Solicitor described herself as ‘partner’ on form

A Bank of Ireland worker suggested that Michael Lynn should be referred to the Law Society back in 2004, his trial has heard.

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 obtained multiple mortgages on the same properties, in a situation where banks were unaware that other institutions were also providing finance.

In relation to Bank of Ireland, Lynn is accused of stealing €2.7 million from that institution in December 2006.

Insurance claim

Arthur King of Bank of Ireland returned to court on Friday (24 November) to be cross-examined by defence counsel. The court heard that he was involved in compiling documents for the bank's insurance claim in the wake of its losses in relation to Lynn's loans.

The court heard that Bank of Ireland received a €4.5 million payment from its insurance company in September 2014.

Mark Lynam SC, defending, brought King through some internal emails within the bank, dated March 2004. In the emails, a bank worker in head office pointed out to some of her colleagues that no charge had been registered in a number of properties for which Lynn had taken out loans.

In the email, the head-office worker suggested that her colleague should speak to Lynn. “I think we have more than enough here to call Mr Lynn back in and ask him to explain how he has not complied with the undertakings given,” the email stated. “He should be referred to the Law Society.”

‘Abnormal borrowing’

King told defence counsel that he had no knowledge of these emails. Lynam submitted that the emails “seem to set out extremely abnormal borrowing”, and included a reference to referring Lynn to the Law Society.

“Is this the kind of email that would cause concern?” defence counsel asked King.

“Yes, I would expect so,” King replied.

Lynam submitted that Bank of Ireland had “a duty of the utmost good faith” to supply its insurance company with all of the information relevant to its claim.

“Is this issue potentially relevant to the insurance claim?” he asked, adding that the bank's position was that it “had no knowledge” and “no reason to suspect this loan wouldn't be repaid”.

“There's material in the bank that supports that they ought to have had a level of knowledge,” Lynam continued.

King replied that he was not an insurance expert. He agreed that this documentation was “potentially relevant”.

Under re-examination from Karl Finnegan SC, prosecuting, King agreed that he had no knowledge on whether the internal bank queries about Lynn were answered or not, or whether they were answered satisfactorily or not.

He agreed that the insurance claim was paid out for losses as a result of “Michael Lynn's fraud”.

Two letters sparked concern

Fiona McAleenan, who worked as a solicitor in Michael Lynn and Co, was cross-examined by defence counsel.

McAleenan said that she became concerned when she saw two letters that listed a number of the same properties being sent by different financial institutions.

She said that she couldn’t remember the exact circumstances in which she became aware of the letters, nor which financial institutions had sent them.

McAleenan added that she couldn’t recall the contents, but thought the letters were related to the registration of charges.

She agreed with Paul Comiskey O’Keeffe BL, defending, that she was concerned, but didn’t speak to Lynn about it.

Advice

She said that she was advised to leave the practice and to contact the Law Society.

“It wasn’t legal advice, but advice on what to do. I didn’t think I was going to be sued at that stage. I wanted advice for myself,” McAleenan said.

She confirmed that she resigned from the practice in September 2007, and met the Law Society around the same time.

She said that she was “surprised” when Comiskey O’Keeffe put it to her that the Law Society’s position was that it had no notes or documents of that meeting.

She agreed that she went to the practice the day after her resignation and emailed some documents to herself, but couldn’t recall which ones.

“I wasn’t concerned at that stage I was going to be sued. I was concerned as I had reflected on the encouragement to sign documents as a partner, and on the negotiations to become a partner. I was worried I was going to be dragged into this, which I was.”

Lynn ‘regularly in contact’

Comiskey O’Keeffe asked McAleenan why she didn’t take the “precaution of checking” letters of undertaking brought to her by staff in the practice. She said that she didn’t think she should, as they were working with Lynn – “a very qualified solicitor”.

Defence counsel put to McAleenan that Lynn was spending “more than six months out of the country” in 2006 and 2007, and was focused on Kendar – his property development company – while in Ireland.

He suggested that she was aware that Lynn was “not supervising the work”, which she “mindlessly accepted without asking basic questions”.

McAleenan agreed that Lynn was not working on conveyancing files, but noted that he was regularly in contact with the office by phone, and that he said that Liz Doyle was “his eyes and ears in the practice”.

Proceedings

Comiskey O’Keeffe put it to McAleenan that Irish Life and Permanent had initiated proceedings against her, and that, during this, her position was that Doyle was part of the “fraud perpetrated by Mr Lynn”.

McAleenan replied: “I don’t recall my specific allegation against Ms Doyle in those proceedings. I understood, and understand, that Ms Doyle was involved in Mr Lynn’s activities.”

Comiskey O’Keeffe noted that Doyle’s position was that McAleenan knew about the letters of undertaking and had given her permission. “No, that was not the case,” McAleenan said.

McAleenan stated that she had had no involvement with Overseas Property Limited (OPL), and “most certainly did not” have a role as its manager.

Comiskey O’Keeffe put it to her that she was “holding herself out” as a partner in Michael Lynn and Co.

Profit-sharing suggestion rejected

“I was asked by Mr Lynn to say I was a partner,” McAleenan replied, adding that they were in partnership negotiations at the time, which “did not go anywhere”.

She said that it was “absolutely not true” that a profit-sharing agreement had been in place, but accepted that she had asked for a percentage profit share as part of the partnership negotiations.

Comiskey O’Keeffe said that his instructions were that a 10% profit-share arrangement had been in place, but that she had asked for a higher percentage.

“That is lies,” she replied.

He then suggested that OPL fees were included in the profit-share arrangement, which McAleenan rejected as “not true”.

She agreed that she described herself as a partner on an insurance form for the practice, adding that it was at Lynn’s request. “I did. I shouldn’t have,” she said.

She rejected Comiskey O’Keeffe’s suggestion that email correspondence about the practice’s move to offices in the Capel Building indicated that she had a role in the management of the office. She reiterated her evidence that she was not involved in the conveyancing side of the practice.

“You can put any interpretation you want on my answer, but I was not involved in conveyancing. You can ask anyone in practice if I was involved in conveyancing, apart from Mr Lynn,” she said.

Comiskey O’Keeffe asked why they should not ask his client.

“We know what the answer is going to be,” she replied.

Emails

McAleenan was then shown a series of emails that she said she had never seen.

Comiskey O’Keeffe suggested that her position was “implausible and unrealistic”.

“That was reality. You have to remember what was going on,” McAleenan replied.

He put it to her that the emails suggested that she was aware of what was going on.

“I most certainly did not know what was going on,” she said.

The trial resumes today (Monday) before Judge Martin Nolan and the jury.