Allied Irish Banks (AIB) have fallen victim to a $81 million (£56 million) alleged fraud according to a report from the Serious Fraud Office (SFO) released on Thursday.
The Serious Fraud Office and City of London Police raided an office and two homes in central London but no arrests were made. AIB said it was considering legal action to recoup the lost money.
This is the latest big fraud to be exposed since the beginning of the financial crisis, with news on Bernard Madoff and Allen Stanford hitting the headlines.
According to the SFO, the fraud involved loans provided by Allied Irish Banks between 2003 and 2007 on property purchases. It turned out that supposed guarantees from a blue chip property company supporting the loans were fraudulent, the SFO said.
The fraud involved faking high levels of rents and longer leases than were actually being paid.
The fake details ramped up the value of the properties and enabled the fraudster to borrow far more than was necessary to buy the buildings and pocket the difference.
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