Lynn trial told details didn’t matter to off icial assessing him for loans
Court hears statement of affairs was a ‘box-ticking exercise’ to some lenders
FORMER solicitor Michael Lynn this week told his multi-million euro theft trial that a Permanent TSB banking official compiled statements of affairs used by the bank to assess his loans.
Mr Lynn, who denies 21 counts of stealing almost €30m from numerous banks in 2006 and 2007, told the jury at the Dublin Circuit Criminal Court, his lenders treated the requirement for a statement of his affairs as ‘box ticking’.
‘I would say that in relation to that period, and in relation to my experience with the banks, it was ticking a box,’ he told prosecution barrister Patrick McGrath SC.
In his second week under crossexamination, Mr Lynn was asked by Mr McGrath if he accepted that it was important for mortgage lenders to receive ‘accurate and truthful’ information on statements of affairs.
‘I would say that – during the period 2003 to 2007 – no,’ Mr Lynn answered.
Mr Lynn was then asked if he believed he could have ‘put anything he wanted’ into the statements of affairs provided to his lenders.
‘Well, this is what was happening during that period. That’s why we landed ourselves in such difficulty,’ Mr Lynn responded.
‘You could put anything you want into it. It didn’t matter?’ Mr McGrath asked again.
‘Well, let’s look at Irish Permanent [Permanent TSB].
‘Ciarán Farrell did my statements of affairs since 2005.
‘Clearly that didn’t matter. He’s the banker. He didn’t even put all the properties into it,’ he said.
Mr Lynn had previously testified that he made what the prosecution called ‘illegal payments or bribes’ to five bankers – including Permanent TSB banker Ciarán Farrell – with whom, he said, he had ‘special arrangements’.
In direct evidence to the court, Mr Lynn said these arrangements permitted him to use his borrowings for developments abroad, even though they had not been advanced for this purpose.
Under cross examination, Mr Lynn told the court he had reached a ‘state of relationship with his bankers’ that meant the details of his loan applications were not ‘paid a great deal of attention’.
‘That’s the truth,’ he told Mr McGrath. ‘You may not like it but that’s the truth. When I went to buy my first house, I guarantee you it would matter.
‘But when you reached a certain level, it was about the loans and they were well aware of where the revolving facilities were going and they also were well aware… of my net worth,’ he said.
Mr Lynn was asked if he kept his lenders ‘fully informed’ of the way that he was repeatedly borrowing from different banks, against the same security.
Mr McGrath walked Mr Lynn through various examples of this – one of which involved four loans secured with different banks against 16 Bessborough Avenue in Dublin’s North Strand.
The court heard the first loan relating to this property – from Ulster Bank – was secured by Mr Lynn in October 2006.
‘Less than two months later, you take out a loan on the same property with Bank of Ireland mortgages.
‘Isn’t that correct?’ Mr McGrath asked. ‘That’s correct,’ Mr Lynn told the jury.
‘Did you tell your contact persons there – the person you were doing secret deals with – did you tell that person you had a mortgage with
Ulster Bank on this property already?’ Mr McGrath asked.
‘I would have told them that there was an undertaking out in relation to Ulster Bank, yes,’ Mr Lynn responded.
‘And did you tell them you had received the mortgage money in relation to Ulster Bank already? Mr McGrath followed up.
‘Yes, I would have,’ said Mr Lynn.
‘And did you go back to Ulster Bank and tell them, “I’ve now gone… and taken out another loan with Bank of Ireland Mortgages”,’
Mr McGrath asked. ‘Yes I would,’ Mr Lynn told the court. ‘The answer is yes.’ Mr Lynn was then asked about a Bank of Scotland loan, secured on the same property, and whether he told the bank about the previous two loans to other institutions. ‘When it came to Bank of Scotland Ireland,’ asked Mr McGrath, ‘did you tell them?’
In response, Mr Lynn said it had been standard practice for his company at the time.
‘This was going on since 2003, as I said in my evidence.
‘This was not new. Unfortunately that was custom and practice between ourselves and the banks and it was standard for many within business at that time,’ he then responded.
Mr Lynn was then asked by Mr McGrath about a fourth loan on the property, secured with Permanent TSB and which Mr Lynn testified had been organised for him by Ciarán Farrell and Martin Huggard.
The court previously heard that Mr Huggard – who Mr Lynn did not make any side payments to – was also aware of the secret lending arrangements that were then afforded to Mr Lynn by Permanent TSB.
‘Did you say to these two gentlemen, “I’ve got a loan on the security of this property with Ulster Bank in October 2006, I have a loan on the security of this property with Bank of Ireland Mortgages in December 2006 and I have a loan in relation to this property with Bank of Scotland Ireland in March 2007?”’
‘The answer is yes,’ Mr Lynn responded.
‘I would have discussed it with them and the ICB [Irish Credit Bureau] check in each of the banks would have revealed the loans with the others.
‘All of the banks were aware of this, Mr McGrath. It was no mystery,’ he added.
Mr McGrath then put it to Mr Lynn, ‘Your evidence is that these people, fully informed of all your dealings, were happy to advance you money, aware that three other mortgages had been given to other institutions?’
To which Mr Lynn replied: ‘Absolutely, yes – that’s my evidence.’
Mr Lynn was also asked under cross examination this week about
‘You may not like it but that’s the truth’
‘That was custom and practice at the time’
‘This is a pack of lies about secret deals’
the testimonies from two of the prosecution witnesses, Fiona McAleenan and Liz Doyle.
Ms McAleenan worked as a solicitor in Mr Lynn’s practice and Ms Doyle was his personal assistant and a legal executive.
Mr Lynn this week told the court that both women had been aware of his secret deals with bankers.
When asked why he had never put this to them when they were each giving evidence for several days, Mr Lynn said he did not do so because he did not want ‘to bring down other people’.
Mr McGrath then told the court that it was the State’s contention that ‘this is a pack of lies about the secret deals’.
He asked Mr Lynn: ‘When you entered into these secret deals, according to your dishonest evidence, with these individuals in the banks, did you ever consider whether they were authorised by the bank to allow you to do this?’
‘Each of the banks said it was okay,’ Mr Lynn replied, although he agreed that, as a solicitor, he should have checked.
Mr Lynn’s wife, Bríd Murphy, also gave evidence this week, about the arrest and detention of her husband in Brazil in 2013 before he was eventually extradited to face trial in 2018.
The trial – now entering its 15th week – continues on Monday before Judge Martin Nolan and a jury.