allied irish bank sues 2 us banks

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    Bank sues over $700m fraud

    Allfirst was brought to its knees by the fraud
    Allied Irish Bank, which lost more than half a billion dollars after one of its employees embroiled himself in a rogue trading scheme, is suing two other banks it accuses of helping him carry out the fraud.
    In 2002 John Rusnak - a foreign exchange trader at Allfirst Bank, a US subsidiary of AIB - was discovered to have hid more than $690m (£420m) in losses by forging a paper trail that made them appear to have been balanced by other trading.

    Rusnak is now serving a 7-1/2 year jail term after he admitted his part in the fraud, which lasted from 1997 to 2001.

    But in its suit filed in the Manhattan Federal Court on Friday, AIB is claiming $500m in damages from Citibank and Bank of America for allegedly assisting him by letting him pass massive trades through brokerage accounts they opened for him.

    These accounts, AIB alleges, were the means by which its huge losses were incurred.

    Both Citi+BOA are big gold derivitives holders.
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