Bank lost full value of €1.3m loan to Michael Lynn in months
A bank lost the full value of a 1.3 million euro loan months after it was issued, the multimillion-euro theft trial by former lawyer Michael Lynn has learned.
Mr Lynn (53) faces 21 charges relating to the alleged theft of around 27 million euros from seven financial institutions. He denies all the 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, Redcross, Co Wicklow, pleaded not guilty to 21 counts of theft in Dublin between October 23, 2006 and April 20, 2007.
According to the prosecution, Mr Lynn obtained several mortgages on the same properties in a situation where the banks were unaware that other institutions were also providing financing.
Giving evidence earlier in the trial, Noel McCole told prosecuting John Berry BL that he was a merchant banking manager for National Irish Bank, later Danske Bank Ireland, from 2000 to 2010.
Mr McCole said in December 2006 that he was contacted by Mr Lynn’s assistant by email for information about the bank’s products and criteria. This email was then followed by a request for funding on behalf of Mr Lynn for the purchase of four apartments in Dublin.
Testifying on Thursday, Mr McCole said that in February 2007 the bank sent a letter of offer to Mr Lynn agreeing to finance 80% of the purchase of the properties provided the 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 someone claiming to be solicitor Fiona McAleenan who sent documents saying she had received irrevocable authority from Mr Lynn to give undertakings in good and due form regarding each of the four properties.
According to the prosecution, the letters of engagement provided during the applications which were allegedly signed by an attorney and associate of Mr. Lynn’s law firm were in fact forged signed by an employee of Mr. Lynn.
Mr McCole said the €1,338,160 loan was taken by bank transfer in March 2007 when the funds were transferred to Mr Lynn’s account. He said repayments were made monthly on that loan, but stopped in October 2007.
He said the bank was ultimately unable to post security on the properties and the bank suffered a loss in the full 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 for a bank to lend money without first obtaining the properties legal charge. He said if a bank was aware that other institutions had interests in properties, they would not advance funds for the purchase.
He said if the bank had known of other interests in those four properties, a loan would never have been advanced.
The trial continues Friday before Judge Martin Nolan and a jury.