'SCAM' BANK COULD FACE pounds 85M LOSSES; Ex-First Trust boss on fraud rap.

Byline: ALAN ERWIN 

A BANK at the centre of a major investigation into alleged fraud and money laundering could be exposed to losses of pounds 85million, a court heard yesterday.

The worst-case scenario was revealed as bail was granted to a former branch manager accused of a massive scam involving bogus loan applications and the proceeds of tax evasion and fuel smuggling.

Peter Creegan, of Tullydonnell Road, Silverbridge, Co Armagh denies 26 charges including multiple counts of fraud by false representation and concealing criminal property.

The 43-year-old, who ran the First Trust in Newry, Co Down, until his dismissal in March, was charged with financial adviser Damien Mallon, 52, of Drumconwell Road, Armagh. Prosecutors told the court a third suspect has still to be arrested.

Crown counsel Philip Henry said the inquiry was launched after the bank carried out an internal review and lodged a complaint. One alleged offence involved fabricated loans where the applicants either did not exist or knew nothing about the request.

Money was released and used to buy property which was put into company names, it was claimed. Creegan was said to be able to lend up to pounds 300,000 without authorisation.

Another part of the alleged racket centred on a plot between Creegan and another professional individual to launder money. It's claimed accounts with both the First Trust and Halifax - with whom Mallon had an agency - were used to distribute the proceeds of tax evasion and fuel smuggling.

Mr Henry said the bank identified 116 high-risk loans authorised by or associated with Creegan. Creegan denied any wrongdoing at interview, while Mallon - who is accused of fraud and converting criminal property between 2002 and this year - was said to have admitted his role.

A defence barrister said Creegan has a clear record and is held in high esteem by "hundreds if not thousands of people" but was now financially ruined.

Those ready to put up substantial cash sureties to secure his release included a Newry hotelier, the court heard.

Philip Magee SC said his client denied any suggestion that he improved financial profiles in order to have loans sanctioned.

He also argued that nearly all of the money under scrutiny was secured against property still with equity as it was bought before the market slumped.

The barrister claimed banks had been "chucking money" at people in previous years and were now, in tougher times, going through the books to identify high-risk transactions.

Granting bail, Mr Justice Hart pointed out that inquiries were at an early stage and may take a lot longer to complete.

He ordered Creegan must lodge pounds 10,000 or his house deeds before his release. Cash sureties of pounds 40,000 and a ban on contacting customers at the First Trust in Newry were also imposed.

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CLAIMS Creegan