Former currency trader John Rusnak was sentenced to seven-and-a-half years in prison by a Baltimore court yesterday for hiding more than $691.2 million (€648.4) in losses at AIB-owned Allfirst Bank. He was also ordered to pay restitution at the rate of $1,000 a month for five years after his release.

"I am very sorry for what I have done," Rusnak said in court. "I accept full responsibility for my actions. I am going to accept the sentence without any bitterness, and try to make restitution and hope that it will lead me to some redemption later in life."

In a plea bargain in October Rusnak agreed to plead guilty to a single count of bank fraud and accept a sentence of 90 months without parole. A further six charges, including bank fraud and making false entries, were dropped.

After his release from prison, Rusnak will remain on five years' probation. He was barred by US District Court Judge William Nickerson from working at a bank or other federally insured financial institutions.

Judge Nickerson said he believed it was the harshest sentence ever imposed in a fraud case in the Baltimore courthouse.

Mr Rusnak will begin to serve his sentence on February 18th at Fort Dix prison in New Jersey, where he will undergo treatment for alcohol and substance abuse and gambling.

Mr Rusnak's problems with substance abuse and gambling emerged in the judge's comments on a probation report to which he referred in the hour-long hearing but the contents of which were not made public.

His lawyer, Mr David Irwin, said the prison's location was near enough for regular visits by Mr Rusnak's wife, Linda, and his two children from Baltimore, and by his parents who live in New Jersey.

It would also make it convenient for further co-operation with federal authorities in any ongoing investigations into how major banks dealt with Mr Rusnak's losing bets on the currency markets.

In a surprise intervention in the court, Ms Karen Weiss, senior vice-president in healthcare banking at Allfirst, complained that the sentence was not harsh enough.

"This is very difficult for me, John Rusnak doesn't know me at all," she said.

"I'm not sure when you say that you're sorry. I think you're sorry that you were caught. There is no sentence that can be imposed that will help you to understand what we suffered.

"What John Rusnak did at the bank will have an impact on all of us who are still working there. We live that sentence every day, our clients, our families, our co-workers, every single day. We all suffered considerable financial impact as well because we were not paid our bonuses. The bank took the loss, the losses you covered up."

The fraud threw the Baltimore bank, formerly known as First National bank of Maryland, into turmoil, and contributed to a decision by AIB in September to merge Allfirst with M&T Bank in Buffalo, for $3.1 billion.

The company said this week that it was cutting 1,132 jobs, more than 20 per cent of Allfirst's workforce in Maryland and adjoining states as part of the merger, which will be completed in March. In Baltimore, 657 jobs will be lost.

US attorney Mr Thomas DiBiagio told reporters afterwards that this was "most likely the end of the case" although there were some "loose ends" and those questions would be addressed within six months. He did not go into detail.

The fact that Rusnak was not sent to an open prison underlined the seriousness of white-collar crime, Mr DiBiagio said. "This was a serious white-collar crime. He is going to prison with the bank robbers and the drug dealers."

He said that he did not know that Ms Weiss was going to testify but noted that "many people think that these cases do not harm anyone. It is actually harming everyone and it's not the bank who takes the loss. The employees take the loss." Her evidence, however, did not change the outcome of the case, which was determined in the plea bargain.

Rusnak was flanked in court by Mr Irwin and his spiritual adviser, Pastor Joe Ehrmann of the non-denominational Grace Fellowship Church in Timonium.

Mrs Rusnak did not appear in court. "His wife is very supportive of him," Mr Irwin told the judge. "He asked her to not brave the crush of the media. He wanted to respect her. She's not here, but she's here in spirit."

Afterwards Mr Irwin said that because of snow in Baltimore that morning the children had been kept home from school.

Rusnak, who conducted the fraud over five years until it was discovered in February 2002, had been liable to a maximum sentence of almost 30 years in prison and a $1 million fine.

He did not embezzle any of the lost money but claimed bonus and salary for fraudulently claiming he was making money for the bank between 1997 and 2002. He was also lavishly entertained by salesmen from the banks with which he dealt. This involved trips to Las Vegas, the Super Bowl finals, and to European destinations.

Mr Boy Ray, Rusnak's direct supervisor, who was fired over the scandal, was in court to hear the sentencing.