Former solicitor Michael Lynn was introduced to Bank of Scotland Ireland by Michael Fingleton, the chairman of Irish Nationwide Building Society, his defence counsel has told his multi-million-euro theft trial.
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.
During cross-examination of Bank of Scotland Ireland worker Tom Brennan on Thursday, Mark Lynam SC, defending, suggested that Mr Lynn “was introduced to the bank by the chairman of another bank, Michael Fingleton”.
He said it is the defence's case that Mr Fingleton was his client's “personal banker” and when he “couldn't approve a loan” for Mr Lynn because he was on holidays, contact was instead made with senior staff at Bank of Scotland Ireland. Mr Brennan said he wasn't aware of this.
Mr Lynam said it is his client's case that “it was inevitable he would get these loans,” as “there was an understanding he was a high-value client,” and that there was to be “flexibility” in that loans would “not be strictly enforced like other clients of the bank”.
Mr Brennan replied: “This was not my understanding.”
Direct evidence
In his direct evidence, Mr Brennan told John Berry BL, prosecuting, that he met with Mr Lynn in April 2006 about a potential mortgage application, which didn't proceed. He said another proposal was made in November 2006 in relation to offices at Capel Street and 10 residential properties.
An offer letter for €3.5 million was issued by the bank to Proper T Capital Ltd in January 2007 and returned signed by Mr Lynn and his wife Brid Murphy, who were directors of this company. The terms and conditions of this offer included a requirement for the first legal charge (FLC) on the properties.
Mr Brennan said he was not aware Mr Lynn sought finance from other institutions in relation to these properties and the application wouldn't have gone ahead if he was aware that finance had been provided by others to Mr Lynn or Proper T Capel Ltd.
Mr Brennan confirmed he was aware of the publicity surrounding Mr Lynn in October 2007.
During a meeting at this time, he said Mr Lynn told him, “he would be sticking around to deal with the issues". He recalled Mr Lynn said it was a “misunderstanding”.
Mr Brennan confirmed that the bank had obtained FLC over nine of the ten properties.
Mr Lynam suggested to Mr Brennan that the statement of affairs “wasn't crucial” as Mr Lynn had a “relationship with the bank” or individuals within it who were “eager” to provide loans and there was “knowledge in the bank that he would use the loans for other purposes”.
The witness said he couldn't speak for anyone else, but that the statement of affairs was “important to me”.
Mr Lynam also put it to the witness that his client had previously taken out loans with the bank and repaid them where the title was not registered. Mr Brennan said he was not aware the FLC was not registered for these properties.
During re-examination, Mr Berry said it had been suggested to Mr Brennan that Mr Lynn had “carte blanche to do what he wanted to do with the money” due to his existing relationship with the bank.
He asked, “Was it your understanding that the process you engaged in was a façade or charade to allow Mr Lynn to get money?”
Mr Brennan said he would have expected Mr Lynn to “point me to my superiors”.
Mr Berry then asked if Mr Lynn mentioned to him during the meeting in October 2007 that it was “all a charade”. He replied he “never mentioned it”.
Retired National Irish Bank worker, Nicholas Robert Hamilton gave evidence that the bank approved loans for Mr Lynn to purchase property in Dublin, not abroad.
It was put to him that Mr Lynn said they met in 2007, which he denied. Mr Hamilton said he “never met” Mr Lynn, adding, “the first time I saw him was in court last year at the initial trial.”
When asked if he was aware of a secret deal between Mr Lynn and National Irish Bank to allow monies to be used abroad, Mr Hamilton said he had “no idea what he is talking about”.
Paul Comiskey-O'Keefe BL, defending, put it to Mr Hamilton that the defence says he met with Mr Lynn and was aware that the money was going to be used in relation to his client's property business abroad.
Mr Hamilton replied: “No, I never met Mr Lynn and never knew about using money abroad.”
He said he didn't review or assist with the collection of documents for gardaí and was not asked to remove or delete information from the bank's internal systems.
Mr Hamilton also told Mr Comiskey-O'Keefe that he didn't recall approving the loan, but his former manager told him he had when they spoke “at the end of the trial last year”.
He said she rang him and they had a “general conversation about the loan” to Mr Lynn, during which she mentioned she thought he'd approved it.
The trial continues before Judge Martin Nolan and a jury.
