Building society officials have told a trial they would “absolutely not” have issued a €4.1 million loan to former solicitor Michael Lynn if they had been aware there was another mortgage taken out on the property.
A former branch manager and senior underwriter with Irish Nationwide Building Society told Dublin Circuit Criminal Court on Friday they believed the mortgage taken out by Mr Lynn and his wife, Bríd Murphy, for Glenlion House in Howth, Co Wicklow was the sole mortgage on the property.
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, with an address at 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'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.
On Friday, the trial heard evidence of a €4,125,000 mortgage application Mr Lynn made to Irish Nationwide Building Society in late 2006 to purchase Glenlion House, a property valued at €5.5 million.
Mark Mulcahy, a former branch manager at Irish Nationwide Building Society in Dun Laoghaire, said he was introduced to Mr Lynn through a broker as a young self-employed solicitor “who might be a good contact to meet”.
The pair began a business relationship and Mr Mulcahy said he looked after a number of Mr Lynn's buy-to-let mortgages for him in the early 2000s.
When asked if they had a social relationship, Mr Mulcahy said they were not friends, but Mr Lynn had invited him to three functions in the Burlington Hotel, Citywest Hotel and Vicar Street.
“He had outgrown me and was doing bigger things then and I hadn't seen him for a number of years,” Mr Mulcahy told the trial.
The court was brought through documentation in relation to the Glenlion House mortgage application.
Mr Mulcahy said he had no authority to grant mortgages, but would send on applications to underwriters in the building society's headquarters, who would in turn approve and sanction the mortgage.
'Immaculate repayment record'
Building society documents said Michael Lynn has “always maintained an immaculate repayment record” and was in a “strong financial position”.
“His profits for last year were approximately €1.25 million. He has assets valued at over €45 million,” the document said.
At the time, Mr Mulcahy said he would fully recommend the loan for Mr Lynn “given his excellent repayment record, strong financial position and valuable assets”.
The court has heard the mortgage was drawn down in April 2007.
“As far as you were aware, this was the sole mortgage being taken out on this property?” prosecution counsel, Patrick McGrath SC asked Mr Mulcahy, to which he replied: “Absolutely.”
“If you had been aware that there was another mortgage, would you have recommended this to headquarters?” Mr McGrath asked. “Absolutely not,” the witness replied.
The court was shown an Irish Credit Bureau check done on Mr Lynn around this time, which came back with “no difficulties”, Mr McGrath said.
Olivia Greene, senior underwriter with Irish Nationwide Building Society during the same period, gave evidence that, as far as she was concerned, their mortgage was the sole mortgage on the property.
When asked if she would have advanced the money if there was another mortgage on the property, she replied: “Absolutely not.”
'Strong, commercial, capable individual'
Andrew Snow, a former business relations manager with Bank of Scotland Ireland, told the trial he first dealt with Mr Lynn when he applied to the bank for a €3,850,000 mortgage to purchase Glenlion House in December 2006.
Internal documentation from the bank described Mr Lynn as a “strong, commercial, capable individual” who already had property loans to the value of €10.2 million with the bank.
His wife was described in bank documents as a nurse manager with an annual salary of €47,000, who had taken a career break to care for her sick father.
Glenlion House was described in bank documents as “very prestigious with cliff views in an excellent setting”.
A declaration signed by Mr Lynn and his wife stated there were no existing loans in their names with Bank of Scotland Ireland or any other lender other than those declared in that form, the court heard.
A condition of the mortgage was that it was “the only mortgage on the property”, Mr McGrath said, to which Mr Snow agreed.
The court was shown documents signed by Mr Lynn and his wife which stated: “You are not allowed to create a second charge over this property.”
The loan was taken out in April 2007.
The court heard that after these matters came under investigation, the bank established the undertakings provided by Mr Lynn & Co solicitors had not been complied with, and the bank was unable to protect the security of Glenlion House.
“The bank therefore suffered a loss of not less than €3.85 million,” Mr McGrath said.
It was later established that Mr Lynn obtained another mortgage for Glenlion House with ACC bank in October 2007, Mr McGrath said.
The trial, which is expected to run for up to 14 weeks, resumes on Monday before Judge Martin Nolan and a jury.