Former solicitor Michael Lynn has told his multi-million-euro trial that he had permission from bankers to use his mortgage-loan money to pay for his property developments abroad.

Mr Lynn (53) told his Dublin Circuit Criminal Court trial that he wasn't allowed do what he wanted with the money, but that the banks “would have understood it was to purchase a specific site at a present time and repay it”.

He said this practice was going on as far back as 2003, when he had a similar arrangement with Bank of Ireland.

In his second day in the stand today (9 May), Mr Lynn told defence counsel that these arrangements were set out in emails that he sent to bankers: “I had to do that to protect myself also,” he said.

He said he does not have those emails now.

Mr Lynn (53) of Millbrook Court, Red Cross, 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 23 October 2006 and 20 April 2007. 

Multiple mortgages

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.

Under questioning from Paul Comiskey O'Keeffe BL, defending, Mr Lynn said that he conducted all his business on a Kendar email address, and that these emails existed until October 2007 on a server.

He said he requested information from the company liquidator, from the Director of Public Prosecutions, and from the banks. He said he only received a redacted response from Irish Permanent.

Earlier, Mr Lynn gave evidence of his history of lending, starting with the first investment properties he bought in the late 1990s. He said these properties were “flipped” for a profit within a period of months.

Mr Lynn said he was introduced to a process by bankers whereby the mortgage was not signed, and no documents were lodged with the Land Registry at the time.

'Undertaking only' 

He said this process, referred to in court as an 'undertaking-only' mortgage, “allowed lending to become quicker, more fluid”.

“I was introduced to these processes by bankers,” Mr Lynn told the court. “I also say I didn't refuse them. I embraced them. I was a young person learning about business.”

Mr Lynn said the registration process could take a year: “If you were in the business model of buying, holding and selling within four months to a year, the registration process would take a long time,” he said.

When buying a property with the intention of selling it quickly, he said he would arrange with the banks that it was undertaker only. These arrangements were made with senior bankers, such as Michael Fingleton, the former chief executive of Irish Nationwide, he said.

Verbal arrangement

When asked by counsel if this arrangement was on the letter of offer from a bank, Mr Lynn said it was not.

“It was a verbal arrangement with specific bankers or people who were senior in the credit committee,” he said.

Giving evidence on the company's statement-of-affairs documentation that was used to secure loans, Mr Lynn told the trial that each bank he dealt with would have had checks carried out by the Irish Credit Bureau (ICB.

“The ICB check was the CCTV system in a bank,” he said.

“...If I was trying to pull the wool over their eyes or take advantage of the bank, their own internal checks were there,” he said.

Statement-of-affairs not a ‘full picture’

It is alleged by the prosecution that Mr Lynn provided statement-of-affairs documentation that purported to be from an accountancy firm, but which was not, and which did not set out a full picture of his financial situation.

Mr Lynn said no concerns about his statement of affairs were ever raised with him.

“What I was up to was doing business with the banks, and the banks were enabling me and assisting me to do business,” he said.

Witches’ brew

Mr Lynn said that if he had been trying to put together a “witches’ brew”, the banks would have seen this.

“They could see these loans,” he said. “For them now to turn around and say I somehow misled them with my statement of affairs, that I duped them – the ICB check was their security system, and I didn't interfere with that because I couldn't.”