U.S. bank buying fraud-tainted unit of Allied Irish Banks

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Thursday, Sept. 26, 2002 | 9:40 a.m.

DUBLIN, Ireland -- Allied Irish Banks PLC has agreed to sell its fraud-struck U.S. subsidiary, Allfirst, to M&T Bank Corp. of New York in a deal valued at about $3.1 billion -- but denied that scandal had anything to do with it.

The deal announced today came seven months after AIB chiefs discovered an alleged $691 million fraud at Allfirst by its senior foreign-exchange dealer there, John Rusnak. Rusnak was charged in June with seven counts of fraud.

AIB Chief Financial Officer Gary Kennedy said negotiations with M&T began in October 2001, well before the currency scandal surfaced in February. "The only impact from the Rusnak affair was a time delay. We had to put it on the back burner because of Rusnak," he said.