'Rogue trader' claims innocence

THE 'rogue trader' accused of stealing £500m from his bank has turned himself in to the FBI. John Rusnak met voluntarily with the FBI and federal prosecutors in Baltimore after being suspected of instigating bogus deals at Allied Irish Banks' US subsidiary over the past 12 months.

Following reports that he had gone into hiding, Rusnak's lawyers today denied that he had ever gone on the run. Bruce Lamdin said: 'My client is not a fugitive. We hope that things will take their natural course from here. That's up to the US attorney's office.'

Rusnak, 37, had not been seen at his home in Baltimore, Maryland, since AIB revealed on Wednesday that its US subsidiary had reported the suspected massive fraud.

AIB was told on Monday that its American subsidiary Allfirst had uncovered huge losses in its foreign currency department. Rusnak, a church going father-of-two, was one of two traders working at the bank's headquarters. He is accused of hiding the losses over a year by using fake trades.

His lawyer said that he had remained in contact with him and denied that he had stolen the money. Another of Rusnak's lawyers said the matter would soon be sorted out. 'If they're claiming that he stole money, that won't pan out,' said David Irwin, adding: 'I'd be surprised if they ever came up with evidence that he stole money. There are no charges. There is no warrant. And this will all take care of itself in the normal course.'

However, AIB's chairman Lochlann Quinn said in Dublin that there was 'considerable evidence' of external and internal collusion over the fraud. In the US, Allfirst's chairman Frank Bramble accused Rusnak of carrying out a lengthy fraud. 'At this point this is what appears to have been a very sophisticated and well-thought out fraud on this individual's part,' he said.

At least four members of the bank's staff are reported to have been suspended, including Matthew Kozak, the vice-president of foreign exchange and the only other trader in the department.

The losses are the worst since Nick Leeson brought down Barings Bank by running up losses of £862m on unauthorised dealing in derivatives. AIB says that the losses are not serious enough to threaten its solvency.

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