Ex-solicitor was facing a 12-year bankruptcy period

Former solicitor Michael Lynn has told his multi-million-euro trial that, while in jail awaiting extradition from Brazil, he saw a prisoner beheaded by other inmates.

Mr Lynn (53) continued giving evidence at Dublin Circuit Criminal Court yesterday (12 May). He described what life was like in a Brazilian prison after his arrest in August 2013 in Recife, a coastal city in north-east Brazil.

He said that the jail where he was held was beside a dump – "a very big dump with rats so big, even the cats ran away from them," he told defence barrister Paul Comiskey-O'Keeffe, BL.

Mr Lynn said that prisons in Brazil were essentially run by the inmates.

“When I went in, the first three nights I was in a tiny cell shared with 30 other guys,” he said. “That was kind of a holdover prison. You are not given any bowls to eat [from] or utensils to eat [with].”

Like something from ‘Game of Thrones’

Asked about prison security, he replied: “The security is as follows: there were 1,800 prisoners and ten security guards. The prisons are run by prisoners.”

In the jail where he was detained, he said he was moved to a part of the complex where they held people who had degrees, such as “lawyers and accountants”.

Certain prisoners run the prison, he said, and were given a gun and what he described as "large swords".

"It's like something from Game of Thrones," he told Judge Martin Nolan, adding that violence was commonplace.

“There were breakdowns, there were rebellions,” he said. “I saw people being killed. I saw once a decapitation of a young man whose only sin was that he was gay. I don't mean [being gay] was a sin, but that's how it was seen over there. It's extremely macho, and all that malarkey, over there.”

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 23 October 2006 and 20 April 2007.

Multiple mortgages

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.

On his fourth day of being questioned by defence counsel, Mr Lynn said that he first went to London after he failed to appear at the High Court in Dublin in 2007. 

Before that, he said he had meetings with bankers and with Grant Thornton to analyse his assets in Ireland and elsewhere “to see if we could find a commercial solution” to his financial problems. He said he was advised that, if he went bankrupt in Ireland, he was facing bankruptcy for 12 years.

He said that he talked to solicitors and to Michael Fingleton, then chief executive of the Irish Nationwide Building Society, and to Sean FitzPatrick of Anglo Irish Bank.

‘Very concerned’

"They were very concerned, and I was also very concerned in terms of myself having a future," said Mr Lynn. 

He said he had a house rented in London, and he could go bankrupt in the UK for a shorter period than in Ireland, so he went there. He said he hoped that it would “allow things to settle and resolve themselves”.

The court heard that, in February 2008, Mr Lynn moved to Portugal and continued living there with his wife Brid until June 2011.

He told the court he had first gone to Brazil in 2005 because there was a “natural business connection between Brazil and Portugal”.

He said his accountant friend in Portugal introduced him to a good friend in Sao Paulo, where he lived with his wife for eight months.

Hitherto, the couple had been unable to conceive, despite IVF treatment, the court heard. But, in Sao Paulo, he said they were more fortunate and had a boy.

Mr Lynn said they did not like the size of the city, however, and so moved to Recife, a smaller coastal city where, with investors, he became involved in property in nearby Cabo de Santo Agostinho.

Teaching English

He said he got a salary from this, and also earned money from teaching English.

When he was arrested, his wife was expecting again and was seven months’ pregnant, he told the court. He resisted extradition initially, he said.

“I needed to give time for Bríd to give birth,” he told Mr Comiskey-O'Keeffe.

He said he hoped to get bail and spent time with his children, but bail was denied.

Conjugal visits

However, he said conjugal prison visits were allowed, and they had two more children in Brazil.

“Brazilian prisons are very difficult for everybody,” he said. “Conjugal visits exist to maintain peace in what is, essentially, a war zone.”

Lynn described how he went about trying to build the non-Irish side of his property and development business, and returned to the subject of his relations with bankers.

He described entertaining bankers in the following terms, giving as an example his relationship with a named individual in Allied Irish Bank. 

Paid for banker’s holiday

He said that he paid for flights and hotels for this individual and his daughter, to visit Portugal and Hungary.

"Bankers expected benefits in kind," he told the court. "The way business was done … They [the bankers] saw you were making money and they wanted some in turn."

He was asked if bank officials bought apartments from him, and Judge Nolan intervened.

"You are saying individual bankers received money from you or your companies, directly from you and not through their bank?" he asked.

"Absolutely, judge," replied Mr Lynn, adding that, in 2022, that might seem odd. 

"But during the Celtic Tiger," said Mr Lynn, "I was in my 30s and you were vying for position with the banks. When I look back, you wonder who was riding on the coat tails of who."

The trial continues.