* Sean FitzPatrick arrested on Thurs in fraud investigation
* Probe into Anglo directors' loans, short-term deposits
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By Padraic Halpin
BRAY, Ireland, March 19 (Reuters) - Police released Sean FitzPatrick, former chairman of Anglo Irish Bank, without charge on Friday after a day's questioning in a complex fraud investigation that is set to continue for months.
Officers arrested FitzPatrick, 61, after an early morning search on Thursday as part of the probe into events preceding the bank's nationalisation last year.
A Reuters reporter at the police station in Bray, a seaside resort south of Dublin, said FitzPatrick was driven away in a Volkswagen Golf as one bystander shouted "gangster".
Asked if FitzPatrick had been released without charge, a police spokesman said: "At this point, yes. A file will be prepared for the director of public prosecution."
FitzPatrick, who was CEO at Anglo Irish Bank before becoming chairman, said in December 2008 he had kept shareholders in the dark for years about loans worth 84 million euros he had received from the bank, which was nationalised in early 2009.
The regulator has also been investigating whether Anglo Irish used more than 7 billion euros of short-term deposits from bancassurer Irish Life & Permanent to mask large customer deposit withdrawals.
"It's been a very lengthy investigation ... and I'd say there is quite a bit to go, just because the matter is so complicated," said Blanaid Clarke, who teaches law and corporate governance at University College Dublin.
Friday's Irish Times newspaper said more arrests were expected as part of the investigation, but analysts said it would be difficult to gather enough evidence to criminally convict anyone.
"Arresting the man is the easy part and I am surprised that it took this long," said Sandeep Gopalan, law professor at the National University of Ireland, Maynooth. "The real question is whether the prosecution has the nous to get a conviction," Gopalan said in a blog. (Writing by Andras Gergely; Editing by Hans Peters and David Holmes)