A solicitor purported to have signed an undertaking relating to a €3.7 million loan told a bank the signature on the document was not hers, a multi-million euro theft trial has heard.
A former official with Permanent TSB told the trial of Michael Lynn (53) that alarm bells rang for him in October 2007 when solicitor Fiona McAleenan informed him that a signature purporting to be hers relating to a €3.7 million loan application was not hers.
Mr Lynn is on trial at Dublin Circuit Criminal Court accused of the theft of around €27 million from seven financial institutions.
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.
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 (INBS).
Giving evidence on Wednesday, Cathal MacCarthy, formerly a group chief legal officer for Permanent TSB, told Karl Finnegan BL, prosecuting, that in May 2007, Mr Lynn made an application to the bank for a loan of €3,725,625 to purchase 12 properties.
Mr MacCarthy said the security for the loan that Mr Lynn was offering was first legal charge for the properties. He said Mr Lynn signed a letter of approval for the loan in June 2007, included in which was a special condition for the first legal charge over the properties.
He said the bank received a letter of undertaking purportedly signed by solicitor Fiona McAleenan and stating that she had the borrower's irrevocable authority to provide this undertaking.
Mr MacCarthy said from that undertaking, he believed that for the facility of the loan to be provided Mr Lynn would have signed the mortgage deed giving the bank a first legal charge over all the properties for that loan.
He said that subsequently the title deeds would have registered properly and then sent to the bank together with a certificate of title, certifying it had first legal charge over the mortgages.
Mr MacCarthy said he later checked with the land registry and the registry of deeds to ensure that the first legal mortgage in favour of the bank. He said he established Mr Lynn was not the registered owner of the properties and there was no valid legal charge for the banks over the properties.
He said the bank “absolutely” would not have advanced the facilities of €3.7 million if this knowledge had been available to him at that time.
Mr MacCarthy said that in October 2007, he received an email from Ms McAleenan which stated that in reference to the undertaking relating to the €3.7 million, the signature on the undertaking which purports to be hers was not her signature.
He agreed with prosecuting counsel that this did “ring alarm bells”, but said it was not the first indication of the issue they had.
Paul Comiskey O'Keeffe BL, defending Mr Lynn, told the court it is accepted by Mr Lynn that the signature is not that of Ms McAleenan. He said his client's position is that it was the custom and practise that she allowed her signature be used “on all sorts of documents” including undertakings.
Mr McCarthy told prosecuting counsel that the €3.7 million which was forwarded was never repaid.
The trial continues before the jury on Friday.