Updated at 5.15pm
Former solicitor Michael Lynn has told his multi-million Euro theft trial that he had permission from bankers to use his mortgage loan money to pay for his property developments abroad.
Mr Lynn (53) spent a second day in the stand at Dublin Circuit Criminal Court on Monday being questioned by his defence counsel.
He told the jury that the banks permitted him to utilise the loan monies for his property developments abroad, adding: “I would have told them that myself.”
Mr Lynn said he was not allowed do what he wanted with the money but that the banks “would have understood it was to purchase a specific site at a present time and repay it”.
He said this practice was going on as far back as 2003, when he had a similar arrangement with Bank of Ireland.
Mr Lynn told defence counsel that these arrangements were set out in emails which he sent to bankers. “I had to do that to protect myself also,” he said.
He said he does not have these emails now.
Mr Lynn (53) of Millbrook Court, Red Cross, 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 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.
Under questioning from Paul Comiskey O'Keeffe BL, defending, Mr Lynn said he conducted all of his business on a Kendar email address and these emails existed until October 2007 on a server.
He said he didn't have access to these emails after that and he requested information from the company liquidator, from the Director of Public Prosecutions and from the banks. He said he only received a redacted response from Irish Permanent.
Mr Lynn gave evidence of his history of lending, starting with the first investment properties he bought in the late 1990s. He said these properties were “flipped” for a profit within a period of months.
Mr Lynn said he was introduced to a process by bankers whereby the mortgage was not signed and no documents were lodged with the Land Registry at the time. He said this process, referred to in court as an 'undertaking only' mortgage, “allowed lending to become quicker, more fluid”.
“I was introduced to these processes by bankers,” Mr Lynn told the court. “I also say I didn't refuse them. I embraced them. I was a young person learning about business.”
Mr Lynn said the registration process could take a year. “If you were in the business model of buying, holding and selling within four months to a year, the registration process would take a long time,” he said.
When buying a property with the intention of selling it quickly, he said he would arrange with the banks that it was undertaker only.
These arrangements were made with senior bankers such as Michael Fingleton, the former chief executive of Irish Nationwide, he said.
When asked by counsel if this arrangement was on the letter of offer from a bank, Mr Lynn said it was not.
“It was a verbal arrangement with specific bankers or people who were senior in the credit committee,” he said.
'Witches' brew'
Giving evidence on the company's statement of affairs documentation that was used to secure loans, Mr Lynn told the trial that each bank he dealt with would have had checks carried out by the Irish Credit Bureau (ICB). “The ICB check was the CCTV system in a bank,” he said.
“...If I was trying to pull the wool over their eyes or take advantage of the bank, their own internal checks were there,” he said.
It is alleged by the prosecution that Mr Lynn provided statement of affairs documentation which purported to be from an accountancy firm, but which was not and which did not set out a full picture of his financial situation.
Mr Lynn said no concerns about his statement of affairs were ever raised with him.
“What I was up to was doing business with the banks and the banks were enabling me and assisting me to do business,” he said.
Mr Lynn said that if he had been trying to put together a “witches' brew”, the banks would have seen this.
“They could see these loans,” he said. “For them now to turn around and say I somehow misled them with my statement of affairs, that I duped them - the ICB check was their security system and I didn't interfere with that because I couldn't.”
The trial continues before Judge Martin Nolan and a jury.
