US Department of Justice investigates NI loan sale

The sale of Northern Irish Project Eagle to Cerberus is already under investigation by the National Crime Agency following allegations that fees were being channelled to an unidentified Northern Irish politician.

The US Department of Justice (DoJ) is investigating Cerberus’s purchase of a portfolio of Northern Irish non-performing loans from Ireland’s bad bank, the National Asset Management Agency (NAMA), the Financial Times reported.

Neither Cerberus nor the DoJ responded to a request for comment ahead of publication.

The Financial Times reported that the DoJ has sent a subpoena to Cerberus seeking information relating to the deal.

The transaction is already under scrutiny by both the UK's National Crime Agency and a parliamentary committee under the Northern Ireland local assembly. Cerberus is due to appear before the committee at the end of September.

The purchase of the £4.5 billion par value portfolio, dubbed Project Eagle, hit the headlines in July when Mick Wallace, a member of the Irish Parliament, alleged that an audit by Tughans, a firm of solicitors based in Belfast, revealed that a £7 million payment had been channelled into an Isle of Man account controlled by the managing partner of the firm, Ian Coulter.

Wallace disclosed the payment under parliamentary privilege and alleged that it was part of the fees paid to legal adviser Brown Rudnick by Cerberus and shared with Tughans as the local law firm on the deal. He also alleged that the £7 million was intended for an unnamed Northern Irish politician.

Coulter was dismissed by Tughans following the audit in January and the case is subject to an investigation by the Law Society.

Cerberus and NAMA have both denied that they were aware of any payment outside the fees agreed with mandated advisers. NAMA recently submitted a 300-page document to the parliamentary committee investigating the sale.

PIMCO had been the frontrunner in the auction process which Cerberus won with a bid of £1.3 billion in April. PIMCO was represented by Brown Rudnick, a US law firm, and Tughans before it withdrew and the firms began working for distressed giant Cerberus.

In a report to an Irish parliamentary committee in July, NAMA revealed that PIMCO withdrew after the agency expressed concern that part of the fees the asset manager were paying to Brown Rudnick and Tughans included a payment to NAMA’s former Northern Irish advisory committee member Frank Cushnahan, who had resigned from NAMA some months before the deal was completed.