February 16, 2011
By Staff Reporter
By Susan Falvella-Garraty
BALTIMORE — Linda and John Rusnak were considered pillars of the community. Churchgoing, concerned about their two children’s education. Indeed, living in a nice section of the city just a light rail ride away from Rusnak’s office at the Allfirst Bank in downtown Baltimore, they seemed to have it all. That was before news that John Rusnak compiled some of the largest rogue trading debts ever for a subsidiary of Ireland’s largest business concern: Allied Irish Bank.
Last week, the couple’s Victorian-style 19th Century single-family yellow clapboard home was surrounded by police, who mostly keep reporters off private property, while the FBI questioned John Rusnak on just how he garnered a $750 million loss for his employer, a subsidiary of Allied Irish Bank. Neighbors describe a family man with a wife and young children with a Jeep, not a Rolls Royce, as the family car.
Bank officials here stressed repeatedly during a midday news conference last Wednesday, Feb. 6, that Rusnak was a model employee.
“Up until Monday, he was an employee of good standing,” said Allfirst bank CEO Susan Keating. “He did not show up for work, and we made an effort to find him, and were unsuccessful, and at the same time we were trying to reach out to John Rusnak, we were looking more closely at his transactions.”
Red flags alerted bank employees to the trader’s mounting losses, but officials seemingly had enough confidence in their employee’s ethics that they shared their concerns. It gave Rusnak enough time to make himself scarce. He hired an attorney, David B. Irwin, and negotiated with the FBI and bank officials before revealing his whereabouts late in the day on Wednesday.
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Rusnak’s attorney steadfastly maintained that his client is not a fugitive and that there would be an explanation of the trader’s actions.
Neighbor Chris O’Neill described Rusnak as a low-key family man who would borrow tools as he renovated his home a few years back.
“He never looked to be someone with huge amounts of cash or anything,” O’Neill said in an interview on his doorstep that looks directly upon the Rusnak’s home.
“This isn’t a really close neighborhood, but I think you would know if someone had that much cash.”
The couple’s young children were escorted by Linda Rusnak to the close-by parochial school, Shrine of the Sacred Heart each school day. The playset and doll house sat unused last week while reporters staked out the home. A local TV station dispatched its helicopter, which circled the Rusnak’s at the height of the mystery — before attorneys said the trader had been in contact with the police and was not a fugitive.
There was a slight tone of understanding from Pat Ryan, Allied Irish Bank’s group treasurer, who was sent from Dublin to help conduct the investigation even as he described the fraudulent work Rusnak is accused of conducting over the last 12 months of foreign-exchange trading.
“Traders always like to have bigger limits, and there’s always a certain tension with management on agreeing to the limits,” Ryan explained when asked how Rusnak’s loses could go unnoticed for so long, “and when it goes a little bit outside that range then you ask if there’s something else at play here.”
Bank officials most certainly wish they had asked a bit earlier if there was something going on with Rusnak, and auditors of the bank will likely have to answer inquiries as to how they missed the massive numbers involved in the case.