of speculation inappropriate to an investigation of this type.

Therefore it is for the regulatory authorities to decide whether they should or can, with
their greater powers and expertise, advance the issues raised by the Inspectors.
 PERSONS AND COMPANIES WHO FAILED TO CO-OPERATE WITH THE
INQUIRY

INDEX

Page

28.1 Introduction 483

28.2 List of those who failed to co-operate 483

28.3 Inspectors' recommendation 485

PERSONS WHO FAILED TO CO-OPERATE WITH THE INSPECTORS

28.1 Introduction
During the course of their Inquiry, the Inspectors considered that certain individuals who
had been required to assist them under Section 10 (2) of the Companies Act, 1990 had
ultimately failed to do so. In certain cases, the Inspectors considered that the lack of co-
operation by these people was sufficient to warrant mention to the Court. Those in
question are as follows:

28.2 List of those who failed to co-operate

Guinness Mahon & Company Limited, London ('Guinness Mahon London')

When the Inspectors made inquiries of Guinness Mahon London seeking information
regarding Ansbacher pursuant to the Companies Acts, the company failed to co-operate.
While the Inspectors understand the issues of confidentiality that arise for a bank in
relation to requests for information emanating from outside their jurisdiction, they
nevertheless point out the obligations imposed by the Companies Acts upon persons who
are or may be in possession of information concerning a company under investigation.

Investec Bank (UK) Limited ('Investec')

When the Inspectors made inquiries of Investec seeking information regarding Ansbacher
pursuant to the Companies Acts, the company failed to co-operate. While the Inspectors
understand the issues of confidentiality that arise for a bank in relation to requests for
information emanating from outside their jurisdiction, they nevertheless point out the
obligations imposed by the Companies Acts upon persons who are or may be in
possession of information concerning a company under investigation.
Mr Stephen Enoch
Mr Enoch refused to inform the Inspectors of the names of the other partners of Girard
Investments when required to do so during an examination under oath. Mr Enoch has
been found to be a client of Ansbacher (see Chapter 23).

Mr Bernard Etzin
Mr Etzin refused to respond to a written requirement of the Inspectors, which the
Inspectors can reasonably presume that he received. Mr Etzin has been found to be a
client of Ansbacher (see Chapter 23).

Mrs Nora Shanahan

Mrs Shanahan failed to respond to a written requirement from the Inspectors, which the
Inspectors can reasonably presume that she received. Mrs Shanahan has been found to be
a client of Ansbacher (see Chapter 23).

Mr Michael J Shanley
Mr Shanley refused to attend for examination as required in writing by the Inspectors and
failed to comply with a written requirement, which the Inspectors can reasonably
presume that he received. Mr Shanley has been found to be a client of Ansbacher (see
Chapter 23).

Mr Martin Turley
Mr Turley replied in writing to the Inspectors stating that he had no information relating
to Ansbacher. He failed to respond to subsequent correspondence from the Inspectors,
which they can reasonably presume that he received. Mr Turley has been found to be a
client of Ansbacher (see Chapter 23).

Mr John Murphy
Mr John Murphy, of 25 Sanderson Close London NW5 ITS England and also c/o J
Murphy & Sons Limited, Hiview House, Highgate Road London, is a businessman. The
Inspectors wished to interview Mr Murphy so as to establish whether he or any other
person could be considered a client of the Company under investigation by reason of
certain trusts established by Mr Murphy. The Inspectors also wished to investigate the
nature of the contact between Mr Murphy and/or the Murphy Group of Companies and
Ansbacher (under any of its names) so as to get a fuller understanding of the nature of the
business conducted by that company. Mr Murphy's solicitors in the course of
correspondence admitted that Mr Murphy established certain trusts as Settlor (not in
Cayman) and that these trusts did business with the Company under investigation.

A requirement to attend for interview was made on two occasions to Mr Murphy with an
indication that the interview would be held if requested in London to convenience Mr
Murphy. The solicitors for Mr Murphy, by letter of 10 October 2001, conveyed Mr
Murphy's refusal to attend.

Because of Mr Murphy's lack of co-operation, the Inspectors have been unable to

conclude whether or not he was a client of Ansbacher.

28.3 Inspectors' recommendation

In view, therefore, of the failure of the above persons and companies to co-operate with
them, the Inspectors issue a recommendation to the appropriate authorities that they
consider whether an application should be made for a disqualification order, pursuant to
Section 160(2)(e) of the Companies Act, 1990 in respect of each of the above-named
persons and in respect of each and every member of the boards of Guinness Mahon &
Company Limited, London and of Investec Bank (UK) Limited.
 PART VII

SUMMARY OF CONCLUSIONS
 CHAPTER 29

SUMMARY OF CONCLUSIONS

INDEX

Page

29.1 Ansbacher (Cayman) Limited 489

29.2 Mr Desmond Traynor 491

29.3 Mr John Furze 492

29.4 Mr John Collins 493

29.5 Guinness and Mahon (Ireland) Limited 494

29.6 Guinness Mahon and Company Limited, London 495

29.7 Investec Bank (UK) Limited 495

29.8 Henry Ansbacher Holdings plc 496

29.9 First National Bank of Southern Africa 496

29.10 CRH plc 496

29.11 Bank of Ireland Private Banking Limited 496

 Page
29.12 Mr Padraig Collery 497

29.13 Ms Joan Williams 498

29.14 Mr Sam Field-Corbett 498

29.15 Mr Jack Stakelum 499

29.16 IIB 499

29.17 Clients of Ansbacher (Cayman) Limited 500

29.18 Hamilton Ross Company Limited 500

29.19 The Central Bank of Ireland 502

29.20 Exchange Control 502

29.21 The Auditors of Guinness and Mahon (Ireland) Limited 502

29.22 Failure to co-operate with the Inspectors 503

SUMMARY OF CONCLUSIONS

29.1 Ansbacher (Cayman) Limited

The Inspectors investigated the affairs of Ansbacher in accordance with the terms of
reference set out by the Order of the High Court of 22 September 1999. In Chapters 2,3,4
and 5 of this Report, the Inspectors examine and define the nature and extent of
Ansbacher's Irish business (as defined by the Order), tracing the evolution of the
Company from its incorporation in 1971 to the winding down of the Irish business in the
mid 1990s. In these Chapters, based on the evidence before them, the Inspectors found
that:

1. The 'memorandum account' system was operated by Guinness and Mahon

and GMCT in a deliberately complex and secretive manner which concealed
the names of the clients involved while allowing them to lodge and withdraw
funds to and from accounts held nominally for GMCT.

2. Loans were obtained from Guinness and Mahon for GMCT clients on the
security of their GMCT deposit, while the existence of this deposit was
deliberately omitted from the loan agreement documentation and therefore the
general regulatory system of Guinness and Mahon where it would have been
seen by bank and Revenue auditors.

3. Ansbacher had established places of business within the State, being at first
the premises of Guinness and Mahon and later the premises of CRH plc.

4. Ansbacher knowingly breached Sections 352, 353, 355 and 357 of Part XI of
the Companies Act, 1963.
 5. Ansbacher carried on banking business in Ireland without holding a licence to
do so, which conclusion leads the Inspectors to further conclude that there is
evidence tending to show that Ansbacher breached Section 7 of the Central
Bank Act, 1971 (as amended).

The Inspectors found further that there was evidence tending to show that:

6. The discretionary trust structure as operated by GMCT in conjunction with

Guinness and Mahon - through its policy of concealing the true object of the
trust, the retention of control by the prime mover over the assets of the trust
and the access to the funds provided to the prime mover who could withdraw
funds in Dublin - amounted to a sham trust structure. There is also evidence
to show that the discretionary trust scheme facilitated widespread tax evasion.

7. That the affairs of Ansbacher were conducted with intent to defraud a creditor
of some of its clients, that is the Revenue authorities.

8. That Ansbacher may have committed a number of criminal offences, namely:

a) the common law offence of conspiracy (with, inter alia, some of its
clients) to defraud, and
b) the offence of knowingly aiding, abetting, assisting, inciting or inducing
another person to make or deliver knowingly or wilfully any incorrect
return, statements or accounts in connection with their tax contrary to the
provisions of the appropriate tax legislation, now consolidated in Sections
1056 and 1078(2) of the Taxes Consolidation Act, 1997.

9. That Ansbacher breached Section 5 of the Finances (Miscellaneous

Provisions) Act, 1968 by failing to deliver to the Revenue Commissioners a
statement in writing containing the particulars set out therein.
 10. That Ansbacher breached Sections 141 and 142 of the Corporation Tax Act,
1976.

11. That Ansbacher failed to pay Corporation Tax lawfully due.

12. That Ansbacher breached Section 31 of the Finance Act, 1974.

13. That Ansbacher failed to make deductions from payments to employees,

contrary to Section 126 of the Income Tax Act, 1967 (now Section 985 of the
Taxes Consolidation Act, 1997).

14. That Ansbacher may have been in breach of Section 10(a) of the Cayman
Islands Banks and Trust Companies Law, 1989 (as amended).

29.2 Mr Desmond Traynor

Chapter 7 examines the responsibility of Mr Desmond Traynor for the wrongdoing of
Ansbacher (Cayman) Limited. Based on the evidence before them, the Inspectors
conclude that there is evidence tending to show that:

1. Mr Traynor facilitated the operation of sham trusts on behalf of Ansbacher's

clients.

2. Mr Traynor facilitated the carrying on of a banking business by Ansbacher

and Hamilton Ross in Ireland without a licence.

3. Mr Traynor knowingly and wilfully permitted Ansbacher, while carrying on

business in Ireland, to breach Sections 352, 353, 355 and 357 of Part XI of the
Companies Act, 1963.
 4. Mr Traynor knowingly and wilfullly facilitated Ansbacher and Hamilton Ross
to conduct their affairs in Ireland in such a manner as to intentionally defraud
the Revenue authorities.

5. Mr Traynor improperly used subordinates in the unlawful activities of the

business of Ansbacher and Hamilton Ross.

6. Mr Traynor approved of and participated in the making of payments to Mr

Collery and Ms Williams without the deduction of the appropriate tax.

7. Mr Traynor facilitated Ansbacher and Hamilton Ross in the evasion of their

Corporation Tax liabilities.

8. Many of the aforementioned actions of Mr Traynor may constitute evidence

tending to show the commission of criminal offences.

29.3 Mr John Furze

Chapter 8 examines the responsibility of Mr John Furze for the wrongdoing of Ansbacher
(Cayman) Limited. Based on the evidence before them, the Inspectors conclude that there
is evidence to show that:

1. Mr Furze conspired with his fellow-director Mr Traynor to conduct

Ansbacher's affairs with intent to defraud the Irish Revenue Commissioners.
This conclusion may constitute evidence tending to show the commission of
criminal offences.

2. Mr Furze consented to or approved of the carrying on of an unlicensed

banking business by Ansbacher in Ireland.
 Mr Furze knowingly and wilfully permitted Ansbacher, while it was carrying
on business in Ireland, to breach Sections 352, 353, 355 and 357 of Part XI of
the Companies Act, 1963.

4. Mr Furze may have been in breach of Section 10(a) of the Cayman Islands
Banks and Trust Companies Law, 1989 (as amended).

29.4 Mr John Collins

Chapter 9 examines the responsibility of Mr John Collins for the wrongdoing of
Ansbacher (Cayman) Limited. Based on the evidence before them, the Inspectors
conclude that:

1. Mr Collins must take his share of the responsibility, as one of the three early
directors, for the consequences of management decisions made in its initial
years, and in particular for the decision to open and maintain the GMCT
accounts in Guinness and Mahon, which, the Inspectors have concluded, were
operated in such a way as to defraud the Irish Revenue Commissioners.

2. There is evidence tending to show that Mr Collins shares responsibility for

Ansbacher conducting unlicensed banking business in Ireland.

3. Mr Collins knowingly and wilfully permitted GMCT, while it was carrying on

business in Ireland, to breach Sections 352, 353, 355 and 357 of Part XI of the
Companies Act, 1963.

4. Mr Collins shares responsibility for Ansbacher's possible breach of Section

10(a) of the Cayman Islands Banks and Trust Companies Law, 1989 (as
amended).
29.5 Guinness and Mahon (Ireland) Limited ('Guinness and Mahon')
Chapter 10 examines the responsibility of Guinness and Mahon, in the period 1971 to
1984, for the wrongdoing of Ansbacher (Cayman) Limited and Chapter 14 examines the
assistance provided by Guinness and Mahon, during the period 1971 to 1991, to the
Cayman Company. Based on the evidence before them, the Inspectors conclude that
there is evidence to show that, from 1971 to 1991:

1. Guinness and Mahon conspired with Ansbacher to defraud a creditor of

Ansbacher's clients, namely the Irish Revenue Commissioners, and that there
is therefore evidence tending to show that Guinness and Mahon may have
committed the offence of conspiracy to defraud contrary to common law.

2. Guinness and Mahon may have committed the offence of knowingly aiding,
abetting, assisting, inciting or inducing another person to make or deliver
knowingly or wilfully any incorrect return, statements or accounts in
connection with their tax contrary to the provisions of the appropriate tax
legislation, now consolidated in Sections 1056 and 1078(2) of the Taxes
Consolidation Act, 1997.

3. Guinness and Mahon aided and abetted Ansbacher to carry on a banking

business in Ireland without a licence to do so, as required by Section 7 of the
Central Bank Act, 1971 (as amended).

4. Guinness and Mahon was an accessory to the carrying on of Ansbacher's

unlicensed banking business within the State, and that there is therefore
evidence tending to show that Guinness and Mahon may have committed an
offence of carrying on an unlicensed banking business in Ireland contrary to
Section 7 of the Central Bank Act, 1971 (as amended).
29.6 Guinness Mahon & Company Limited ('Guinness Mahon London')
Chapter 11 examines the responsibility of Guinness Mahon London for the wrongdoing
of Ansbacher (Cayman) Ltd. Based on the evidence before them, the Inspectors conclude
that:

1. There is evidence tending to show that Guinness Mahon London knowingly

assisted Ansbacher in conducting its affairs so as to defraud a creditor of some
of its clients, namely the Revenue Commissioners, and that there is therefore
evidence tending to show that Guinness Mahon London may have committed
the offence of conspiracy to defraud contrary to common law.

2. There is evidence tending to show that Guinness Mahon London may have
committed the offence of knowingly aiding, abetting, assisting, inciting or
inducing another person to make or deliver knowingly or wilfully any
incorrect return, statements or accounts in connection with their tax contrary
to the provisions of the appropriate tax legislation, now consolidated in
Sections 1056 and 1078(2) of the Taxes Consolidation Act, 1997.

3. Guinness Mahon London failed to co-operate with the Inspectors as required

by Section 10(2) of the Companies Act, 1990 and the Inspectors therefore
recommend that consideration should be given by the appropriate authorities
as to whether an application should be made for disqualification orders in
respect of the directors of Guinness Mahon London, pursuant to Section
160(2)(e) of the Companies Act, 1990.

29.7 Investec Bank (UK) Limited

The Inspectors conclude that Investec Bank (UK) Limited, as the current owners of
Guinness Mahon London, failed to co-operate with them as required by Section 10(2) of
the Companies Act, 1990 and the Inspectors therefore recommend that consideration
should be given by the appropriate authorities as to whether an application should be
made for disqualification orders in respect of the directors of Investec Bank (UK)
Limited, pursuant to Section 160(2)(e) of the Companies Act, 1990.

29.8 Henry Ansbacher Holdings plc

Chapter 12 examines the responsibility of Henry Ansbacher Holdings plc for the
wrongdoing of Ansbacher (Cayman) Ltd. Based on the evidence before them, the
Inspectors conclude that Henry Ansbacher Holdings plc bears responsibility for the
continuation of the carrying on of unlicensed banking business in Ireland by Ansbacher
after October 1991.

29.9 First National Bank of Southern Africa ('FNBSA')

Chapter 13 examines the involvement of FNBSA in the wrongdoing of Ansbacher
(Cayman) Ltd. Based on the evidence before them, the Inspectors conclude that, taking
into account the fact that all of Ansbacher's Irish business was wound down by FNBSA
between the time that they acquired the Company and before the commencement of the
McCracken Tribunal, it would be unfair to categorise FNBSA as having equal
responsibility with others for the conduct of Ansbacher's unlicensed banking business.

29.10 CRH plc

Chapter 14 examines the assistance provided by CRH to Ansbacher (Cayman) Ltd.
Based on the evidence before them, the Inspectors conclude that:

1. CRH provided assistance to Ansbacher (Cayman) Ltd in the carrying out of its
business in Ireland. This assistance cannot be said to have been given
knowingly, having regard to the legal principles concerning corporate
knowledge, but it is a matter for which CRH must bear some responsibility.

29.11 Bank of Ireland Private Banking Limited ('BOIPB')

Chapter 16 examines the assistance provided by BOIPB to Ansbacher (Cayman) Ltd.
Based on the evidence before them, the Inspectors conclude that:
 1. By their failure to raise questions about the residential status of the beneficial
owners of the relevant accounts, BOUPB assisted Ansbacher (perhaps
unwittingly) in concealing the fact that Irish residents were the owners of the
funds in the relevant accounts, and thus - again, perhaps unwittingly -
assisted Ansbacher to conduct Ansbacher's business so as to defraud a
creditor of Ansbacher's clients, namely the Revenue Commissioners.

29.12 Mr Padraig Collery

Chapter 17 examines the assistance provided by Mr Padraig Collery to Ansbacher
(Cayman) Ltd. Based on the evidence before them, the Inspectors conclude that there is
evidence to show that:

1. From 1989 to May 1994, Mr Collery assisted Ansbacher in carrying on an

unlicensed banking business, in breaching Sections 352, 353, 355 and 357 of
Part XI of the Companies Act, 1963, in evading tax due on its own activities
and in assisting others to evade tax.

2. From 1989 to May 1994, Mr Collery knowingly assisted Ansbacher in

conducting its affairs in the State so as to defraud a creditor of some of its
clients, namely the Revenue Commissioners.

3. From late 1992/early 1993 to 1995, Mr Collery also knowingly assisted

Hamilton Ross in operating its unlicensed banking business in Ireland, in its
breaches of Sections 352, 353, 355 and 357 of Part XI of the Companies Act,
1963, in evading tax due on its own activities and in carrying on business in
the State in such a manner as to defraud a creditor of some of its clients,
namely the Revenue Commissioners.

4. From 1989 to 1995, Mr Collery may have committed:

a) the common law offence of conspiracy to defraud, and
 b) the offence of knowingly aiding, abetting, assisting, inciting or inducing
another person to make or deliver knowingly or wilfully any incorrect
return, statements or accounts in connection with their tax contrary to the
provision of the appropriate tax legislation now consolidated in Sections
1056 and 1078(2) of the Taxes Consolidation Act, 1997.

29.13 Ms Joan Williams

Chapter 18 examines the assistance provided by Ms Joan Williams to Ansbacher
(Cayman) Ltd. Based on the evidence before them, the Inspectors conclude that:

1. Ms Joan Williams would have acquired some level of understanding that the
Ansbacher scheme had a tax evasion dimension. However, her position
within the hierarchy of the firms in which she worked and the complicated
nature of the issues involved would have effectively rendered her powerless to
oppose Mr Traynor's course of action.

29.14 Mr Sam Field-Corbett

Chapter 19 examines the assistance provided by Mr Sam Field-Corbett to Ansbacher
(Cayman) Ltd. Based on the evidence before them, the Inspectors conclude that there is
evidence to show that:

1. From 1994 to 1997, Mr Sam Field-Corbett may have acted in breach of

Section 7 of the Central Bank Act, 1971 (as amended), by aiding and abetting
in the manner envisaged by Section 8 of the Accessories and Abettors Act,
1861 and/or Section 7(1) of the Criminal Law Act, 1997, thereby rendering
himself responsible as a principal offender.

2. Mr Field-Corbett assisted Hamilton Ross in breaching Section 355(b) of Part

XI of the Companies Act, 1963.
29.15 Mr Jack Stakelum
Chapter 20 examines the assistance provided by Mr Jack Stakelum to Ansbacher
(Cayman) Ltd. Based on the evidence before them, the Inspectors conclude that:

1. Mr Jack Stakelum assisted Ansbacher in the carrying out of its Irish business,
but that this assistance was unknowing.

2. There is evidence tending to show that Mr Stakelum, in undertaking

knowingly his deposit taking activities, may have committed a number of
criminal offences as follows:
a) The common law offence of conspiracy to defraud;
b) The offence of knowingly aiding, abetting, assisting, inciting or inducing
another person to make or deliver knowingly or wilfully any incorrect
return, statement or account in connection with their tax, contrary to the
provisions of the relevant tax legislation now consolidated in Sections
1056 and 1078(2) of the Taxes Consolidation Act, 1997;
c) That, in accepting deposits from and effecting withdrawals on behalf of
his clients, Mr Stakelum may have carried on a banking business within
the meaning of the provisions of the Central Bank Act, 1971 (as amended)
and 1989, and that he did so without the requisite licence.

29.16 IIB
Chapter 21 examines the assistance provided by IIB to Ansbacher (Cayman) Ltd. Based
on the evidence before them, the Inspectors conclude that:

1. IIB provided assistance to Ansbacher between 1991 and 1997, which enabled
Ansbacher to continue its operations in the State. There was a substantial
body of knowledge within IIB concerning the nature of the Ansbacher
operations, but this knowledge was not concentrated in such a way as to
enable corporate knowledge to be imputed to IIB.
 2. IIB provided assistance to Hamilton Ross between 1991 and 1997, which
enabled Hamilton Ross to continue its operations in the State. There was a
substantial body of knowledge within IIB concerning the nature of the
Hamilton Ross operations, but this knowledge was not concentrated in such a
way as to enable corporate knowledge to be imputed to IIB.

29.17 Clients of Ansbacher (Cayman) Limited

The Inspectors, having identified a total of 190 clients of Ansbacher (details of whom
appear in Chapters 22 and 23), conclude that this constitutes the larger proportion of the
clients that they are required to identify. Reports of a larger number of clients appear to
be based on counting both the individuals beneficially entitled to the funds and the
corporate entities used by them.

29.18 Hamilton Ross Company Limited ('Hamilton Ross')

Chapter 24 examines Hamilton Ross as a related matter. Based on the evidence before
them, the Inspectors conclude that, between 1992 and early 1997:

1. Hamilton Ross had established places of business within the State, being at
first the premises of CRH plc and later the premises at Inns Court, Winetavern
Street, Dublin.

2. Hamilton Ross knowingly breached Sections 352, 353, 355 and 357 of Part XI
of the Companies Act, 1963.

3. Hamilton Ross carried on banking business in Ireland without holding a

licence to do so, which leads the Inspectors to further conclude that there is
evidence tending to show that Hamilton Ross breached Section 7 of the
Central Bank Act, 1971 (as amended).
The Inspectors further conclude that there is evidence tending to show that:

4. The affairs of Hamilton Ross were conducted with intent to defraud creditors
of some of its clients, that is the Revenue authorities.

5. Hamilton Ross was guilty of a number of criminal offences, namely:

a) the common law offence of conspiracy (with, inter alia, their clients) to
defraud, and
b) the offence of knowingly aiding, abetting, assisting, inciting or inducing
another person to make or deliver knowingly or wilfully any incorrect
return, statement or account in connection with their tax, contrary to the
provisions of the relevant tax legislation now consolidated in Sections
1056 and 1078(2) of the Taxes Consolidation Act, 1997.

6. Hamilton Ross breached Sections 141 and 142 of the Corporation Tax Act,
1976.

7. Hamilton Ross failed to pay Corporation tax lawfully due.

8. Hamilton Ross breached Section 31 of the Finance Act, 1974.

9. Hamilton Ross failed to make deductions from payments to employees,

contrary to Section 126 of the Income Tax Act, 1967 (now Section 985 of the
Taxes Consolidation Act, 1997).
29.19 The Central Bank of Ireland
Chapter 25 examines the Central Bank as a related matter. Based on the evidence before
them, the Inspectors conclude that:

1. A combination of the misleading information furnished by Guinness and

Mahon and in particular by Mr Traynor and a failure on the part of the Bank
to test, appraise and gather the information available to it resulted in the true
nature of Ansbacher's activities going undetected for longer than ought to
have been the case.

29.20 Exchange Control

Chapter 26 examines the issue of exchange control as a related matter. Based on the
evidence before them, the Inspectors conclude that responsibility for exchange control
issues could not be assigned to the individual clients of Ansbacher. In so far as any
exchange control issues pertained, Guinness and Mahon and IIB would have been the
responsible bodies. However, these matters fall outside the scope of this Inquiry.

29.21 The Auditors of Guinness and Mahon (Ireland) Limited

Chapter 27 examines the role of the auditors of Guinness and Mahon as a related matter.
Based on the evidence before them, the Inspectors conclude that it is a matter for the
appropriate regulatory authorities to consider whether the fact that different audit firms
did not identify the evidence of unlicensed banking business of GMCT over many years
highlights any deficiency in either the general practice relating to auditing of the banking
sector, and/or, if appropriate, in the manner in which the audit work was completed.
29.22 Failure to co-operate with the Inspectors
Chapter 28 examines, as a related matter, the issue of those who failed to assist the
Inspectors in this Inquiry. The Inspectors conclude that the following persons failed to
co-operate as required under Section 10(2) of the Companies Act, 1990 and they issue a
recommendation to the appropriate authorities that they consider whether an application
should be made for a disqualification order, pursuant to Section 160(2)(e) of the
Companies Act, 1990, in respect of each of the following persons:

1. Mr Stephen Enoch
2. Mr Bernard Etzin
3. Mrs Nora Shanahan
4. Mr Michael J Shanley
5. Mr Martin Turley
6. Mr John Murphy
7. The individual members of the board of Guinness Mahon & Company Ltd,
London
8. The individual members of the board of Investec Bank (UK) Limited.