Banks ‘fully aware’ of lending purposes – Lynn

Former solicitor Michael Lynn has rejected a suggestion by prosecuting counsel in his trial that it is implausible that bank employees were part of a “conspiracy to ignore normal lending practice” in relation to his borrowings.

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 23 October 2006 and 20 April 2007.

It is the prosecution’s case that Lynn (pictured) obtained multiple mortgages on the same properties, in a situation where banks were unaware that other institutions were also providing finance.

Conspiracy ‘implausible’

Karl Finnegan SC, prosecuting, put it to Lynn during cross-examination yesterday (14 December) that it was “implausible” that the bank employees who had given evidence during the trial, along with other bank staff, were involved in a “conspiracy to ignore normal lending practice” in terms of lending to him, which Lynn rejected.

He then suggested that Lynn first gave an account of secret deals with bankers when giving evidence during the last trial.

Lynn disputed this. He said that he had a “secret deal” with former Irish Nationwide Building Society (INBS) CEO Michael Fingleton and “off-the-book understandings” with other banks.

Lynn agreed that he had told the first trial that the “wrong bankers” had been called to give evidence, and also gave a list of people he said were aware of the “off-the-book understandings”.

Finnegan noted that the bank employees who had given evidence during this trial had denied having any knowledge of off-the-book understandings and, where relevant, the allegations made by Lynn against them personally.

“There isn’t one banker who has come in to explain what happened. I’m not surprised by that. I’m disappointed they couldn’t have told the truth,” Lynn said.

Fingleton memo

Finnegan noted that Fingleton was not present as, he said, it was “well-known” that he had been unable to attend his own legal dealings before the courts for health reasons.

Finnegan suggested to Lynn that a memo of understanding that he claims to have signed with Fingleton in 2006 does not exist. Lynn rejected this, saying that he had not received a copy, and had been unable to obtain one.

Lynn agreed that he was advised by Fingleton in 2008 to leave the jurisdiction for a year or two.

“Mr Fingleton was a significant powerhouse in Irish business at that time ... he was a significant person in my life and was deeply concerned [that], if I went and gave certain evidence, that it would affect him.”

Bank employees

Lynn said “no one would have believed” him if he had told them in the late 2000s about his arrangements with the banks.

Finnegan suggested that Lynn's position was that the bank employees who gave evidence were lying. Lynn agreed.

Prosecuting counsel then put it to him that: “The lies told in this courtroom have been by you,” which Lynn also rejected.

Finnegan contended that Lynn was “prepared to blame anybody else” and had “named numerous names, maligned their characters and integrity to save your skin”.

Lynn said that he had tried to put forward his defence: “You have accused me of stealing from banks where there is a history of receiving money and repaying it in a certain way.”

Finnegan suggested to Lynn that the case all boiled down to “what the banks believed and what you led the banks to believe”. Lynn denied this.

Banks ‘consented’

Finnegan put it to Lynn that it didn’t matter “one jot” whether or not he believed his overseas property developments were going to repay the loans in question, since the case against him was that “he misled the banks”.

“I didn’t deceive the banks. They were fully aware of the purpose for which the money would be used, and they consented,” said Lynn.

Finnegan suggested that Lynn had “used and abused” his good relationship with the banks and his standing as a solicitor, as he was “desperate to get money abroad, where you could eventually make your millions”.

Lynn rejected this and re-iterated his direct evidence that he had consent from the banks to take out mortgages and use the money overseas.

Finnegan asked Lynn about the decision to expand his development business abroad, and asked whether “greed got the better of you?”

While Lynn agreed that he got greedy, he continued: “I would say all of us – including bankers – were carried on a wave of property speculation. I wasn’t alone. None of us thought property would go down.”

‘Permission and consent’

Earlier on Thursday, Lynn told his defence counsel Paul Comiskey O'Keeffe BL that he intended at the time to repay the entire €27 million in loans from property development abroad, its profits, and the sale of commercial assets within one or two years.

Lynn said that he couldn't use his foreign assets as security for these loans as the “only way Irish banks could fund me was through undertaking-only mortgages”.

Lynn said that he had the permission and consent of the banks: “I admit I’m many things and let myself down in many ways, but I’m not a thief. I had no intention to deceive or steal money from any banks.”

During re-examination, Comiskey O'Keeffe put it to Lynn that there were more practical consequences in case of a default for a high-net-worth individual, which his client agreed with.

Lynn also said that he had given an interview in 2009 to a journalist, in which he outlined the defence he has put forward during the trial.

The trial continues before Judge Martin Nolan and a jury.