Mr Des Traynor repatriated up to £3 million sterling in offshore funds in 1993 to avail of the tax amnesty, the Moriarty tribunal heard yesterday.
The funds were held in three currencies with Bank of Ireland in non-resident accounts under the names of Tara Securities Ltd and Penta Investments Ltd.
An internal bank memo from December 1993 showed the bank had "suspected" the funds' real beneficiaries were Irish residents but "this was never divulged until announcement of recent amnesty".
Mr Andy Brennan, senior manager of the BoI's private banking branch and author of that memo, said the bank's "suspicions were somewhat allayed" by non-residency declarations from Mr Traynor and because the funds had come from non-resident accounts at Irish Intercontinental Bank, thereby bypassing exchange control regulations.
The funds had been transferred to BoI in July 1993 into six deposit accounts. Three were in the name of Tara Securities Ltd and had opening balances of 1.7 million deutschmarks, £375,000 sterling and $408,427. The other three were in the name of Penta Investments Ltd and had opening balances of £500,000 sterling, DM1.1 million and $231,098.
All the deposits were converted to sterling in September 1993 on Mr Traynor's instructions and invested with a long-term global fund portfolio at IBI, BoI's Isle of Man-based investment branch.
Two months later, Mr Traynor said he wanted to cash in the IBI global funds and transfer the proceeds to an Ansbacher account at the Royal Bank of Scotland in London, and then to accounts in the names of Tara and Penta at Cayman International Banking Trust Ltd.
Mr Brennan said the reason Mr Traynor had given in both cases was to take advantage of the tax amnesty. He said Mr Traynor had indicated that the deposits would go back to the bank again after clearance from the Revenue.
Mr Brennan said he first dealt with Mr Traynor in late March 1992, when the Ansbacher banker said he wished to assist a client of his and BoI with a loan. Mr Traynor offered to back the loan with a cash deposit and for Ansbacher Ltd to guarantee it.
Mr Brennan said the unnamed client was an Irish resident of "undoubted character and financial standing" who wanted the loan "in somewhat of a hurry".
Then an account in the name of Ansbacher Ltd was opened with BoI's international banking division with £210,000 sterling on March 31st 1992.
Further accounts were opened by Mr Traynor in the names of Poinciana Fund Ltd and World Wide Management and Consultancy Services Ltd, two other Cayman Island companies.
Mr Brennan said the bank had unsuccessfully attempted to obtain consent from the directors of the latter company, along with Tara and Penta to give information to the tribunal. The Cayman-based directors had refused to allow disclosure.
