David Drumm’s wife confirms he gave her $1.2 million

Lorraine Drumm, wife of former Anglo Irish Bank chief executive David Drumm, told a US court she didn't know that her husband had transferred almost all of his cash to her from late 2008.

Mrs Drumm told the court that she had no bank accounts in her sole name before 2008 and confirmed that the source of $1.2 million (€876,000) transferred to her was her husband’s earnings from Anglo.

Speaking on the final day of testimony at her husband’s bankruptcy trial in Boston, Mrs Drumm said she didn’t know whether her husband or her marriage would survive the banking crisis and that she wanted money of her own for herself and her children.

“I had decided that I had a number in my my head that I was reasonably comfortable with should something go wrong,” she said.

Asked by attorney Ken Leonetti, for the former Anglo, now Irish Bank Resolution Corporation, if she knew how much Mr Drumm had transferred in cash and property in total, Mrs Drumm said she thought that it was close to €1 million. Mr Leonetti asked, if he told her it was about €2 million in total would that be about right. She replied that it would.

IBRC and Mr Drumm's bankruptcy trustee brought this legal action in the Massachusetts Bankruptcy Court to deny the former banker a discharge from bankruptcy and a fresh financial start.

Property

They claim he failed to disclose transfers of $1.2 million in cash as well as interests in property to his wife Lorraine, and that he made false oaths in his sworn bankruptcy statements in relation to those transfers.

Mr Drumm, who owes the bank €10.5 million, claims he did not know he had to include cash transfers to his wife in his October 2010 bankruptcy filings until a meeting with his creditors in April 2011.

Mrs Drumm said the couple moved back to Boston after he resigned from Anglo in December 2008 because he felt he had a “good shot” at starting a business there given that they had lived there for six years and he had “maintained good friendships with his old clients.”

She said she gave Mr Drumm $250,000 to invest in his business to secure a US “E-2” investor visa as a loan in 2009 because she wanted the money back. She admitted that there was no documentation to show that it was a loan. “We didn’t need documentation,” she said.

Mr Leonetti asked Mrs Drumm whether in their previous 17 years of marriage they had described a previous exchange of money as a loan. “No, but our life had changed,” she said.

Stress of moving

After the stress of moving to the US, Mrs Drumm said that in late 2009 she decided to buy a house as she wanted her children “to have somewhere to call home”.

She insisted that after buying a $2 million house in Wellesley, a town near Boston, in January 2010 that her husband sign a separate property agreement stating that a $831,000 cash deposit used to buy the house was hers and would be returned to her when it was sold.

Mrs Drumm said that she was putting a sizeable amount of her money into the property and that she wanted it back.

Mr Leonetti asked her why she put the property agreement with her husband on their home in writing but not the loan for his business. “It was almost the entirety of my money, my nest egg for my girls,” she said.

Bank accounts

“This was almost cleaning out my bank accounts doing something like this. I wanted it reflected that if the house was sold I would want the money to come back to me.”

The bank’s attorney later asked Mr Drumm if both she and her husband lived at the Wellesley house. “My husband lives away for a lot of the time – it is predominantly mine and my girls’ house,” she said.

“Do you both still reside there?” asked Mr Leonetti. “At times,” replied Mrs Drumm.

She told the court she bought the house using her maiden name, Lorraine M Farrell, for privacy reasons to avoid alerting media.

“Real estate transactions are a matter of public record. If my name appeared on it the first thing that would happen is that the media would be on my doorstep yet again I was making sure that I could have as much privacy.”

Media attention

Asked by Mr Drumm’s lawyer David Mack if she had received media attention outside the court yesterday, she told the court that she had “several times” and that she had “got ambushed when I tried to go out and get a sandwich”.

Yesterday marked the end of direct testimony in the trial. Judge Frank Bailey has scheduled closing arguments from both sides for June 4th.