Ansbacher Cayman Report Appendix Volume 9

8/14/2019 Ansbacher Cayman Report Appendix Volume 9

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Record Number: 1999 /163 Cos

THE HIGH COURTI N T H E M AT T E R O FTH E C OM PA NIE S A CTS 1 963 to 19 90

AND IN THE MATTER OF PART I I OF THECOMPANIES ACT 1990 AND SECTIONS 8 AND 17

A N D I N T H E M AT T E R O F A N S B A C H E R ( C AY M A N ) L I M I T E D(formerly G U I N N E S S M A H O N C AY M A N T R U S T L I M I T E D ,

A N S B A C H E R L I M I T E Dan d C AY M A N I N T E R N AT I O N A L B A N K A N D T R U S T C O M PA N Y

LIMITED)

R E P O R T O F T H E I N S P E C T O R S

A P P O I N T E D T O E N Q U I R E I N TO TH E

A F F A I R S OF A N S B A C H E R ( C A Y M A N )

L I M I T E D

Published by Order of the Court made on 24 June 2002

V O L U M E [ 9 ] : A P P E N D I X X V ( 8 1 ) TO X V ( 9 5 )


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ISBN 0-7557-1355-9

Govern ment of Ireland 2002


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Appendix XV (81) Ms Susan Sheridan Mack

1. Evidence relied upon by the Inspectors in arriving at the conclusion relating to MsSusan Sheridan Mack.

a) Letterof 19 May 1992 - JD Traynor to Ansbacher Limited.

b) Letterof 14 December 1992 - Hamilton Ross & Co to IIB.

c) Letter of 4 March 1993 - JD Traynor to Susan Sheridan Mack.

d) Letter of 27 January 1994 - Hamilton Ross & Co to IIB.

e) Letterof 1 February 1994 - JD Traynor to Susan Sheridan M ack.

f) Letter of 25 October 1994 - Hamilton Ross & Co to IIB.

g) IIB statement re Hamilton Ross & Coof 31 March 1994.

h) Letterof 10 March 1997 - Hamilton Ross & Co to IIB.

i) Letter of 28 January 2002 - Gibbs & McCurley to Inspectors.


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Appendix XV (81) ( l) (a )


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Tfc7M14


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Appendix XV (81) (1) (b)


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Please reply to:42 Fitzwilliam Square,Dublin 2TH.-76JWV7S3065BUB 612035

PO Boz 887, Grand Cayman. tWephooenKU) WW 3 Telex: CP

RustoiBo! (Mm949-7946 ON) 949-3267

14th December, 1992. .Ronan Redmond, E s q . ,Corpora te Services ,Ir is h Intercontinental Bank Lim ited,91 Merrion Square,

Dublin 2

Dear Ronan,Iconfirmhaving requ este d you th is morning to open a new ..

U.S. Dollar Account in thaname of Hamilton Ross Co. L im ite dRef.'A/A56 and you hava allocated the number 03/39317/01 to

th is Account . We w i l l be having a t rans fer made sho r t lyvia KredietbankNew York for th is Account and w il l advise youof the amount when we know the funds are en r o u te .

Could you a ls o please arr an ge t o open two more Dep osit Accountsin the name of Hamilton Ross Co. lim ite d - U.S. D oll ar s -with ref ere nc es A/A57 and A/A58. Two Dep osits are due to

mature on 4th January and at maturi ty we will be makingarrangements to have them trans ferre d via Kradietbank New Yorkto you. for c re d it to these ' two new Accounts. In duecoursepleas e advise the numbers al l oc ate d and we w ill of course le tyou know the amounts'being tran sfer red when we have beenadv i sed .

Yours sincerely

F o r Ha mi l t o n Ro s s Co . L i mi t e d


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Appendix XV (81) (1) (c)


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Mrs Susan Sheridan Mack,5959 Bayview Circle NorthGulfportFlorida 33707USA

4th March, 1993.

Dear Mrs. MackAs requested I have pleasure in enclosing herewith twocheques, each in the sum of $4000 payable to yourself.

Kind regards

Yours sincerely

J.D. TRAYNOR


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/ N

f . 'Vwx 5*

B o n a M a o o d t K tvCorpora^*- Ja rv lO M ; * 'I ^ A ^ n t j r o o B t i i ^ ^ Vf iuA Limit**,--

DgatsSSj^

-.1 " 27t h ffaoaacy, 1994

' - i

Dear Ronan,Daar-JUman,-^ fcarawlth 1 .8 . * ^

* s^ ie a* C ou ld yo n p l a a s a t i & a a g s t o 1 s t a s h av a f o r o o l l a o t l o n . t ta ie * ^1O.8 . D oll ar ehaq oaa aae h pay ablavt tf KRS.SOSAW B aMfm OM amand M d i l a t b a staoa' of 'D S3 ,000 .00.P laaaa dabi t a l^ thraaO to ' - f ta id l t io1 osi n' .S. Hollar AccountMo.03/39273/81.

Toura ia lnca ra l,y ^r c ! V V' . r . > v .. >.


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Appendix XV (84) (1) (d)


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23203 MARS EI

_ TO.- GUINNESS MAHON CAYMAN TRUSTr FR OM * 6UINNES8+MAH0N LTD. DUBLINr*TEi 28/2/83

AT7i- MIKE'SHIELDS

ALEX MAJOR US'bLRS' LOANS'.GUINNESS MAHON CAYMAN TRUST US DLR8 DEPOSITS

WE WISH TO ADVi8E THAT THE ABOVE ACCOUNTS HEREON THE 23/2/83RENEWED FORA.r,URTffER THREE MONTHS TO 26/3/83. THE EFFECTIVERATE ON THE LOAN A/C'SIS NOU tlX PER ANNUM I.E. 2t OVER COSTOF THREE MONTtf"$VNDSt THE RATE 8EIN6 ALLOWEDON THE DEPOSIT A/C'SIS 10 i/4X PER&NNUM I.E. i 1/tZ OVER COST OF THREE MONTH FUNDS.

.THE INTEREST .EARNED ON THE DEPOSIT A/C'S OF US DLRS 23,876-52WILL BETRANSFERRED TO YOUR7 DAY8 NOTICE DEPOSIT A/CAT GUINNESS 'MAHON A CO. , LONDON WHEN WE RECEIVE FROM MR. MAJOR THE INTERESTDUE ON HIS LOAN.A/C'S. HOPEFULLY THIS REMITTANCEOF US DLRS27. ,%30-87 WILL BE .RECEIVED WITHIN THE NEXT FEW DAYS. WHEN R

WILL IMMEDIATELY BE INFORMED.

RSSARDStoJINNESS+MAHON f.TD.t DUBLIN.

: h*

-V3C3 6MCT CP,23205 MARS.^t&^fSENT AT t3.30M ' -


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Appendix XV (84) (1) (e)


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r*

A A L E X A N D E R H . M A J O R30 LINCOLN PLAZANCW YORK. NY 10013 .Al&ySt tftgj.

o.?J2K. 6UINESS+MH0N LTDThree.Hundred-Thousand Collars4J)qZ1QQ=

-I * 300,000.00T.DO I t A US

USTrust ffl&VSi""""*-4 M SUMNavvwk, NY MOO* Principal Jg_ fyll,,f$. s o z t t W t t a f c

for loan dated..Sfl3 5

AtBXANOeR H. MAJOR30 UNCOLN PLAZANBW YORK, NY 10023

asar mmsmm LTD

August 26 t86

-> * 400.000.00Four Hundred Thousand Dollars 4 no/100 n n 1 1 A s

ITCTVtfC* UMTU O T I T I S TRUST COU & L I U S I Of mm torn " " UWa* (MM i

P r i n c i p a f f rf l f ir t o r loan d ated A ( T )ay-10J983- : o 2 i o o m a i : t i s & a a s *

i AUXANOER H. MAJOR30 UNCOLN PLAZANEW YORK NY tOOtt

ftT^S" 6UIMESS+MHQM LTD

2 2 1

1-lJt/ttO

j $ 23.6iz.aa

Twenty Three Thousand Six Hundred Twelve * 88/100 As

USDrust j j ^ W T C a ,

Inter est* "/^P on SI00K loan dated Jw A J r WA2/22/82-fronr8/27/84 t j 8/26/86" ^ : ^ ^ A

* i : o a i o a i a i a : E>l s & a i S* * \

ALEXANDER H. MAJOR31 UN COLN PLAZANEW YORK, NY 10 09

!!*_ ...GUINESStMAHQN_L7Q _

2 0 8

_.Aagj is t_ j_1 9_8i wjimo

1 $ 100,000.00....One Hundred-Thousand.Dollars JLnoZlQflh

j| USTrust S a W S ?1 " " " "a S M M M M M ,4 vvjll StrawI PrinclpaT n r w i T V Iw n dJted

( February 22, 1982 j_ i :o2ioot3ia: &; s ^ a a 5*

r.OOLLARS

T


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Appendix XV (85) Ms Augustina Russek de Malamud

1. Evidence relied upon by the Inspectors in arriving at the conclusion relating to MsAugustina Russek de M alamud.

a) Promissory Note infavour of Guinness and Mahonof 5 February 1982.

b) Letterof 1 March 1982 - Guinness and Mahon to Isaac Carlos Malamud,Carlos David Malamud & German Malamud.

c) Letter of 24 January 1984 - Guinness and Mahon to Carlos D Malamud.

d) Internal Guinness and Mahon credit memoof 11 July 1984.

e) Internal Guinness and Mahon credit memoof 17 January 1989.


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Appendix XV (85) (1) (a)


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n

Oate: .Wbruary.5, .1982. . . .

PHIHlSSORr NOTE

Wa, Isaac Carlos Malaaud,-.!

UrVosDavid Mataw d, Ganaan Hal mo d, c/ o , Isaac C.

Maiwud t Sons, 4990, 'HtfSlon Boulevard, Sui t* 2, San Oalno, CsUornU 92109,U.S.A., herebyJa&gff l Severally promtj to pay to Guinness *Mahon. Unitedof 17, Co Ha jfj wf in. Oublfn 2, Ireland the sum of Five Hundred and FiftyThousand Uif tiiT Sta tes Dollars (U.S .$550,000.00)"together with intere st thereo,,a t t he rate of six tee n perce nt per annual on the anni vers ary or drawdown of safdsun.

fAll payments on account of principal and int er es t In resp ect of th is loan shallbe affectively ade to Guinness + MahonL11 tad w1,tho fcf set-off or counter-claim , free and clea r of, and without deduction .for-'or on account of, any andall present and future sUitp taxes, levies , frpdsts, du tie s, deductions,withholdings, reserv es or other charges [of-whatsoever natu re, toposed, lev ied,collected , withheld ar assessed by i |n/-Gbvanent or any po litic al subdivisionor tax authority thereof.

This Note is imt negotiable and any holder shall take this Note subject to allcl aim , defense, and r ights of set-off which My exis t a t any t iae.

JLuuuuj

SIGNED

SltjNEO

SHSNEO"

i

I\1[

V,'

\

O CI


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Appendix XV (85) (I) (b)


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IS to be paid by borrowers to '-lende rs on acce ptanceof t h is commitment and borrowers to pay a ll leg alstamp duties, taxes and any other disbursements inconnection with this borrowing.

Please confirm your acceptance of t h is fa c i l i t y and t he terms andcondi t ions hereof by s igning and re turning the copy of th i s l e t t e r . Thereafteron receip t of executed promissory no tes and satis fac tory au dite d f inan cialstatem ents we sha ll forward the funds to your Bankers, Lloyds.Ban k, SanDiego (attention: Mr. Thomas Anderson).

Me confirm th at we w ill con sider making a fur the r lo an of U.S.S450,000 on sim ila r terms in abou t two o r thr ee months tim e.

Yours fa i thful ly,for GUINNESS + MAHON LIMITED.

Pat O'Owyer,Banking Manager.

B. J . Hclough lln,Manager.


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Appendix XV (85) (1) (c)


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Sv*

'' t

G + M G U I N N E S S + M A H O N L T DTINKERS 17 CoStga OnmPMm 2 PD. 5BATi: 718844 (17 UnJ

Our Ref: POD/SC ' 24th Janu ary, 1984.

Z 0 ^ ^ . Mr. Carlos D. Malamud,;'",) L C. Malamud & Sons,4990, Mission Boulevard,Suite 2,Saa Diego,CALFORN1A 92109-2095

Dear Mr. Malamud,

Thank you for your le tte r of the Uth January, 1984.

It would seem tha t ce rtain confusion has arisen In relation to youraccounts consequently therefore I Drill attem pt to explain the position toyou In detail. You will recall th at originally we opened two loan accountsIn our books far sums of LLS.$550,000 and U.S. $450,000.00. The loans wereincreased by a sum of U.S.$20,000 representing funds transferred as per my

. telex to you dated 7th January, 1983.

On the 31st March, 1983, the Interest rate applicable to the loanwas reviewed subject to agreement with Guinness Mahon Cayman Trust Ltd.It was decided to charge interest on the loan a t 24% over the co st of oneyear's U.S.$ Deposits i.e. 12 5/8% fixed for a period of one year. On the8th June, 1983 we notified you by telex that Interest of U.S.$17,552.26 andU.S.$14,990.20 would becom e payable as at 30th June, 1983 in respect of loansof U.S.$550,000 and U.S. $470,000.00. A sum of U.S.$52,551.46 was subsequentlyreceived.

Following further discussions with Guinness Mahon Cayman Trust,it was agreed to amalgam ate the loans making a total sum of U.S.S1,020,000outstanding. At th e same tim e it was agreed to extend the loan for a periodof one year and maintain the interest rate at 12 5/8% for the year.

Consequently therefore Interest is accruing due on the account,however such interest will not be debited to the account until 30th June,1984. In the m eantime any funds received from you have been credited tothe account.


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Finally the following rep rese nts amounts of intere st received fromIn respe ct of th e loan accoun ts since incepeloic-

Loan U A S 470.000.00

30.6.8230.9.823L12.823L3.8330.6.83

U.S.S

U.S.$

4,193.75

18,400 .0018,400.0018,800.0014,999.20

Interest debited andreceived.

Loan UL&S55Q.00Q.00

Interest Debited

30.4.82 - U.S419,555.5430.6.82 - U.S,$14,380.9430.9.92 - U.S.$22,488.8831.12.82 - U.S.S22,488.8931.3.83 - U.S.J22,000.0030.6.83 - U.S.S17.552.26

U.S.$U8,466.51

Interest Received

U.S.$22,000.00UA$I2,028.48U.S.$2i3B6.84U.S.S22,488.87

U.S.$22,000.00UJS.S17.552.26U.S. $118,466.45

I trust th e above will be of assistance to you.

Kindest regards.

Yours sincerely,for GUINNESS + MAHON LIMITED.

Pat O'Dwyer,Banking Manager.


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C R E O I T H E M O R A H O U H ^KewiMlsNjT.

f A P P L I C A N T t

3S t

3SS / OCCUPATION I

T s

Carlos Malamud, Carman Malamud, Isaac Malamud.

c/o, L C Malamud4 Son*, 4890, Mission Boulevard,Suite 2, Son Diego, Calirornfa 92109, IXS.A.

Clients or G.M.C.T.

U.S.S2S0,000.00

)SE s Investment purposes.

One year.

KENT FEE (. Date: 11.01.1989

XKCr .SB/RENEWAL: Credit Class: SATISFACTORY

BORROWER: CARLOS, GERMAN & AGUSTINA RUSSEX DE MALAMUD

PROPOSAL & PURPOSE OF FACILITY(S):

Further advance of US$80,000 is required as an increase to existingfacility of US$1.27 million granted ito assist .with various businessventures.

Source of Repayment, Repayment Programme & Final Maturity: ; :

From Business profits, final maturity 37.02.1992 (Next Review 27.02.1990)

bank's Income (including eeturn n capitax) : ~

.'-."i #3,375 (No use of capital) Margin .5% less .25% fee

'-Security and Security Margin: ~

'rst Legal Mortgage over office buildings at Solona Beach, San Diego,.


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Appendix XV (86) Mr Joseph M alone1. Evidence relied upon by the Inspectors in arriving at the conclusion relating to Mr

Joseph Malone.

a) Transcriptof evidence of Mr Joseph Malone dated 12 May 2000.

b) Investment Agency Account - 1988.

c) Letterof 3 October 1988 - Annsbacher Limited to Joseph M alone.

d) Balance Sheetof Investment Agency Account as at31 May 1993 -Sterling.

e) Balance Sheet of Investment Agency Account as at31 May 1993 - USDollars.

f) Balance Sheet of Investment Agency Account as at31 May 1993 - DMK.

g) Balance Sheet of Investment Agency Account as at31 May 1993 -Sterling.

h) Balance Sheetof Investment Agency Account as at31 March 1991Sterling.

i) Balance Sheet of Malone Agency Account as at31 March 1993 - USDollars.

j) Balance Sheet of Malone Agency Account as at 30 June 1990 - Sterling,

k) Letterof 17 November 1986 - JD Traynor to GMCT.

1) Letter of 26 July 1990 - Ansbacher Limited to Guinness and Mahon.

m) Letterof 1 August 1990 - Ansbacher Limited to Guinness and Mahon .

n) Letterof 1 March 1991 - Ansbacher Limited to IIB.

o) Letterof 11 March 1991 - Ansbacher Limited to IIB.

p) Letterof 23 May 1991 - JD Traynor to Joesph M alone.

q) Letterof 3 July 1991 - JD Traynor to IIB.


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Letter of 28 September 1992 - Ansbacher Limited to Guinness andMahon.

Malone Agency Account as at 30 June 1990.


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PRIVATE EXAMINATION OF MR. JOSEPH MALONE

UNDER OATH

ON FRIDAY 12TH MAY 2000

I hereby certify the

following to be a true and

accurate transcript of myshorthand notes in the

above named interview.

Stenographer


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PRESENT

The Inspectors:

Solicitor to the Inspectors

Interviewee:

Represented by:

MR. JUSTICE COSTELLO

MS. MACKEY BL

MS. M. CUMMINS

MR. JOSEPH MALONE

MR. PEARSE MEHIGAN & CO

PEARSE MEHIGAN & CO

84 UPPER GEORGE'S STREET

DUN LAOGHAIRE

COUNTY DUBLIN


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WITNESS

I N D E X

EXAMINATION

MR. J. MALONE MR. JUSTICE COSTELLO


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1 THE EXAMINATION COMMENCED, AS FOLLOWS, ON FRIDAY,

2 12TH MAY 2000:

3

4 MR. JUSTICE COSTELLO: Mr. Malone, we will start

5 our interview then. I am

6 Declan Costello and on my right is Ms. Mackey. We

7 have been as you know appointed by The High Court to

8 investigate these matters that are set out in the

9 Order we sent you.

10

11 I should explain at the outset Mr. Malone that this

12 is not a Court hearing and it is not a Tribunal

13 hearing. It is an investigation.

14

15 If during the course of the questions that we ask

16 you you wish to obtain the advice of your solicitor

17 please tell us and we will stop asking you the

18 questions.

19

20 Similarly, if Mr. Mehigan thinks that he wants to21 give you advice about any questions he can indicate

22 so to us and we will stop asking the questions.

2 3 MR. MALONE: Thank you.

24 MR. JUSTICE COSTELLO: Mr. Malone, the

25 evidence is taken under

26 oath and I will ask Ms. Cummins, our solicitor, to

27 administer the oath to you.

28 MS. CUMMINS: Judge, I think

29 Mr. Mehigan wants to

4


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1 mention something.

2 MR. MEHIGAN: If I may before he goes

3 under oath.

4 MR. JUSTICE COSTELLO: Yes.

5 MR. MEHIGAN: Just to bring some matter s

6 to the attention of the

7 Inspectorate.


9 MR. MEHIGAN: That we have come upon in

10 the recent days and,

11 indeed, recent weeks.


13 MR. MEHIGAN: Just to add to and

14 elaborate on matters that

15 have been raised in Mr. Malone's statement. I have

16 discussed them with Ms. Cummins before we sat but I

17 do believe they are relevant. I would like to just

18 introduce them and explain their origins.

19

20 If you refer to the first part of the second page of

21 our statement Mr. Malone mention s how in 1992

22 he borrowed a sum of $300,000 from Irish

23 Intercontinent al Bank on a back to back basis and he

24 says in his statement:

25 "Unfortunately, despite a thoroughsearch of my papers I do not appear to

26 have any documents relating to thatloan."

2728

29 Mr. Malone has, since making that statement, been

5


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1 nor did he receive a cheque from Guinness & Mahon

2 Ireland Limited. There is a letter, included in the

3 booklet of documentat ion that we have handed in,

4 dated 23rd May 1991. It is from J. D. Traynor to

5 Joe Malone and it details a number of payments,

6 US dollar payments . One is US$60,000 transfer to

7 O'Dwyer Bernstien. The second was an US$80,000

8 transfer to Coolidge Bank & Trust Company, which was

9 a account of Mr. Malone. Then there was a transfer

10 to AIB in sterling representing a total of

11 IR4 0, 000.

12

13 It transpires that those monies were paid to

14 Mr. Malone through a bank operated by Des Traynor in

15 the US and the bank was Hanover Trust Manufact urers.

16 We do not have the cheques I do believe but I am

17 just saying that now because those three payments

18 were payments to Mr. Malone on foot of monies

19 deposited in the Cayman Islands.

20 MR. JUSTICE COSTELLO: We will have to examine21 all these documents.

22 MR. MEHIGAN: Yes.

23 MR. JUSTICE COSTELLO: Mr. Malone can explain

24 on oath to us what these

25 documents are.

26 MR. MEHIGAN: That is fine.

27 MR. JUSTICE COSTELLO: And we may have to recall

28 Mr. Malone later but at

29 the moment we will just note that you have got

7


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1 describes how his relationship with Guinness & Mahon

2 ended, and how he duly closed his account and used

3 the funds he held at the time to pay off loans. He

4 has had no further dealings with the bank since

5 then.

6

7 Again, recent enquiries have unearthed documents

8 which have not been, or are not, before you but they

9 are now and I have furnished copies to Ms. Cummins.

10 Again, I will tender the original (Same Handed).

11 There a number of payments, totalling US$155,000,

12 which was the balance of money at the time in his

13 account in the Cayman Islands when he closed the

14 account. They were used to discharge again certain

15 debts and liabilities in America .

16

17 However, again the reason I am introducing this is

18 that the balance after the US$155,000, left a

19 balance of IR15,000 in the account and that was

20 transferred to his account in the Allied Irish Bank,21 Foster Place by cheque dated 9th May 1995.

22 MS. MACKEY: To AIB?

23 MR. MEHIGAN: To AIB, Foster Place.

24 MS. MACKEY: In 19?

25 MR. MEHIGAN: 1995, the 9th May 1995.

26 The payments, as I said,

27 clearing his account were all May 1995. Again, I am

28 just linking back that to the part of his statement

29 where he said he never withdrew cash or cheque. In

9


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1 fact he did receive a payment from The Irish

2 Intercontinen tal Bank in the sum of 15,000, which

3 was the balance of the monies.

4 MS. MACKEY: Yes.

5 MR. MEHIGAN: And, finally, and this

6 again has only come to our

7 attention again as a result of his secretary trying

8 to go through all his papers, there is a payment

9 here which went into the same account in the AIB,

10 dated 26th August 1993, and again from The Irish

11 Intercontinent al Bank in the sum of IR8,000.

12

13 I am only introducing these and putting them on the

14 record because they have only now, as a result of

15 his various enquiries though his accounts and papers

16 etc, both in New York and back here, been upturned

17 in the recent weeks and as recently as yesterday.

18 MR. JUSTICE COSTELLO: Very well Mr. Mehigan.

19 Thank you. Ms. Cummins,

20 if you could administer the oath then.

21

22

23

24

25

26

27

28

29

10


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1 MR. JOSEPH MALONE, HAVING BEEN SWORN, WAS EXAMINED

2 AS FOLLOWS BY MR. JUSTICE COSTELLO:

3

4 1 Q.

5

6

7

8 A.

9

10

11

12

13

14

15 Then I left to start, and I started, Joe Malone

16 Self Drive Limited, which was my own company, in

17 May 1957, which I ran for about six/seven years.

18 Then I sold it to -- during those six or seven years

19 we built up a fleet of about 600 cars with Depots in

20 Dublin, Cork, Limerick and Shannon -- Dublin, Cork,21 Belfast and Shannon. We had 200 leased cars also

22 and about twenty chauffeur driven cars.

23

24 I sold that company to the Kenny Motor Group in

25 England in 1964 and then worked with them. There

26 was a gentleman's agreement that I would stay for

27 three years and after two and a half years I told

28 them I didn't want to stay any longer.

29

MR. JUSTICE COSTELLO: Mr. Malone, could you just

briefly outline your

career, your business career, and then we can come

to deal with your association with "Ansbacher"?

Of course. Of course, Judge. In 1951 I joined

Ryans Car Hire. Six or seven months later I became

Manager of Ryans Car Hire. At that time we had

twelve cars and I worked with Dermot Ryan as his

General Manager, and subsequently as his Managing

Director, from 1951 until 1956/57.

11


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1 Then I left them and I was then Chairman of the

2 Rehabilati on Board and I worked there for about

3 three months, while I was deciding what I might do.

4

5 I was approached by, the then Marketing Director of

6 Bord Failte, Michael Whelan, and invited to become

7 General Manager North America for The Irish Tourist

8 Board. After a month or two I accepted this

9 position, which I took up in early 1967 and I became

10 -- I was there until 1976, late 76. I think

11 October 1976 I became Director General of

12 Bord Failte.

13

14 Then I left Bord Failte in 1983 and worked with

15 Smurfits as Executive Vice President Marketing for a

16 year.

17

18 Then I joined General Automo tive Corporation, Ann

19 Arbor, Michigan, for a five year contract and I

20 worked there from 1983 until 1988. Then resident21 part of the time in New York. I think it was the

22 first year and then moving to Ann Arbor, Michigan

23 for the last four years.

24

25 Then I took up a positio n as President of the

26 Saulders Hotel Group, which was the Boston Port

27 Plaza Hotel & Towers, an 1,100 bedroom hotel, where

28 I worked for five years but unfortuna tely because I

29 contracted prostate cancer I had to resign my

12


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1 position. Since 1992, late 1992, I really have

2

3

4

done very little as an executive.

3

4 In 1990 I had a company called International Focus

5 Consultants in New York, which I think I commenced

6 around, approximate ly around, 1993 and I did some

7

Q

consultancy work.

O

9 Then in 1995 together with Cathal Mullen, who was

10 the former Chief Executive of Aer Lingus, we formed

11 a company called Malone Car Rental and we started

12 operations on 1st May 1995. Subsequently we sold

13 that around the end of 1999 to The Carey Motor Group

14 in Cork and that is my career, Judge.

15 2 Q. Yes. Just for clarification, you were in

16 Bord Failte as General Manager North Americ a?

17 A. Ye s .

18 3 Q. Then you came back to Ireland, did you, as

19 Director General of Bord Failte?

20 A. Ye s .21 4 Q. That was in 1976?

22 A. Ye s .

23 5 Q. How long were you Director General of Bord Failte?

24 A. Until 1982. I was appointed by the then Government

25 under Liam Cosgrave.

26 6 Q. In 1982 then you ceased being Director General, did

27 you?

28 A. That is right, yes, late 1992.

29 7 Q. And then?


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1 A. Or 1982.

2 8 Q. Then you moved into The Smurfit Company?

3 A. Yes.

4 9 Q. How long were you with The Smurfit Company?

5 A. One year.

6 10 Q. One year. So, that got you to 1983, is that right?

7 A. Yes, and then I joined General Automot ive

8 Corporation, Ann Arbor, Michigan.

9 11 Q. In Michigan ?

10 A. Yes.

11 12 Q. You would have resided in Ireland up to that date,

12 is that right?

13 A. Up t o - - yes, up to 19 yes.

14 13 Q. Then you moved to Michigan?

15 A. That is right. I moved to New York first, Judge.

16 14 Q. Yes?

17 A. Because when they originally hired me it was really

18 to be their Vice President for The Eastern

19 Seaboardyes.

20 A. But they fell out with the Ma ss ac hu se tt s and the21 New York Authori ty. So, then I had to move to Ann

22 Arbor, Michigan.

23 15 Q. You were effectivel y then in the United States then?

24 A. That is right.

25 16 Q. In these different positions you have indicated?

26 A. Yes.

27 17 Q. And the Malone Car Rental in 1959, this was operated

28 here in Ireland, was it?

29 A. That is right, yes.

14


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1 18 Q. Did you come back to live in Ireland then?

2 A. I came back to Ireland in 1997.

3 19 Q. Yes?

4 A. Actually the background to that is the company ran

5 into a lot of financial difficultie s because we lost

6 two Managing Directors within the course of two

7 years, both died of brain haemorrhages.

8 20 Q. Yes?

9 A. And the company ran into financial difficulties and

10 as it had my name I tried to come back to help it

11 out.

12 21 Q. Yes?

13 A. Now, I wasn't working. I mean I was there trying to

14 guide it. I didn't actually work in an executive

15 capacity in it.

16 22 Q. Then.. . (INTERJECTION)?

17 A. But then we resolved that.

18 23 Q. Yes. Then Mr. Malone will you come now to deal with

19 your relationship with Mr. Traynor and with the

20 companies that he was associated with? When did you21 first meet Mr. Traynor?

22 A. Around 1963, early 1964.

23 24 Q. Yes?

24 A. When I was negotiating with The Kenny Motor Group to

25 sell my company on the introduction by Shell & BP.

26 Shell & BP indicated to me that they wanted

27 The Kenny Motor Group to take over the franchise for

28 the sale of petroleum , oil products

29 on.. . (INTERJECTION).


91/635

1 25 Q. We need not go into too much detail?

2 A. Well, Okay. Okay, yes.

3 26 Q. It is just about how...(IN TERJECTI ON)?

4 A. That is how. Well, what happened ...(INTE RJECTION ).

5 27 Q. How you met Mr. Traynor?

6 A. Well, what happened was Mr. Traynor owned

7 Dublin Petroleum.

8 28 Q. Yes?

9 A. An d they wanted to get control of it.

10 29 Q. Yes?

11 A. And they asked me to try and buy out Dublin

12 Petroleum from Mr. Lanigan, yes.

13 A. I had a meeting with Mr. Lanigan and Des Traynor

14 accompanied him to the meetin g as his financial

15 advisor.

16 30 Q. Anyway you got to know Mr. Traynor then?

17 A. Yes.

18 31 Q. I want you now to come along to deal with the

19 relationship that developed, the business

20 relationship that developed, between you and21 Mr. Traynor. When was that first suggested by

22 Mr. Traynor?

23 A. As far as I can recollect it was some time in the

24 early 1970's.

25 32 Q. Yes?

26 A. In New York.

27 33 Q. In New York?

28 A. Yes.

29 34 Q. It was when you were still in Bord Failte?

16


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1 A. I was still in Bord Failte.

2 35 Q. Alright . What was the relationship and just tell me

3 as such as you can remember? When it first started

4 what was it?

5 A. Well, Ireland was much smaller, you know, and there

6 weren't as many people travelling to the States then

7 as now and it was a big deal. I met him at a

8 function here in Dublin when I was back from Bord

9 Failte. He said that he was going to the States and

10 could I suggest a hotel he might stay at and I said,

11 "Of course." I said, "I will make arrangements for

12 you if you like." So, I made arrangements and he

13 and his wife invited my wife and myself to meet with

14 him and that was really the beginning of, you might

15 say in the broadest sense, a personal relationship.

16 36 Q. Yes?

17 A. Prior to that it was an acquaintance relationship.

18 37 Q. Yes?

19 A. So, I met with him. I arranged his hotel for him

20 and met him in New York.21 38 Q. When was that?

22 A. That was around 1992 sorry 1972/73.

23 39 Q. Yes. If we could just deal with the business

24 relationship?

25 A. Of course. Well, at that time I was asking him

2 6 about what was happening in Ireland, I had some

27 property and things in Ireland, and I just was

28 asking his advice.

29 40 Q. Yes?

17


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1 A. And he called me the following day and he said,

2 "Joe," he would like to meet me for breakfast and I

3 met with him I think a day later. He said, "You

4 know, if you really are interested in having someone

5 look after your interests in Ireland," he said, "I

6 would be very pleased to do it." This was on a very

7 personal basis.

8 41 Q. Yes?

9 A. And I said, "That would be great," and that was the

10 beginning of our relationship.

11 42 Q. Yes. Just give me a little more detail then. What

12 was it? What was the interest he was looking after

13 for you?

14 A. Well, then I had stocks and shares in Ireland.

15 43 Q. Yes?

16 A. And he said that he would look after them for me.

17 44 Q. Yes?

18 A. Up to then all of my banking had been with

19 Provincial Bank of Ireland in Upper O'Connell

20 Street, which is now Allied Irish Banks.21 45 Q. Yes?

22 A. But he said that he would open an account for me

23 with Guinness & Mahon and that he would open, as I

24 was non-resident in Ireland, a non-resident account

25 for me and that was the beginning of the

26 relationship.

27 46Q.

Yes?

28 A. And he began to look after my interests.

29 47 Q. Yes. What was this non-residen t account? Were you

18


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1 going to use this as a banking deposit account?

2 Were you going to use this as a savings account?

3 A. Sorry, for savings?

4 48 Q. Savings ?

5 A. A savings account, no. Well, my recollecti on at the

6 time was that he was just going to use this account

7 to trade the shares for me, to buy and sell shares.

8 49 Q. To use the shares?

9 A. Ye s .

10 50 Q. It was not an account that you were going to put

11 money into and cash cheques on and that?

12 A. Not at that time, no. Not at that time, no.

13 51 Q. Did he mention putting this into the Cayman Islands14 at this time?

15 A. Not at that time, no.

16 52 Q. When was the Cayman Islands first mentioned?

17 A. It is very hard to remember. It would be probably

18 around 1975/76. He just said that he was -- it

19 would be appropriate as I was a non-residen t that he

20 -- it was around 1975, that he would -- was it21 alright with me if he opened an account for me in

22 the Cayman Islands.

23 53 Q. What does "appropriate as non-resi dent" mean? Was

24 he talking about the tax position?

25 A. I think so, yes. Yes, Sir.

26 54 Q. Tell me about that?

27 A. I was resident in the United States and -- yes, he

28 had transferred money for me. He had applied to The

29 Central Bank because I had to get money in, to buy a

19


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1 house in the States, 1967/68 and I got that myself

2 through Provincial Bank. Then I needed some more

3 money in 1974/75, I think around that time, and I

4 asked him and he said he would arrange it for me.

5 Then he came back and said, "There is no problem.

6 You are a non-resi dent," that he had been in touch

7 with The Central Bank and that was that.

8 55 Q. However, Mr. Malone that is an exchange control

9 problem?

10 A. Ye s .

11 56 Q. I was asking you about the income tax. What did

12 he tell you about the income tax?

13 A. He didn't say anything at that time about the

14 income tax.

15 57 Q. When did he talk to you about the income tax then, a

16 liability for tax?

17 A. It didn't arise for years.

18 58 Q. It did not arise?

19 A. For years, your Honour.

20 59 Q. Right. You still have not told me how it came about21 that he was suggesting the Cayman Islands?

22 A. Well, he just said was it all right with me if he

23 opened an account in the Cayman Islands and that he

24 transacted my business in the Cayman Islands. He

25 said that Guinness & Mahon had a branch in the

26 Cayman Islands and that he was trying to build up

27 his client portfolio, and would I allow him to do

28 that.

29 60 Q. Yes?


96/635

1 A. And I said yes.

2 61 Q. From then on you knew there was money being

3 deposited?

4 A. Yes, I did, yes.

5 62 Q. In the Cayman Islands?

6 A. That is right.

7 63 Q. When was that? About 1975/76 you think?

8 A. Very little because I didn't have that much money

9 then.

10 64 Q. No. However, I just want to get the dates?

11 A. Yes, around that time. Around then.

12 65 Q. Yes?

13 A. Around that time as far as I can recollect.

14 66 Q. Thereafter then you would transfer money to him,

15 would you, in Dublin and he would transfer to Cayman

16 or would you put it directly into Cayman Islands?

17 A. I never did it directly.

18 67 Q. Yes?

19 A. I mean I would transfer it from New York to him

20 or. . . (INTERJECTION).21 68 Q. Yes?

22 A. Yes. I...(INTERJEC TION).

23 69 Q. Did you know that this was a subsidiary of

24 Guinness & Mahon?

25 A. I did, yes, because he said it was.

26 70 Q. He was Chairman?

27 A. He had indicated that to me. He may not have been

28 Chairman at that time your Honour. I mean my

29 recollecti on is that he wasn't Chairman of

21


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1 Guinness & Mahon at the time that he did it.

2 71 Q. I see?

3 A. I know he was Joint Managing Director with Maurice

4 0'Kelly here at the time.

5 72 Q. Yes?

6 A. Of Dublin.

7 73 Q. Yes?

8 A. But it was subsequent to that I understoo d that he

9 became Chairman.

10 74 Q. Right. Did you then as time went on, from 1975/76,

11 then arrange to transfer funds to Mr. Traynor, which

12 would be then sent on by him?

13 A. Yes.

14 75 Q. To your deposit account?

15 A. Yes, your Honour, yes.

16 76 Q. You would have been building up over the years

17 a deposit account in the Cayman Islands?

18 A. Yes.

19 77 Q. Yes?

20 A. It was not really until 1985/86 because the amount21 of money I was earning in Bord Failte.

22 78 Q. Yes?

23 A. My earnings allow me to do it, your Honour.

24 79 Q. Yes?

25 A. I mean for the record I was earning 12,000, a year

26 of which I paid 5,000 in tax, when I worked with

27 Bord Failte. That left me 7,000. I had two

28 daughters in college in the United States that was

29 costing me $6,000 each. So, I really was living

22


98/635


99/635

1 well.

2 90 Q. Yes?

3 A. And at that time the share market wasn't as buoyant

4 as it is now.

5 91 Q. I just want to know the technical arrangements that

6 were made?

7 A. Yes.

8 92 Q. Were these shares in your name for example?

9 A. They were all in my name, yes.

10 93 Q. They were all registered in your name?

11 A. No, maybe -- no, sorry, your Honour, no. He then

12 told me that he was putting them in an account

13 called -- wait until I see. It is -- sorry -- there

14 was excuse my memory.

15 94 Q. Yes?

16 A. But there was a name for it. It was like -- it was

17 a numbered account. Mars Nominee.

18 95 Q. Yes?

19 A. Mars Nominee account and I asked him, "Why

20 Mars Nominee," and he said that most of the shares21 that he was handling on behalf of Irish residents

22 and foreign residents he had in numbered accounts,

23 Mars Nominee.

24 96 Q. The shares that he purchased on his behalf were not

25 registered in your name?

26 A. Yes.

27 97 Q. However, registered in the name of Mars Nominee?

28 A. That is my understan ding.

29 98 Q. When they were sold then Mars Nominee would get

24


100/635

1 w h a t e v e r . . . ( I N T E R J E C T I O N ) ?

2 A. That is right.

3 99 Q. If there was a profit?

4 A. Yes.

5 100 Q. And that would be transferred then to your account,

6 is that what you thought?

7 A. Yes, that is correct.

8 101 Q. And.. . (INTERJECTION)?

9 A. In Guinness & Mahon account.

10 102 Q. In Guinness & Mahon in Dublin?

11 A. Yes.

12 103 Q. Then when you opened the account in Guinness Mahon

13 Cayman Trust in the Cayman Islands, was the money

14 then transferred there?

15 A. I didn't realise it was Cayman Trust. I thought it

16 was just Guinness & Mahon Bank.

17 104 Q. The name of the company?

18 A. Sorry.

19 105 Q. It is the name of the company?

20 A. I see, was Guinness Mahon Cayman Trust.21 106 Q. Yes?

22 A. I wasn't aware of that your Honour, yes.

23 107 Q. Am I right in understand ing that the money was then

24 transferred?

25 A. Yes.

26 108 Q. To Cayman?

27 A. Yes.

28 109 Q. If you made a profit on it?

29 A. Yes, yes. Yes, your Honour, but also I had a

25


101/635

1 resident account. I had a resident account in

2 the years I was back here in Ireland w ith

3 Guinness & Mahon in Dublin for other monies that

4 he was handling on my behalf.

5 110 Q. What were these then Mr. Malone? What were these

6 monies ?

7 A. I honestly can't remember your Honour.

8 111 Q. Yes?

9 A. I am not avoiding but. . . (INTERJECTION).

10 112 Q. However, when you say he was handling it, what was

11 he doing with them? Was he investing them?

12 A. No, no. This was really like -- it was like a -- it

13 was what you call it? It was a non interest bearing

14 account.

15 113 Q. Well. . . (INTERJECTION)?

16 A. For instance I had occasion in 19 -- this might help

17 you if I am rambling on just tell me your Ho nour.

18 In 1981 or 1982 I got a call from Allied Irish Banks

19 in Dublin to tell me that I was in deliquency, that

20 I was in 41,000 it was 41,000 or 43,000 and21 they gave me three days to repay it. I called

22 Des Traynor and I said, "Des, look I have this," and

23 he said, "What is your bank? What is your number?"

24 He said he would transfer it that day from a

25 resident account and I don't know how he handled it

26 without any -- I didn't have any backup or

27 document ation or anything, the 41,000 or 43,000 to

28 Allied Irish Banks.

29 114 Q. So.. .(INTERJECTION)?


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1 A. So, that is what it was used for. It was like a

2 yes.

3 115 Q. So you had this facil i ty then by which Mr. Traynor

4 was able to make a payment on your behalf?

5 A.That is right.

6 116 Q. Yes?

7 A. It was a checking account.

8 117 Q. Sorry?

9 A. A checking account.

10 118 Q. A checking account?

11 A. Yes.

12 119 Q. These were funds that you had transferred to him.

13 It was not a loan. It was your mone y that he was

14 paying to AIB?

15 A. No, my understanding at the time was that that had

16 nothing to do with the money that he had on my

17 behalf in Cayman Islands or non-resident accounts,

18 that he would just loan me that money on it.

19 120 Q. He lent it to you, did he?

20 A. Yes.

21 121 Q. A loan?

22 A. Yes. He just said and I had another occasion

23 your Honour. One of my family got into severe

24 diffic ulty in Dallas in Texas and I went out to try

25 and get bail and I was told that I had to produce

26 $75,000 bail and I didn't know who to contact. So,

27 I called Des in Dublin and within two hours he

28 transferred $75,000, not from my money, from

29 Guinness & Mahon in Dublin.


103/635

1 122 Q. Yes?

2 A. To an account which allowed me to get one of my

3 family out of difficulty.

4 123 Q. Yes. However, then presumab ly you had to pay it

5 back?

6 A. Yes, I did. Yes, of course.

7 124 Q. Very well?

8 A. Yes.

9 125 Q. Some of the documenta tion that you have given us

10 Mr. Malone shows that the bank in Cayman held

11 shares. Were these in addition to the Mars Nominee

12 shares?

13 A. I honestly don't know. I really don't know your

14 Honour.

15 126 Q. You see...(INT ERJECTION)?

16 A. Yes, yes.

17 127 Q. As I understand it Mr. Traynor was investing on your

18 behalf in stocks and shares on the market, and was

19 registering the shares in Mars Nominee, in the name

20 of Mars Nominee?21 A. Yes.

22 128 Q. However, we have records that you have given us

23 showing The Cayman Bank?

24 A. Yes.

25 129 Q. Appar ently registered shares?

26 A. Yes.

27 130 Q. Holding share?


29 131 Q. In your account?

28


104/635

1 A. Yes.

2 132 Q. Were these in addition to the Mars Nominee shares?

3 A. Well , I may be wrong but my understanding was at the

4 time, you know, when he took my account off-shore.

5 133 Q. Yes?

6 A. And that that handled the Mars Nominee as well your

7 Honour.

8 134 Q. I see?

9 A. That was my understand ing.

10 135 Q. Yes?

11 A. But I did. To answer your question, I am not

12 avoiding your question, I did add other money to it

13 in addition to the Mars Nominee and whether it went

14 into Mars Nominees or directly into -- you know,

15 whether Cayman -- Mars Nominees was, what would you

16 say, controlled by Cayman or whether it was just

17 transferred to Cayman, I am not sure.

18 136 Q. You see we have the accounts that you have given us.

19 It was called the Investment Agency Accoun t?

20 A. Yes.21 137 Q. Which shows Arran Energy Shares?


23 138 Q. Looki ng at the account (Exhibit 1)?

24 A. Yes.

25 139 Q. In 1988 it shows Arran Energy Shares, it shows AIB

26 Shares, it shows CRH Shares, it shows Bank of

27 Ireland Shares?

28 A. Yes.

29 140 Q. 165,000?

29


105/635

1 A. Yes .

2 141 Q. 165,000 worth of shares?

3 A. Ye s .

4 142 Q. What I want your assistance on Mr. Malone was

5 whether or not, in addition to this holding of

6 shares in this account, you had in addition other

7

8

shares in Mars Nominees during this period or was

everything transferred?

9 A. I thought everything was transferred.

10 143 Q. Everything was transferred?

11 A. My understand ing is that everything was transferred.

12 144 Q. Ye s

13 MR. MEHIGAN: Perhaps, Judge, if I could

14 just refer to the

15 document?

16 MR. JUSTICE COSTELLO: No. It is alright. I

17 will manage alright?

18 145 Q. MR. MEHIGAN: Okay?

19 A. Thank you your Honour.

20 146 Q. MR. JUSTICE COSTELLO: Everything had been21 transferred to the

22 Cayman Islands from about the time that you would

23 have opened the account in the Cayman Islands, or

24 the deposit. That would have been in 1975/76?

25 A. Well, what I would have had in 1975/76 would have

26 been transferred, yes, your Honour.

27 147Q.

Yes?

28 A. And then as I came -- well, as I began to earn more

29 income and get more income, when I moved to the

30


106/635

1 States in 1985, 1984/85, from then onwards, I used

2 that. I am sorry, I transferre d money to that

3 account.

4 148 Q. Yes?

5 A. And bought shares.

6 149 Q. Yes. You also had, as appears in the accounts,

7 money on deposit in the bank and you had shares?

8 A. Yes.

9 150 Q. Is that it?

10 A. Yes.

11 151 Q. The Bank...( INTERJECT ION)?

12 A. In Cayman.

13 152 Q. In Cayman. It states, in the documents that you

14 have given us, that this is the Investment Agency

15 Account . Do you know were the shares held by a

16 company a subsidiary of the bank in Cayman or were

17 the shares held in the name of the company itself?

18 A. My understand ing is that they were held in the name

19 of the company, Guinness Mahon Cayman Islands.

20 153 Q. Guinness Mahon?21 A. Yes.

22 154 Q. You understood that?

23 A. That is my understandi ng, yes.

24 155 Q. Did you come across or were you associated in any

25 way with a company called Hexagon Securities?

26 A. No.

27 156 Q. You were not?

28 A. No, your Honour.

29 157 Q. And as far as you...(IN TERJECTIO N)?

31


107/635

1 A. Is it all right to call you your Honour, is it?

2 158 Q. It does not matter ?

3 A. Because. . . (INTERJECTION).

4 159 Q. It does not matter at all?

5 A. That is Okay. Right, Judge.

6 160 Q. It does not matter at all?

7 A. Okay. It comes easier.

8 161 Q. It does not matter ?

9 A. That is Okay. That is all right, Judge.

10 162 Q. It does not matter any way. We have had evidence of

11 a number of companies that have been established in

12 the Cayman Islands, subsidiaries of Guinness Mahon

13 Cayman Trust Bank, whatever you want to call it.

14 However, you do not think that the shares which you

15 owned were in the name of any subsidiary of the bank

16 in Cayman. You think they were in the name of the

17 bank?

18 A. I am as sure as I can be.

19 163 Q. Yes?

20 A. I would say I am 99.9% sure it was21 all . . . (INTERJECTION).

22 164 Q. Yes?

23 A. Yes.

24 165 Q. Yes. I would just like to bring you through some

25 of the documents that you gave to us. Page 136

26 please (Same Handed)?

27 A. Thank you very much.

28 166 Q. This is a letter of the 3rd Octob er 1988 (Exhibit

29 2) ?

32


108/635

1 A. Yes.

2 167 Q.

3 "Two copies of the statements of yourinvestment account with us"?

4

5 A. Yes.

6 168 Q. That is from Mr. Furze?

7 A. Yes.

8 169 Q. Did you ever meet Mr. Furze?

9 A. I met Mr. Furze on two occasions.

10 170 Q. Yes?

11 A. I met him at Des Traynor's funeral.

12 171 Q. Yes?

13 A. In Dublin.

14 172 Q. Yes?

15 A. And I was in Cayman Islands with four friends from

16 Ann Arbor, Michigan. I think it was around 1988.

17 173 Q. Yes?

18 A. 1987 or 1988.

19 174 Q. Yes?

20 A. And I mentione d to Des that I was going down playing21 golf with my wife and these friends and he said,

22 "Why don't you call into him".

23 175 Q. Yes?

24 A. "And see your bank".

25 176 Q. Yes?

26 A. Quote unquote.

27 177 Q. Very well?

28 A. And I met Mr. John Furze.

29 178 Q. Yes?

33


109/635

1 A. And I think there was man by the name of Collins

2 also there.

3 179 Q. Was that a social occasion?

4 A. Just social.

5 180 Q. Yes?

6 A. I just had a cup of coffee with him.

7 181 Q. Yes?

8 A. Well, a cup of tea.

9 182 Q. Would you just look at the next document? Would you

10 pass on the next document? It is 137, 138 and 139

11 (Same Handed) I think we will pass on all these

12 documents. The whole of that tab (Same Handed)?

13 A. Are you asking me a question in relation to this one

14 (INDICATING).

15 183 Q. Pardon?

16 A. Are you asking. . . (INTERJECTION).

17 184 Q. No, no.

18 A. No, you are not, no.

19 185 Q. I just want to...(INT ERJECTIO N)?

20 A. Me to see it.21 186 Q. Introduce you?

22 A. Okay.

23 187 Q. To the documents?

24 A. Yes.

25 188 Q. The documents then, that you have forwarded to us,

26 refer then to the different accounts. Would you

27 turn to the document, the bottom of the page is

28 numbe red 139 (Exhibit 3)?

29 A. Yes.

34


110/635

1 189 Q. Just at the top of it, it is:

2 "J.N. &/OR I. MALONE."

3

4 It was in the name of yourself and your wife, was

5 it?

6 A. Yes, but my wife never knew anything about it your

7 Honour.

8 190 Q. Yes?

9 A. An d that was in case of my demise.

10 191 Q. In case of your demise?

11 A. Yes.

12 192 Q. Yes, I see. Would you just look at that:

13 "Cash at Bank: "A/G" Call DepositA/c. "14

15 Throughout these documents there is a reference to a

16 code "A/G". Did you know what that was?


18 193 Q. You did not?

19 A. I don't even know today.

20 194 Q. If we look through the documents you will see21 reference t o the page 142. Do you see: (Exhibit

22 4)

23"Cash at Bank"?

24

25 A. I do, yes, I do.

26 195 Q.

27 ""A/G" Call Deposit Accou nt."

28

29 A. Yes.

35


111/635

1 196 Q. And page 144 (Exhibit 5)?

2 A. Yes.

3 197 Q. It is a Deutsche Mark. Is that a Deutsche Mark?

4"(Expressed in Deutsche Mark.)"

5

6 A. Yes.

7 198 Q. Do you see:

8"Deposit Account - "A/G"."

9

10 A. I do, yes.

11 199 Q. Yes. Can you tell me what that was?

12 A. I can't your Honour. I don't know. I can tell you

13 what happened at that time.

14 200 Q. No.

15 A. About that bank because. . . (INTERJECTION).

16 201 Q. At the moment I am just asking you...(IN TERJECTIO N)?

17 A. That is all right. Okay, right.

18 202 Q. About... (INTERJECTION) ?

19 A. No, I don't. I don't know. I don't know your

20 Honour.

21 203 Q. Do you see that it appears that this was a coded

22 account in "Ansbacher" and that the code "A/G" was

23 referring to your account. Did you know that?

24 A. No, I didn't your Honour.


26 A. No.27 205 Q. If you look at page 146 (Exhibit 6)?

28 A. Yes.

29 206 Q.36


112/635

1 "ASSETS"?

2

3 A. Yes.

4 207 Q.

5""A/G" Call Deposit. "A/G" U.S.D.

6 Deposit. "A/G" DMK Deposit"

7

8 A. Yes.

9 208 Q. You do not what... (INTERJ ECTION)?

10 A. No, I don't.

11 209 Q. What does that mean?

12 A. No.

13 210 Q. Yes. The statement of accounts shows then -- the

14 documents that you have given us?

15 A. Yes.

16 211 Q. Shows the shares that the bank held on your behalf

17 and shows the deposits that you held. I think it

18 also shows the interest?

19 A. Yes.

20 212 Q. That was earned on the deposits. We will move on to

21 1997?

22 A. Okay.

23 213 Q. The 1991 accounts shows:

24"A/G" Call Deposit"

25

2627 A. 197 at the bottom?

28 214 Q. Page 197?

29 A. Sorry.37


113/635

1 215 Q. Sorry, it is 167 at the bott om (Exhibit 7)?

2 A. Sorry, that is Okay. That is Okay.

3 216 Q. Page 171 refers -- it is in hand writing?

4 A. 167.

5 217 Q. Page 167?

6 A. Right, yes.

7 218 Q. And then if you turn to page 171: (Exhibit 8)

8

9 ""A/G" Call Deposit Accoun t."

10

11 A. Yes.

12 219 Q. 173 (Exhibit 9)?

13 A. Yes.

14 220 Q. Throughout these accounts there is this reference to

15 what is clearly your code that refers to your

16 account, is that right?

17 A. Yes. Well, I didn't realise. It was a code just

18 referring to my account.

19 221 Q. You did not realise this?

20 A. I didn't, no, your Honour.21 222 Q. If you turn to 184 (Exhibit 10)?

22 A. Yes.

23 223 Q. There is another code there:

24

""A/A38"

25

26 you did not. . . (INTERJECTION)?

27 A. No, I see it now.

28 224 Q. You did not...( INTERJEC TION)?

29 A. No.

38


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1 225 Q. You did not know what it meant?


3 226 Q. Yes?

4 A. May I make a comment?

5 227 Q. Yes?

6 A. Please your Honour?

7 228 Q. Please yes?

8 A. Just a lot of these statements I have never seen

9 until we got them recently on the foot of -- I think

10 it was your Order or some Order, which was supplied

11 by the Moriarty Tribunal.

12 229 Q. Yes?

13 A. I had never seen them until then, a lot of these

14 your Honour.

15 230 Q. Yes?

16 A. Now, I am not denying that I didn't get some of them

17 and they didn't have "A/G" on them but I never -- I

18 was more -- actually your Honour I was more

19 interested in the right--hand side.

20 231 Q. Yes?21 A. Than in the details.

22 232 Q. Yes?

23 A. And the significance of the "A/G" or Mars or these

24 things didn't really... (INTERJEC TION).

25 233 Q. Yes?

26 A. Yes.

27 234 Q. If you did not get accounts, these detailed

28 accounts, surely you must have got something in

29 writing from Mr. Traynor from some source as to how

39


115/635

1 things were going?

2 A. Well, at that time when I was working in the States

3 I came back to Ireland. I had a number of boards

4 that I was on the board of and I would be back to

5 Ireland once a month and on occasions I would ring

6 up and make arrangements to see Des, to come in and

7 have a cup of tea with him.

8 235 Q. Yes?

9 A. And he would just tell me how things were going.

10 236 Q. Yes. Did he produce any written document to you?

11 A. Like these?

12 237 Q. No, not like those?

13 A. Sorry.

14 238 Q. Any written document? Anythi ng like a bank

15 statement for example?

16 A. No, no, your Honour. I didn't, no. A ll I got was

17 some things like this.

18 239 Q. Some things like them?

19 A. And there wouldn't be headings on them or anything.

20 He would just say, "Joe, this is for you".21 240 Q. However, there would be no headings on them?

22 A. No headings, no.

23 241 Q. In fact all names... (INTERJ ECTION)?

24 A. Just.

25 242 Q. There was no name at all on the documents that he

2 6 would have given you?

27 A. No. It would just say: "Joseph N. Malone account."

28 243 Q. Yes?

29 A. And what the details were.

40


116/635

1 244 Q. Yes. This was your account of the funds that you

2 had given to him, which were in the Cayman Islands?


4 245 Q. Yes?

5 A. And also -- now, I did get statements though from

6 him from Guinness & Mahon in Dublin.

7 246 Q. Yes?

8 A. Which would be addressed to me.

9 247 Q. Yes?

10 A. Which would come in and tell me the Certificates of

11 Deposit, which I would return with my tax and things

12 like that your Honour.

13 248 Q. Yes. When did you get those?

14 A. They would have come, I think, once a year.

15 249 Q. Once a year?

16 A. Yes.

17 250 Q. Mr. Malone, I think we will just have a break now if

18 that is all right with you?

19 A. Of course.

20 251 Q. For a cup of coffee, for about ten minute s?21 A. Of course your Honour.

22 252 Q. Very well.

23

2 4 SHORT ADJOURNMENT

25

26 253 Q. MR. JUSTICE COSTELLO: We will resume Mr. Malone.

27 MR. MEHIGAN: Judge, just very briefly

28 before you resume.

29 Mr. Malone would just like to clarify one point of

41


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1 his testimony.

2 254 Q. MR. JUSTICE COSTELLO: Yes, Mr. Malone?

3 A. Okay. The 41,000 or 43,000 that I got from

4 Des Traynor in relation to my problem with AIB.

5 255 Q. Yes?

6 A. To my recollectio n I took up -- AIB -- I mean I

7 still needed money in Ireland and AIB took a

8 mortga ge out -- I think it was my first mortgag e had

9 expired at the time. Now, AIB took out a second

10 mortgage , our mortgag e, on my house in Abbylin,

11 Foxrock, for around 90,000 and I think that is how

12 I repaid the 41,000 to Des, to Mr. Traynor.

13 256 Q. I see. I just want to get some further

14 clarificati on about the vehicles that were used in

15 your investments. Would you turn to Tab 14 and if

16 you could just get all the documents. There are

17 three documents there (Same Handed)?

18 A. Thank you.

19 257 Q. Mr. Malone, these are internal documents of

20 Guinness & Mahon here in Ireland. You will see21 the first one, at page 261 at the bottom, is from

22 "J. D. T... (Exhibit 11)"

23

24 that is Mr. Traynor,

25"...to Investment Dept."

26

27 It is the 30th January 1987. Then he says:

28 "Could you please arrange to letme have a list of any investments

29 you hold on behalf of Mr. Malone,either in his name or in the name of

42


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1 Executive Trust"?

2

3 A. Yes.

4 258 Q. Do you know what Executive Trust was?

5 A. Yes, Executive Trust was a company that I registered

6 and that I was going to operate in Ireland around

7 that time. So, that was a company of which I owned.

8 259 Q. Why did you establish a company? What was the

9 purpose of the company?

10 A. Well, actually at the time I was going to go into

11 another business and subsequent to that that is the

12 company that I used, or the name of the company, for

13 Malone Car Rental. So, Malone Car Rental is --

14 actually Executive Trust and trades as Malone Car

15 Rental.

16 260 Q. You are jumping way ahead?


18 261 Q. In 1987 there was a company in existence called

19 Executive Trust Limited?

20 A. Yes.21 262 Q. Which is registered in Dublin?

22 A. That is right. It never traded your Honour to my

23 recollection.

24 263 Q. It did not trade but apparently it held shares?

25 A. Yes, your Honour.

26 264 Q. Do you know about that?

27 A. I don't remember recollecting it. I know now, when

28 I see it here.

29 265 Q. Would you turn to the next document, page 263

43


119/635

1 (Exhibit 12)?

2 A. Yes.

3 266 Q. This is a letter from you to Ms. Marie McKierna n?

4 A. Yes.

5 267 Q. It is 1994?

6 A. Yes.

7 268 Q. It reads:

8"I would appreciate if you could

9 arrange to sell all shares held in myname and in the name of Executive Trust

10 Limited, as per the attached InvestmentPortfolio"?

11

12 A. Yes.

13 2 69 Q. You must have known about the company Mr. Malone?

14 A. I knew about Executive Trust your Honour but

15 I...(INTERJECTION).

16 270 Q. You said to me a moment ago that you knew nothing

17 about it until I drew your attention to it?

18 A. Sorry. Well, I didn't remember your Honour.

19 271 Q. Now that you do remember?

2 0 A. I do.21 272 Q. Tell me about it?

22 A. You mean -- sorry.

23 273 Q. No. Please Mr. Malone?

24 A. No, sorry. Might I tell you that it was a company

25 that was formed, you know. It was only a shelf

2 6 company that I took and I formed and I was going to

27 trade with it. We never traded but I did,

28 obviously, buy shares with it your Honour.

29 274 Q. That is what I want you to tell me about?

44


120/635

1 A. That is right. That is right. Well, that is all I

2 can tell you your Honour. I am not trying to be

3 evasive but that is all I remember. I had

4 completely forgotten this your Honour. The

5 11th April 1994, that is even prior to the decision

6 to, you know, use that company your Honour for

7 Malone Car Rental.

8 275 Q. You see it looks from the documents that we have

9 that you held shares, or shares were held by this

10 company, from 1987 to 1994?

11 A. Ye s .

12 276 Q. I want you to tell me why this was done? Why were

13 the shares not held in your name? Why was this

14 shelf company used?

15 A. I honestly can't tell you. I honestly can't tell

16 you, your Honour.

17 277 Q. Will you look at the next letter then?

18 A. Ye s .

19 278 Q. The 3rd May 1994 (Exhibit 13)?

20 A. Ye s .21 279 Q. This is from Guinness & Mahon?

22 A. Ye s .

23 280 Q. To you in the Berkeley Court Hotel?

24 A. Ye s .

25 281 Q. It is referring to your account?

26 A. Ye s .

27 282Q.

It gives the balance. Then account of

28 Executive Trust with the balance?

29 A. Ye s .


121/635

1 283 Q. So Executive Trust had an account?

2 A. Yes. I wasn't aware of that your Honour. I am now.

3 I mean.

4 284 Q. It shows a balance?

5 A. Yes, of 2,000 and 1,500, yes.

6 285 Q.

7 "We confirm all holdings in the abovenames ..."

8

9 A. Yes.

10 286 Q.

11 "...have been sold as instructed."

12

13 A. Yes.

14 287 Q. Then there were enclosed two drafts for the balance ?


16 288 Q. Can you assist me in any way as to what that was?

17 What shares this company held and was it associated

18 in any way with "Ansbacher", with the "Ansbacher"

19 arrangement?

20 A. To my knowledge, no, your Honour.21 289 Q. This was separate?

22 A. Separate.

23 290 Q. Why was that? Why were some shares held in the

24 Cayman Islands and some not?

25 A. I don't know your Honour. I don't know. I will

26 check my records your Honour. If there is anything

27 I will come back.

28 291 Q. Yes, if you would?

29 A. I will, yes.

46


122/635

1 292 Q. Because this is 1994?

2 A. Yes.

3 293 Q. And you might have had. . . (INTERJECTION)?

4 A. Yes.

5 294 Q. For example the Investment Portfolio might be on

6 your files?

7 A. Yes, Okay, right. I will check it your Honour.

8 295 Q. I want to ask you some questions Mr. Malone about

9 the cash backed loans. Ms. Cummins, would you turn

10 to tab 8. Would you just take the whole of tab 8

11 out, would you (Same Handed)?

12 A. Thank you.

13 296 Q. Mr. Malone, this first document, the bottom of the

14 page is numbered 109, relates to a loan of $50,000

15 in Nove mber 1986, is that right (Exhibit 14)?

16 A. That is correct.

17 297 Q. Yes. If you look at the next document, it is a

18 letter of the 17th November, from Mr. Traynor

19 (Exhibit 15)?

20 A. Yes.21 298 Q. It says that you require a facility for twelve

22 months and GMCT will guarantee by way of

23 unconditio nal guarantee the principa l in interest?

24 A. Yes.

25 299 Q. This was guaranteed by Guinness & Mahon for you?

26 A. Yes. I wasn't aware of that at the time your

27 Honour.

28 300 Q. You were not aware at the time?

29 A. No.

47


123/635

1 301 Q. If you were not aware of that how did you think the

2 loan was going to be secured?

3 A. Well, the relationship with Des, with Mr. Traynor,

4 was a very personal kind of relationship. I had

5 every trust in him your Honour.

6 302 Q. Yes?

7 A. And it wasn't really like a formal one where you go

8 into a bank and you sit down and they give you all

9 these papers to sign.

10 303 Q. Yes. However, Guinness & Mahon was a bank. It had

11 a customer. It was lending $50,000. Surely you

12 must have thought that, no matter what your informal

13 relationship with Traynor was, the Bank would need

14 some security?

15 A. I didn't.


17 A. No.

18 305 Q. Well... (INTERJ ECTION) ?

19 A. He didn't ask for security in other loans that I got

20 your Honour.21 306 Q. Yes. However, in fact, did Guinness Mahon Cayman

22 Trust not guarantee these loans?

23 A. I wasn't aware at that time that they did guarantee

24 it.

25 307 Q. When did you become aware of it?

26 A. Recently.

27 308 Q. Recently?

28 A. Yes.

29 309 Q. Very well. If you would turn to page 124. This was

48


124/635

1 a loan of $45,00 0 (Exhibit 16)?

2 A. Yes.

3 310 Q. The document makes no reference at all to how it was

4 to be secured?

5 A. Yes.

6 311 Q. Then, I think, if you turn over the page you will

7 see a document from Mr. Traynor to the Bank, and it

8 is the 27th Janua ry 1987 (Exhibit 17):

9"I am returning herewith guarantee

10 form, which I have signed in connectionwith the U.S. $45,000 loan.".

11

12 So this also was guaranteed by Guinness & Mahon.

13 This was a loan, I think, to your son, is that

14 right? For your son's purpose s?

15 A. Em.. .(INTERJECTION).

16 312 Q. If you turn over the page to 127 (Exhibit 18)?

17 A. Yes.

18 313 Q.

19 "Joseph Malone, "

2021 and there somebody has written,

22

23 "Junior"

24

25 A. Junior, yes. Joseph W, yes.

26 314 Q. Yes. You see?

27 A. Yes.

28 315 Q. Do you see it says:

29 "Security: Guarantee signed by GMCT"?

49


125/635

2 A. Yes.

3 316 Q."Security adequate"?

4

5 A. Yes.

6 317 Q. That also was guaranteed?

7 A. Yes.

8 318 Q. In fact, if you turn to the page 130, you will see

9 that this is a letter in April 1987 to Mr. Traynor

10 from your secre tary (Exhibit 19)?

11 A. Yes.

12 319 Q. In Dublin?

13 A. Yes.

14 320 Q."Mr. Malone has asked me to forward the

15 enclosed cheque for U.S.$45,503. Ifyou would lodge against loan which he

16 took out on behalf of Joseph W"?

17

18 A. Yes.

19 321 Q. Can you tell me the circumstances in which that

20 payment was made?

21 A. Because the loan that I took out on behalf of my

22 son, we didn't use the money.

23 322 Q. Yes?

24 A. It was never used. So, it was returned to

25 Des Traynor.

26 323 Q. I see. Where did you get the cash from for the

27 cheque?

28 A. I would have to check that your Honour.

29 324 Q. Would you do that?

50


126/635

1 A. I will, yes, I will.

2 325 Q. If you go back. . . (INTERJECTION)?

3 A. Of course.

4 326 Q. If you would go back some pages to 119?

5 A. 119, Okay.

6 327 Q. You will see that this is a letter addressed to you7

8

on the 11th August 1987. Have you got that (Exhibit

20) ?

9 A. Yes, I have.

10 328 Q. This is a $50,000 loan. Then if you would look at

11 the interest:

12

13

14

"We propose charging interest onthe loan at 2% over the cost to

Guinness & Mahon Limited of takingfunds for the period of the loan."

15 What did that mean to you?

16 A. Well, that means to me that whatever -- in other

17 words that if they got money from The Central Bank,

18 that whatever the cost to them of that amount, they

19 would charge me 2% more.

20 329 Q. Yes?21 A. That is what that meant to me.

22 330 Q. Or if they got money from, if they could use, the

23 deposit, your deposit, in the Cayman Islands, that

24 may have been transferred, in respect of which there

25 was an arrangement, that the money could be used

26 here in Ireland. It could have been your Cayman

27 money, could it not?

28 A. Well, other loans that I have taken out from other

29 banks your Honour, they always say 1% over prime or


127/635

1 2% over prime.

2 331 Q. I see?

3 A. And that would be my understanding.

4 332 Q. I see?

5 A. That was the situation.

6 333 Q. I see. Right. Would you turn to page 132 (Exhibit

7 21) ?

8 A. Yes.

9 334 Q. This is a loan. This is a memoran dum from

10 Mr. Traynor to Mr. O'Dwyer, in April 1987. It is a

11 loan in U.S, dollars of $45,000. Sorry, that is the

12 other document. I am sorry. Would you turn to

13 page 132?

14 A. Yes, I have 132. Yes, your Honour.

15 335 Q. This is an internal credit committee application?

16 A. Yes.

17 336 Q. It is a loan application for US$35,000 for

18 Mr. Malone?

19 A. Yes.

20 337 Q. If you look at the third line of the paragraph :21 "Security is held - funds held by

Ansbacher."?22

23 338 Q. Is it not clear that "Ansbacher's" funds were being

24 used as security for this loan?

25 A. It does now. It does, yes, but I wasn't aware of

2 6 that at the time your Honour.

27 339 Q. Yes. If we could turn to the loan that you referred

28 to at the outset of your evidence, the US$330,000

29 loan from?

52


128/635

1 A. Intercontinent al.

2 340 Q. From IIB?


4 341 Q. If you turn to page 140 please. 140 is it? Sorry,

5 page 40. I am sorry it is at page 40. It is a

6 letter from "Ansbacher" to The Irish

7

8 A.

Intercontinent al (Same Handed) (Exhibit 22)?

Thank you.

9 342 Q. This is a letter from Mr. Traynor to IIB to

10 Ms. Lynch?

11 A. Ye s .

12 343 Q. It is the 9th Decemb er 1991. It is:

13

14

"Dear Siobhan, I have written to youseparately re facility for JosephMalone.

15

16

17

This is to confirm that Ansbacher willguarantee the facility and placeU.S.$350,000 to credit of a separateDeposit Accoun t."

18 Did you know anything about that?

19 A. I did at the time, yes. He told me because he said

20 that -- I remember Des saying that they had entered21 into a relationship with Intercontinental Bank in

22 Ireland and he gave me some reason as to why they

23 couldn't do it through Guinness & Mahon any more.

24 344 Q. Yes?

25 A. Because I think "Ansbacher" had bought over

26 Guinness & Mahon in Ireland I think but that was

27 my understand ing that "Ansbacher" bought over

28 Guinness & Mahon, and "Ansbacher" in Ireland had an

29 arrangement with Intercontinental Bank and that they

53


129/635

1 needed this guarantee.

2 345 Q. As far as this loan was concerned, from IIB,

3 Mr. Traynor told you why it was from IIB and not

4 from Guinness & Mahon?

5 A. Yes.

6 346 Q. Then he told you they needed a guarantee?


8 347 Q. And this was going to be given by IIB?

9 A. That is right.

10 348 Q. If you would just turn to the security letter. It

11 is page 42 (Same Hande d) (Exhibit 23)?

12 A. Thank you.

13 349 Q. The security letter is dated December 16th. It

14 gives the normal paragrap h heading and then if you

15 turn to the second page, page 43, and to Security?

16 A. Yes.

17 350 Q. The security is:

18 "The deposit by the Borrower with IIBof the share certificates... ."?

19

20 A. Yes.21 351 Q. Relating to Jefferson Smurfit?

22 A. Yes.

23 352 Q. There is no reference at all to the fact that the

24 loan was being guaranteed by IIB. Did you notice

25 that -- sorry, it is being guaranteed by

26 "Ansbacher". Did you notice that?

27 A. No, I didn't your Honour.

28 353 Q. Yes?

29 A. No, I didn't, but I thought that all the

54


130/635


131/635


132/635

1 is:

2 "Could you please arrange the transferof US$60,000 to: Chemical Bank..."

3

4 And:

5 "... for credit to the Account ofO'Dwyer & Bernstien. . ."

6

7 And then:

8"...the cost should be debited to

9 Ansbach er Limited A/G U.S. Dollar CallAccount."

10

11 This was in respect of a payment that you had

12 directed to be made?

13 A. That is correct.

14 373 Q. Yes. There was a transfer being made from the

15 "Ansbacher Limited A/G U.S. Dollar CallAccount,"

16

17 and the number is given?

18 A. The number of the account is given, is that what you

19 are saying your Honour?

20 374 Q. Yes. Also the code number "A/G"?21 A. Yes, but I wouldn't have seen this your Honour.

22 375 Q. No, I know that?

23 A. Yes.

24 376 Q. Yes, I know that?

25 A. Yes, I understand. I understand, yes.

26 377 Q. What I am...(INT ERJECTION )?

27 A. Yes.

28 378 Q. What I am suggesting to you Mr. Malone is that it

29 does appear from this letter that the payment which

57


133/635


134/635

1 Mr. & Mrs. Malone?

2 A. Yes.

3 387 Q. And:

4 "The Sterling cost should be debited toAnsbacher Limited Call Account,"

5

6 and it is a different account. It seems to be

7 debiting an account which was used for your

8 purposes, is that not so?


10 388 Q. The 11th March, page 192, there is another transfer

11 of IR10,000 to AIB. It is an account and the

12 (Exhibit 28) number is given. It seems to be the

13 same number as the other one and the "Ansbacher"

14 Limited Call Account with the number, same number,

15 is to be debited?


17 389 Q. Very well. There is a letter then that we have

18 already referred to at page 193 (Exhibit 30)?

19 A. Yes.

20 390 Q. Would you turn to a letter at page 194 of the21 3rd July (Same Hande d)?

22 A. Okay.

23 391 Q."I would be grateful if you would

24 immediately arrange to transfer the sumof US$60,000 to - Bank of Ireland,"

25

26 in New York for the account of yourself and your

27 wife and the debit should be to the US Call Account .

28 The account is again designated with a number and

29 then account "AG". This seems to be your code, does

59


135/635

1 it not?

2 A. It does. It does, your Honour, yes.

3 392 Q. Then there is another letter, on page 195, in

4 Septe mber 1992 (Exhibit 31)?

5 A. Yes.

6 393 Q. In which Mr. Traynor asked Mr. Humphries to arrange:

7 "For collection as soon as possible aU.S. Dollar draft for US$35,000 payable

8 to Mr. J.N. Malone and debit the costto Ansbacher Limited re Poinciana Ltd.

9 No 2 Account."

10

11 Have you heard of Poinciana Ltd.?

12 A. No.

13 394 Q. That account is being used to make the payment which

14 you required?

15 A. Yes, I see that.

16 395 Q. Yes. Apart from the fact it would indicate, these

17 documents indicate, that the coded account was being

18 used to make these payments. It does appear as if

19 you were directing fairly substantial sums to be

20 paid out of your account. Why did you say in your21 statement to us that you did not make any payments ?

22 You said:

23 "I never withdrew funds by cash orcheque from Guinness & Mahon Ireland

24 Limited."

25

26 A. But I thought that my counsel had explained that at

27 the beginning .

28 396 Q. Wel l... (INTERJECTION)?

29 A. At that time, when I made that, I made it in

60


136/635

1 good faith and that was my understand ing

2 but. . . (INTERJECTION).

3 397 Q. No, you are misunderstanding me?

4 A. Sorry. I am sorry your Honour.

5 398 Q. The documents which I have referred you to show that

6 there was substantial payments being made?

7 A. Ye s .

8 399 Q. Out of your account?

9 A. Ye s .

10 400 Q. In Guinness & Mahon here in Dublin?

11 A. Ye s .

12 401 Q. Your statement, which was given to us quite

13 recently, states:

14

15

"I never withdrew funds by cash orcheque from Guinness & Mahon IrelandLimited"?

16

17 A. Yes. I am sorry your Honour. I understoo d that to

18 be the use of deposits by Irish residents in

19 Ireland, that I never withdrew money out of it in

20 Ireland. That is what my understan ding of that was.21 It wasn't that I didn't withdr aw them when I was in

22 America.

23 402 Q. What you were telling us then: You were not telling

24 us that you withdrew funds from your accounts in

25 Guinness & Mahon in Ireland, you were telling us

26 that you did not withdraw them in Ireland?

27 A. That is right. That is what I meant by that

28 your Honour.

29 403 Q. I wonder is even that correct


137/635


138/635

1 from the account here in Guinness & Mahon, these

2 coded accounts in Guinness & Mahon? When did you

3 learn that?

4 A. Well, I learned before the Moriarty Tribunal. The

5 Intercontinent al Bank ones I knew came from Ireland

6 because it came from The Intercontinen tal Bank. The

7

8

other ones I wasn't aware of, came from Ireland,

until I checked my records and found one or two

9 there that went directly to AIB and these ones

10 (INDICATING) I only learned about today your Honour.

11 412 Q. Mr. Malone, it appears that you opened, or

12 Mr. Traynor on your behalf opened, a deposit account

13 in the Cayman Islands around about 1975/76?

14 A. Ye s .

15 413 Q. You were Director General of Bord Failte until 1983

16 and then you were here in the positio n that you have

17 mentioned in Smurfits?

18 A. Ye s .

19 414 Q. It seems as if it was about 1984 or so that you went

20 to Michigan, would that be right?21 A. Yes, late 1983 I got -- I was contracted to go to

22 Michigan.

23 415 Q. Yes. When did you, in fact, take up residence in

24 Michigan?

25 A. I went to New York.

26 416 Q. New York?

27 A. I had a residence in New York.

28 417 Q. When was that?

29 A. Around end of 1983. I went on my own and my family

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1 joined me about a year late.

2 418 Q. Yes?

3 A. Or nine months later.

4 419 Q. From 1975/76 to 1983 you were resident for tax

5 purposes in Ireland?


7 420 Q. Did you return any of the interest that was earned

8 on the Cayman deposits for tax purposes ?

9 A. I am looking into that at the moment because any --

10 what would you call -- any certificates that

11 Des Traynor supplied to me, I paid tax on.

12 421 Q. Yes?

13 A. But now I have engaged a tax advisor becau

Documents

Ansbacher Cayman Report Appendix Volume 9