A €4.1 million loan for Glenlion House in Howth was “never a home loan” and the site had been surveyed for potential development, the multi-million theft trial of former solicitor Michael Lynn has heard.
Mr Lynn (55), of Millbrook Court, Redcross, Co Wicklow is on trial accused of the theft of around €27 million from seven financial institutions. He has pleaded not guilty to 21 counts of theft in Dublin between October 23rd, 2006 and April 20th, 2007.
It is the prosecution’s case that Mr Lynn obtained multiple mortgages on the same properties, in a situation where banks were unaware that other institutions were also providing finance.
The financial institutions involved are Bank of Ireland, National Irish Bank (later known as Danske Bank), Irish Life and Permanent, Ulster Bank, ACC Bank, Bank of Scotland Ireland and Irish Nationwide Building Society.
Mark Mulcahy told the trial that he was introduced to Mr Lynn in the early 2000s when he was the manager of the Irish Nationwide Building Society (INBS)'s branch in Dun Laoghaire.
He agreed with Karl Finnegan SC, prosecuting, that Mr Lynn was introduced as “someone to get to know to do business with”. He said he dealt with several mortgage applications from Mr Lynn between 2000 and 2002, which were repaid quickly.
He said he would have dealt with Mr Lynn during early applications, but as time went on, he dealt more with staff from Mr Lynn's office.
Mr Mulcahy said Mr Lynn called him in late 2006 asking if the building society was lending for residential investment properties. He said he told him the required paperwork and his colleague worked with Mr Lynn's assistant on the application.
Mr Finnegan asked if he believed that the “successful history” with Mr Lynn meant that “you had a good system in place for taking his applications.”
Mr Mulcahy replied: “I would have been happy they would have been honoured”.
He agreed it was discovered later that these properties were not secured in favour of INBS, which wrote off the loans as “unrecoverable debt”.
He agreed he became aware in early 2007 that Mr Lynn and his wife had applied for a residential home loan to buy Glenlion House in Howth.
Mr Mulcahy said he spoke to Mr Lynn about this €4.1 million application and recalled it was initially turned down, but was later agreed.
He said the building society subsequently became aware the loan was not secured on Glenlion House and this debt was also written off.
Paul Comiskey O'Keeffe BL, defending, told the court that up until the Law Society intervened in October 2007 and his accounts were frozen, Mr Lynn had been making repayments on these and other loans.
He asked if Mr Mulcahy was aware Mr Lynn and his wife Brid Murphy never lived in Glenlion, to which the witness replied he didn't know.
“Were you aware – and Michael Lynn says you were aware – that a survey was carried out and two potential development sites were identified on that site?” Mr Comiskey O'Keeffe asked.
“I don't remember that,” Mr Mulcahy replied.
Defence counsel put it to Mr Mulcahy that at the time of the €4.1 million loan for Glenlion House, Mr Lynn's loans with INBS had “exceeded the acceptable level” but that if this was a home loan, it would be within the limits.
“This was never a home loan, you were aware of that. This site had been surveyed for potential development,” Mr Comiskey O'Keeffe said.
“I don't remember that to be honest,” Mr Mulcahy replied.
The trial continues before Judge Martin Nolan and a jury.
