Court hears bankers deny Lynn’s claim of loan cash repayments
Conf licting testimonies at trial of solicitor on 21 charges of theft
SOMEONE in Court 22 – either the witness or the accused – is lying.
Dressed in a smart, blue suit and open-necked white shirt, former Ulster Bank relationship manager Stephen McCarthy has been sworn in and is being cross-examined.
Three steps below him in the dock, the accused, Michael Lynn, looks straight ahead, holding a steadfast, square-chinned frown.
Both men – the former solicitor on trial for stealing millions from financial institutions and his one-time banker – are separated by metres. But their testimony is poles apart.
From their raised platform across the room, the jury listens raptly as defence barrister Paul Comiskey O’Keeffe reads a transcript from Mr Lynn’s first, inconclusive trial.
They learn that, on May 22, 2022, Mr Lynn told his original trial he had made cash payments to bankers, including Mr McCarthy.
‘Bankers received payments over a period of time,’ he previously testified. ‘They saw you making money – they wanted to make some money as well.’
After reading the transcript, Mr Comiskey O’Keeffe then asked Mr
‘They saw you making money’
‘Unusual that sort of situation would happen’
‘Someone else was going to take the blame’
McCarthy if he disputed this.
‘Absolutely, categorically, 100%. I can’t be more emphatic about that,’ he answered.
Mr Lynn did not flinch as Mr Comiskey O’Keeffe repeated his question.
‘Your position is you never got money from Mr Lynn?’
‘How many times do I have to say it – correct.’
Mr McCarthy was present to testify about his knowledge of a €3.65m Ulster Bank loan to Mr Lynn in 2007.
The loan is the subject of one of the 21 charges of theft from seven banks, amounting to more than €27m, that Mr Lynn is facing.
Mr Lynn, 55, a former property developer and solicitor with an address in Arklow, Co. Wicklow, has pleaded not guilty to all counts.
Another Ulster Bank official, John Morgan, was asked by the defence about loan arrangement fees the bank had waived for Mr Lynn. Mr Morgan, who worked in Ulster Bank’s legal unit, is not one of those Mr Lynn has alleged were paid cash.
‘Is it normal or acceptable for a bank officer to accept arrangement fees in cash off-premises?’ Mr Comiskey O’Keeffe asked. ‘No,’ replied Mr Morgan.
‘Was there a policy in relation to the collection of arrangement fees?’ Mr Comiskey O’Keeffe asked.
‘There may be,’ answered the witness. ‘I would find it unusual that that sort of situation would happen.’
Prosecution barrister Karl Finnegan objected, leading to a rebuke for the defence from judge Martin Nolan.
‘You’re implying dishonest and underhand behaviour,’ Judge Martin Nolan said. ‘And there’s no way around that when you ask that question. It is a pejorative question and you know the rules around that.’
On Wednesday and Friday, former Irish Nationwide Building Society (INBS) internal auditor Killian McMahon gave evidence via video link from San Francisco. He testified about a €4.1m INBS loan to Mr Lynn and his wife Bríd Murphy for Glenlion House in Howth, Dublin.
Like all 11 banking officials appearing this week, Mr McMahon testified this loan would never have been advanced if INBS knew it would not be registered against the property concerned – and that other banks had already lent against the same asset.
The defence asked Mr McMahon about ‘secret deals’ Mr Lynn claims to have had with some bankers – including former INBS boss Michael Fingleton.
Mr Comiskey O’Keeffe began: ‘Mr Fingleton had such a deal with Mr Lynn in relation to a development in Portugal… the intended ownership would have been in trust.’
In response, Mr McMahon said he knew nothing about this.
The defence then demonstrated a copy of INBS board resolutions, which delegated widespread power to Mr Fingleton.
This included the power to ‘vary and alter interest rates, fees, terms, conditions of all loans whether secured or unsecured’ and to ‘make arrangements with individual borrowers, investors and depositors’.
The defence asked Mr McMahon if he, as internal auditor, had visibility of how Mr Fingleton had exercised these powers.
‘No, that would be very difficult to ascertain,’ Mr McMahon said.
On Friday, former INBS underwriter Olivia Greene told the court that Mr Fingleton had personally approved the Glenlion loan.
She testified that afterwards, when news of Mr Lynn’s multiple loans on the property broke, Mr Fingleton told her that: ‘Someone else was going to take the blame for it.’
Also called to give evidence this week was former senior business manager with Bank of Ireland (BOI), Jim Madden.
Mr Madden, whose nose was bandaged in white strapping, gave evidence relating to a 2006 BOI loan for €2.7m provided to Mr Lynn.
Mr Madden, like all banking witnesses this week, denied he and his bank had been negligent in their assessment of the loan.
He also denied, under cross-examination, any knowledge of previous BOI loans that Mr Lynn had failed to secure – before the 2006 loan before the court was approved.
The issue of loans not being secured against properties is central to the prosecution case, the court has repeatedly heard.
Mr Lynn’s defence is that his loan applications were a ‘charade’ as bankers were complicit and knew the funds advanced were never going to be secured or used for the stated purpose.
Mr Madden’s denial that he was aware of any instances of pre-2006 loans not being secured was challenged by the defence via the use of internal bank records.
These files included a March 2004 email between two BOI executives, in which prior instances of Mr Lynn failing to register mortgages were highlighted.
The defence singled out an internal email between BOI officials, from 2007, when news of Mr Lynn being struck from the Law Society register was breaking.
‘Back in 2004 we highlighted to you that this solicitor was not registering their ownership of the properties and also that the bank’s mortgage was not being registered,’ one BOI official told another. Mr Comiskey O’Keeffe asked Mr Madden if he’d been aware of these 2004 issues when he approved the 2006 loan before the court.
‘No,’ replied Mr Madden.
The trial continues next week.