The Serious Fraud Office (SFO) has confirmed it has launched an investigation into an alleged fraud on the Corporate Banking Department of Allied Irish Banks Plc, centring on a series of loans for the purchase of a number of UK investment properties.
The SFO revealed that between 2003 and 2007 Allied Irish Bank (AIB) provided loans for the purchase of a number of UK investment properties to companies controlled by an individual who is now the main suspect in its investigation. Following an internal review by AIB on this portfolio of properties, it became apparent that the guarantees of certain lease payments on these properties by an investment grade counterparty were fraudulent. The alleged fraud involved borrower companies creating 'overriding' leases involving the investment grade counterparty. These leases were generally for longe...
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