UPDATE 1-Former Anglo Irish head faces more charges

Fri Dec 21, 2012 8:39am EST

* Ex-CEO FitzPatrick faces 12 new charges over hidden loans

* Due to stand trial next year over separate fraud charges

* Turned bank into market darling before its collapse

By Sarah O'Connor

DUBLIN, Dec 21 (Reuters) - Former Anglo Irish Bank head Sean FitzPatrick was arrested on Friday to face more charges linked to Ireland's most expensive bank failure, this time related to billions of euros of loans he kept auditors in the dark over.

FitzPatrick, the highest-profile banker to be charged in connection with Ireland's financial meltdown, has been free on bail since he was charged in July on 16 counts related to Anglo's collapse. He is due to stand trial next year.

He was arrested for a third time on Friday and brought to court in police custody to face 12 further charges of making "misleading, false or deceptive" statements to the company's auditors Ernst & Young between 2002 and 2007.

The charges relate to loans worth 84 million euros ($112 million) FitzPatrick, 64, received from Anglo during his time in charge. He resigned in late 2008 after admitting he repeatedly misled shareholders for years over the issue.

Shareholders whose investment was wiped out after the bank was nationalised in 2009 were also misled over loans to other directors. The court was told that in 2007 FitzPatrick had made arrangements to temporarily reduce the balance of his and fellow directors' loans by 139.8 million euros.

The former multi-millionaire banker invested the loaned money in assets ranging from shares in Anglo to financing films. He was declared bankrupt two and a half years ago.

FitzPatrick, who was Anglo's chief executive during its rapid rise and chairman during its stunning fall, stared straight ahead in court, saying nothing as each charge was read.

He made no comment when presented with the charges earlier by police, the court heard. He was granted bail and told to appear again on March 1 when evidence will be presented.

FitzPatrick could technically face up to five years in prison per charge if found guilty, although it is more likely he would receive one five-year sentence overall even if found guilty of more than one charge.

He could also face a fine of up to 12,697 euros per charge.

Ireland's Office of the Director of Corporate Enforcement (ODCE) and the police have been investigating Anglo's practices for almost four years, including loans given to a group of investors, referred to by local media as the "golden circle", as well as whether deposits were used to mask large withdrawals.

Anglo's collapse, seen as emblematic of the casino-style lending practices that obliterated the local banking sector and pushed Ireland into an 85 billion euro EU-IMF bailout, is expected to cost the Irish state at least 25 billion euros.

Ex-Anglo Finance Director Willie McAteer and managing director for Ireland Pat Whelan will also stand trial over fraud charges next year.

FitzPatrick's latest arrest comes weeks after the company charged with winding down Anglo's loan book announced it was taking legal action against the bank's former auditors, Ernst & Young.

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