A Bank of Ireland worker suggested Michael Lynn should be referred to the Law Society back in 2004, his multi-million euro theft 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 October 23rd, 2006 and April 20th, 2007.
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.
The financial institutions involved are Bank of Ireland, National Irish Bank (later known as Danske Bank), Irish Life and Permanent, Ulster Bank, ACC Bank, Bank of Scotland Ireland, and Irish Nationwide Building Society (INBS).
In relation to Bank of Ireland, Mr Lynn is accused of stealing €2.7 million from that institution in December 2006.
Arthur King of Bank of Ireland returned to court on Friday to be cross-examined by defence counsel. The court has heard he was involved in compiling documents for the bank's insurance claim in the wake of their losses in relation to Mr Lynn's loans.
The court heard Bank of Ireland received a €4.5 million payment from its insurance company in September 2014.
Mark Lynam SC, defending, brought Mr 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 Mr Lynn had taken out loans for.
Law Society referral
In the email, the head office worker suggested her colleague should speak to Mr 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.”
Mr King told defence counsel he had no knowledge of these emails. Mr Lynam submitted the emails “seem to set out extremely abnormal borrowing” and included a reference to referring Mr Lynn to the Law Society.
“Is this the kind of email that would cause concern?” he asked Mr King.
“Yes, I would expect so,” Mr King replied.
Mr 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 said, 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,” Mr Lynam said.
Mr 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, Mr King agreed that he had no knowledge as to whether the internal bank queries about Mr Lynn were answered or not, or whether they were answered satisfactorily or not.
Insurance claim
He agreed that the insurance claim was paid out for losses as a result of “Michael Lynn's fraud”.
Fiona McAleenan, who worked as a solicitor in Michael Lynn and Co, continued being cross-examined by defence counsel.
Ms McAleenan said she became concerned when she saw two letters which listed a number of the same properties being sent by different financial institutions.
She said she couldn’t remember the exact circumstances in which she became aware of the letters or which financial institutions had sent them.
Ms McAleenan said 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 Mr Lynn about it.
She said 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,” Ms McAleenan said.
She confirmed she resigned from the practice in September 2007 and met with the Law Society around the same time.
She said she was “surprised” when Mr Comiskey O’Keeffe put to her that the Law Society’s position was that they have no notes or documents of that meeting.
Resignation
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.”
Mr Comiskey O’Keeffe asked Ms McAleenan why she didn’t take the “precaution of checking” letters of undertaking brought to her by staff in the practice. She said she didn’t think she should as they were working with Mr Lynn - “a very qualified solicitor”.
Defence counsel put to Ms McAleenan that Mr 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 she was aware Mr Lynn was “not supervising the work”, which she “mindlessly accepted without asking basic questions”.
Ms McAleenan agreed Mr Lynn was not working on conveyancing files, but noted he was regularly in contact with the office by phone and that he said Ms Doyle was “his eyes and ears in the practice”.
Mr Comiskey O’Keeffe put it to Ms McAleenan that Irish Life and Permanent initiated proceedings against her, and during this, her position was that Ms Doyle was part of the “fraud perpetrated by Mr Lynn”.
Ms 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.”
Mr Comiskey O’Keeffe noted that Ms Doyle’s position is that Ms McAleenan knew about the letters of undertaking and had given her permission. “No, that was not the case,” Ms McAleenan said.
Ms McAleenan said she had no involvement with Overseas Property Limited and “most certainly did not” have a role as its manager.
Mr Comiskey O’Keeffe put it to her that she was “holding herself out” as a partner in Michael Lynn and Co.
Partner
“I was asked by Mr Lynn to say I was a partner,” Ms McAleenan replied, adding that they were in partnership negotiations at the time, which “did not go anywhere”.
She said it was “absolutely not true” that a profit-sharing agreement had been in place, but accepted that she asked for a percentage profit share as part of the partnership negotiations.
Mr Comiskey O’Keeffe said his instructions were that a 10 per cent profit share arrangement was in place, but she asked for a higher percentage. “That is lies,” she replied.
He then suggested that OPL fees were included in the profit share arrangement, which Ms McAleenan rejected as “not true”.
She agreed she described herself as a partner on an insurance form for the practice, adding that it was at Mr Lynn’s request. “I did. I shouldn’t have.”
She rejected Mr Comiskey O’Keeffe’s suggestion that email correspondence about the practice’s move to offices in the Capel Building indicated 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.
Mr Comiskey O’Keeffe asked why they should not ask his client. “We know what the answer is going to be,” she replied.
Ms McAleenan was then shown a series of emails which she said she had never seen.
Mr Comiskey O’Keeffe suggested her position was “implausible and unrealistic”.
“That was reality. You have to remember what was going on,” Ms McAleenan replied.
He put it to her that the emails suggested she was aware of what was going on. “I most certainly did not know what was going on,” she said.
The trial resumes on Monday before Judge Martin Nolan and the jury.
