A bank worker who told the theft trial of former rugby international Brendan Mullin that she felt she had no alternative but to sign a €500,000 payment authorisation has denied her account is “fiction” and “nonsense”.
Then Bank of Ireland Private Bank client services director Nicola Johnston told the trial on Friday that the then managing director stood at her desk in July 2011 and told her she didn't need to know anything about the payment authorisation he was asking her to sign.
Mr Mullin, who is accused of stealing over €570,000 from Bank of Ireland Private Bank among other charges, denies all 15 charges against him.
As part of its case against him, the prosecution alleges Mr Mullin, of Stillorgan Road, Donnybrook, Dublin 4, stole €500,000 from Bank of Ireland during a breakdown in communication within various arms of the banking group, with the money ultimately being transferred to a company called Spice Holdings, registered in the British Virgin Islands.
It also alleges he engaged in deception in relation to this transfer by inducing two bank workers – Paul Gallagher and Nicola Johnston – to sign off on the transfer.
On Friday, the Dublin Circuit Criminal Court jury was brought through a chain of events in 2011 in which clients were owed money from different arms of the bank in relation to the pay-out of life assurance claims.
The court heard Bank of Ireland Private Bank and New Ireland Life Assurance – both arms of the bank's wealth management division – reached an agreement to equally split the refund due to the customers, which amounted to about €1 million.
As a result, New Ireland agreed to pay the private bank €500,000 to help pay off the customers, its then managing director, Sean Casey, told the court. Mr Casey said that on July 25th, 2011, Mr Mullin asked him in a meeting if the payment could be sent directly to a special client account, to which Mr Casey replied: “Not a chance.”
Ms Johnston, who was client services director of Bank of Ireland Private Bank at the time in question, told the court that on the evening of July 27th, 2011, Mr Mullin – then her direct line manager – came into her office with a payment authorisation letter for her to sign.
The document, which was shown to the jury, was for a payment of €500,000 from Bank of Ireland Private Bank to Northern Trust in France. The reference on the transfer was 'Spice Holdings', the court heard.
She said Mr Mullin came up to her desk and asked her to sign the payment, but there was no supporting documentation. She said the letter had already been signed by Paul Gallagher, a finance business partner whom Ms Johnston said was standing outside her office door at the time.
Ms Johnston said she told Mr Mullin she was not familiar with the payment, there was no supporting documentation and she couldn't sign it.
“The response I got [from Mr Mullin] was: 'You don't need to know anything about the payment, you just need to sign it',” Ms Johnston said.
“Nothing on that page was familiar to me, other than the fact it was coming from a private bank company account,” Ms Johnston told the court. “None of the recipient details were familiar.”
She added she was aware of Northern Trust, “but I would not have been aware of any reasons why we would be paying any monies to Northern Trust in the course of business”. She said she had never heard of Spice Holdings.
Ms Johnston said after Mr Mullin told her she didn't need to know anything about the payment, he continued to stand over her desk.
“There was an awkward period where we were looking at each other,” she said. “It was clear to me he didn't want to leave the office without having the document signed. So in light of that, I felt I had no alternative other than to sign it.”
She said she thought Mr Mullin also signed the document while in her office, perhaps to give her comfort.
Ms Johnston said that afterwards, she checked the client record system and found out Spice Holdings was not a client. She said signing a document without the supporting documents was known as 'blind signing' and was a sackable offence.
The court heard that she felt extremely uncomfortable about signing the document and that the next morning, she went to the office at 7.30am, retrieved the signed payment authorisation and cancelled it.
Ms Johnston said she then went to Mr Mullin's office and informed him she had done so. She said she told him that if he could supply her with the level of comfort she needed by the payment cut-off point later that morning, then he could come back to her. The court heard Mr Mullin did not come back to her that day.
Ms Johnston said she raised the issue with a number of senior figures within the bank, including Mick Sweeney, whom the jury has heard was head of the Wealth Management Division.
She said the next thing she heard about the transaction was on December 15th that year, when Mr Gallagher copied her in on an email saying Mr Mullin had “got compliance to sign off” on the payment to Northern Trust for onward transfer to Spice Holdings. The court has heard John Murphy, then head of compliance, signed off on the payment in December 2011.
In an email shown to the jury, Ms Johnston responded to this email asking what Spice Holdings had to do with the New Ireland death benefit pay-out, to which Mr Gallagher responded, telling her it was “something of an errors & breaches nature with the New Ireland side” and that they were not privy to the exact details.
Ms Johnston said this explanation “didn't give [me] any comfort whatsoever”. She said she was heavily involved in the New Ireland issue and knew the names of all the impacted clients. “Spice Holdings was not one of those clients,” she told the court.
Brendan Grehan SC, defending, put it to Ms Johnston that her version of events in relation to Mr Mullin was “fiction”. He noted she had no contemporaneous notes outlining what she said occurred at that time.
He brought Ms Johnston through a note written by Kim Lloyd, who was finance officer at Bank of Ireland Private Bank during the relevant period, working in the area of compliance. This note, written at the time of the alleged events, stated that Mr Mullin signed the payment authorisation in the presence of Ms Lloyd earlier that day, at her request.
According to Ms Lloyd, Ms Johnston's signature was already on the document by 12.30pm that day. Mr Grehan put it to Ms Johnston that her account of “burning the night oil” and signing the document later that evening could not have happened.
“My recollection is what I recollect,” Ms Johnston said, saying she clearly recollected the time of day it was.
Mr Grehan said that although Ms Johnston said she had discussions with a number of people in the bank on this issue, there was no record from anyone recollecting this. Ms Johnston said she couldn't vouch for what other people did or didn't do.
Defence counsel said Mr Mullin could not have signed the document in the presence of Ms Johnston when Ms Lloyd had an account of him counter-signing it in her presence earlier that day.
“The whole detail you have of Mr Mullin standing, looking the spectre over your desk is all nonsense,” Mr Grehan said. Ms Johnston replied that she never used those words.
“I'm suggesting it never happened,” Mr Grehan said.
“And I'm telling you it did happen,” Ms Johnston replied.
Mr Mullin has pleaded not guilty to one count of stealing €500,000 from Bank of Ireland (BOI) Private Bank, Mespil Road, Dublin 4 on December 16th, 2011, along with eight other counts of stealing various amounts of money amounting to just over €73,000 from the bank on various dates.
He has further pleaded not guilty to one count of deception and five counts of false accounting. All the offences are alleged to have occurred between July 2011 and March 2013.
Mr Mullin was the managing director of BOI Private Bank at the time of the alleged offences and he is a former rugby international who played for Ireland.
The trial resumes before Judge Martin Nolan on Tuesday, with the jury told the prosecution is likely to finish its evidence on Wednesday.
