‘Custom and practice’
It is the prosecution’s case that Lynn obtained multiple mortgages on the same properties in a situation where banks were unaware that other institutions were also providing finance.
Lynn has told his trial that the banks were aware he had multiple loans on the same properties. and that this was “custom and practice” among bankers in Celtic Tiger Ireland.
Starting his second week in the witness box yesterday (16 May), Lynn's cross-examination by prosecuting counsel, Patrick McGrath SC, continued.
Lynn agreed with the senior counsel that his evidence was that there were “two types of secret deals” with the banks – a “secret profit deal” with Michael Fingleton, then chief executive of Irish Nationwide; and an understanding with the banks in which he said he was allowed to use the mortgage loan money to pay for his property developments abroad.
Secret profit-share arrangement
Lynn has alleged he had a secret profit-share arrangement with Fingleton, in which Irish Nationwide would give him a loan, purportedly for his Howth property Glenlion, but which he would use to develop a site in Portugal, and that Fingleton would profit from it personally.
Lynn agreed with prosecution counsel that he has never contacted Fingleton to make a statement on the alleged deal, saying there was “no point” and that “he threw me to the wolves”.
“He absolutely wasn't going to assist me,” Lynn said. “He turned his back on me.”
The court heard that Michael Fingleton is unwell and unable to give evidence at the trial.
“I'm very sorry for him that he is sick,” Lynn said. “But I'm not responsible that no statement was taken from him from 2008 to 2022.”
Bank officials named
Lynn named bank officials from each bank who he said he met – or his property company employees met – to make these secret deals, including Irish Life and Permanent, Bank of Ireland, Bank of Scotland Ireland, Ulster Bank, and National Irish Bank.
The court heard that Sean FitzPatrick of Anglo Irish Bank, who died last year, was also “instrumental” in allowing this arrangement to happen. There are no charges against Lynn in relation to Anglo Irish Bank.
The court has heard that Anglo Irish Bank secured the first legal charge on properties that Lynn took loans out on.
McGrath put it to Lynn that he “couldn't divert that money into fraudulent undertakings because they had their own independent solicitors”. Mr Lynn said that was not correct.
Lynn’s ‘secret deals’
Giving evidence on Fiona McAleenan, a solicitor who worked for him and who testified at the trial, Lynn said she was “absolutely” aware that he had these secret deals with the bank in relation to his mortgages.
“She had been working for me since 2005. She was signing the undertakings,” Lynn said.
McGrath put it to Lynn that this was never put to McAleenan in the six days she spent in the witness box.
“You are now blackening her character,” McGrath said.
“...If she was aware of this charade and these secret deals, it's the first thing your counsel would have put to her,” McGrath said.
Lynn replied that he was responsible for his borrowings, and McAleenan was not morally responsible.
‘I took it on the chin’
“Even in 2007, I never involved her – I took it on the chin,” Mr Lynn said, referring to when the allegations first came to light. He said he didn't think it was fair to “bring down other people”.
McGrath said Lynn “didn't have the decency to put these allegations to [McAleenan]”, noting that he is a lawyer, and knows how a trial works.
Lynn said he was a civil lawyer, not a criminal lawyer, and he had never been involved in a criminal trial before: “I'm in the dentist’s chair Mr McGrath, I can't do my own filling,” he said.
Lynn told the trial that Liz Doyle, who worked for him as a legal executive, was also aware of the secret deals. He agreed that the allegation was not put to her when she gave evidence at the trial.
Pack of lies
“Our case is that this is a pack of lies about the secret deals,” McGrath said. Lynn disagreed.
McGrath continued: “When you entered into these secret deals, according to your dishonest evidence, with these individuals in the banks, did you ever consider whether they were authorised by the bank to allow you to do this?”
Lynn replied that “each of the banks said it was okay” but that “as a lawyer”, he should have checked: “That's why I no longer practise as a solicitor,” he said.
“You no longer practise as a lawyer for a different reason Mr Lynn,” Mr McGrath said, adding that Michael Lynn had been struck off.
“I was struck off as a lawyer because I took my eye off the ball, and I was a property developer,” Lynn said. “There's no excuse, but that doesn't make me a thief.”
Prosecution counsel took Lynn through a number of loans he took out. In relation to these mortgages, Lynn said he “absolutely” told each of the banks that he already had taken out a loan on the same property with other banks.
“All of the banks were aware,” he said. “There was no mystery.”
Lynn said that prosecution counsel was now going into “very telescopic” evidence in relation to each loan. “In actual fact, the banks were happy to give general loans on the basis these general loans would be repaid,” he said. This was “the custom and practice”, he added.
“The banks were acquiescing, giving me full consent, and this was repaid every time,” Lynn said. “These are big institutions, they have terrific professionals working for them, and they allowed it to happen.”
Lynn told the court that there were “multiple examples” of the arrangement being “custom and practice” in the banks.
“If I'm going to pay, then others should too,” Lynn said, at which point Judge Martin Nolan told him he was not entitled to make speeches.
The trial continues.