Bank lost total value of loan to Michael Lynn months after it was issued

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Bank Lost Total Value Of Loan To Michael Lynn Months After It Was Issued Bank Lost Total Value Of Loan To Michael Lynn Months After It Was Issued
Michael Lynn (53) is facing 21 charges relating to the alleged theft of around €27 million from seven financial institutions. Photo: Collins Courts
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Brion Hoban

A bank made a loss of the total value of a €1.3m loan months after it was issued, the multi-million euro theft trial of former solicitor Michael Lynn has heard.

Mr Lynn (53) is facing 21 charges relating to the alleged theft of around €27 million from seven financial institutions, the trial has heard. He denies all charges against him.

The financial institutions involved are Bank of Ireland Mortgages Bank Ltd, Danske Bank, Irish Life and Permanent, Ulster Bank, ACC Bank PLC, Bank of Scotland Ireland Ltd, and Irish Nationwide Building Society.

Mr Lynn of Millbrook Court, Red Cross, Co Wicklow, has pleaded not guilty to 21 counts of theft in Dublin between October 23rd, 2006 and April 20th, 2007.

It is the prosecution 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.

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Giving evidence earlier in the trial, Noel McCole, told John Berry BL, prosecuting, that he was a business banking manager for National Irish Bank, later Danske Bank Ireland, from 2000 to 2010.

Mr McCole said in December 2006 he was contacted by Mr Lynn’s assistant by email seeking information about the bank’s products and criteria. This email was later followed up with a request for finance on behalf of Mr Lynn to purchase four apartments in Dublin.

Giving evidence on Thursday, Mr McCole said in February 2007, the bank sent a letter of offer to Mr Lynn agreeing to fund 80% of the purchase of the properties provided that conditions were met. He said this document was signed by Mr Lynn and returned to the bank.

Mr McCole said the bank was contacted by a person purporting to be solicitor Fiona McAleenan who sent documents in which it was said she had been given irrevocable authority by Mr Lynn to give undertakings of good title relating to each of the four properties.

It is the prosecution's case that letters of undertaking provided during applications which were purportedly signed by a solicitor and partner at Mr Lynn's law firm were in fact forgeries signed by an employee of Mr Lynn.

Drawn down

Mr McCole said that the loan of €1,338,160 was drawn down by way of bank transfer in March 2007 when the funds were transferred to the account of Mr Lynn. He said repayments were made monthly on this loan, but ceased in October 2007.

He said the bank was ultimately unable to establish security on the properties and the bank suffered a loss of the total value of the loan. He said he was now aware that undertakings regarding the properties had been given to other financial institutions.

Mr McCole said it would not be prudent business for a bank to lend money without first getting legal charge of the properties. He said if a bank was aware of other institutions having interests in properties, a bank would not advance funds for purchase.

He said if the bank had been aware of other interests in these four properties, a loan would have never been advanced.

The trial continues on Friday before Judge Martin Nolan and a jury.

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