Published November 02, 2012
DUBLIN – Bankrupt tycoon Sean Quinn, once Ireland's richest man and a celebrated self-made billionaire, was sent to jail for nine weeks Friday after a judge found him guilty of stripping foreign assets from his crumbling business empire in violation of court orders.
Quinn, who has already lost control of his Irish-based businesses in a titanic legal fight with the former Anglo Irish Bank, was ruled in contempt of court for shifting ownership of his properties throughout Europe to friends and business fronts.
As police were about to lead him off to jail, Quinn offered an angry and defiant apology, insisting the billions he owed was a minor matter compared to his family's loss of wealth, status and control of still-viable businesses.
"Did I make mistakes in the last two years? ... Yes, I did. Do I apologize here now in public for that? Yes, I do," he said. "Is it small fry compared to the overall assault that has been launched on us, and taking over our companies and destroying them? It's an absolute disaster."
Irish courts in mid-2011 had ordered Quinn to stop such asset-stripping immediately because the state-owned Anglo bank was entitled to those assets to offset unpaid loans totaling €2.8 billion ($3.65 billion).
But Anglo investigators demonstrated that Quinn had continued those efforts and falsely dated documents to try to conceal court-defying subterfuge involving properties in Russia, Ukraine, Turkey, India and other countries worth an estimated $430 million.
Quinn, 65, could have appealed High Court Justice Elizabeth Dunne's sentence to the Irish Supreme Court. But after a lunch break spent in discussion with lawyers and his eldest son, Quinn decided to go to jail immediately at Dublin's overcrowded Mountjoy Prison. He is scheduled for release Jan. 4.
Quinn's spectacular rise and fall provides the defining personal story of Ireland's 1990s rise as a property-obsessed Celtic Tiger — and its stunning collapse in 2008 when that Anglo-driven construction boom turned to bust.
Quinn, son of a Northern Ireland border farmer, started his first construction-materials business in 1973 with a 100-pound ($160) loan. Throughout the 1990s and 2000s canny acquisitions allowed his empire to grow from cement to hotels, insurance to bottlemaking, his name adorning trucks and office blocks across Ireland.
He built a fiercely loyal following in his native borderland, a traditionally jobs-poor region, where he based most of his enterprises. Forbes in 2008 listed him as the 164th richest man in the world.
But fatefully and inexplicably, he bet his family's riches on the continued runaway success of Anglo, the most daring of Ireland's property financiers, whose shares rose tenfold during the boom years. Worse, as Anglo's share price reversed course in the run-up to the global credit crisis in 2008, he kept doubling down, borrowing billions from Anglo itself to become the bank's top owner with up to 28 percent of its shares.
Ireland nationalized Anglo in early 2010, rendering Quinn's stock worthless and leaving taxpayers with a bill expected to exceed €25 billion ($33 billion), including Quinn's loan defaults.
Quinn and his family contend in a separate, continuing lawsuit that Anglo's loans to them were largely illegal because the bank didn't disclose the true scale of its troubles, so they shouldn't have to repay them.
Lawyers for the former Anglo, now reorganized as a toxic debt-management agency called the Irish Bank Resolution Corp., insisted all Quinn assets, whether at home or abroad, must be seized to repay a bill owed ultimately to Irish taxpayers. Irish courts agreed.
During court proceedings over the past year, Quinn and his children were caught concealing the last-minute shifting of ownership for properties to foreign-based fronts and allies, including by making a secret $500,000 payment to a Ukrainian businesswoman to receive legal control of assets that included a shopping mall. Anglo had been due to take control of those properties the next day.
The judge, Dunne, ruled earlier this year that Quinn's defense was incredible and evasive. She postponed his jailing to Friday in hopes his family would reverse the asset-stripping moves in compliance with more than 30 court orders. She ruled Friday this had failed to happen and Quinn "has only himself to blame."
In June she ordered Quinn's son, Sean Jr., and his nephew Peter jailed for three months in punishment for their role in the Ukrainian and other asset-stripping. The son served his sentence but the nephew fled to neighboring Northern Ireland, where border communities staged several public rallies in support of the Quinns.