Former solicitor and property developer Michael Lynn’s financial affairs were “an open book”, his trial has heard.
Mr Lynn (55), of Millbrook Court, Redcross, Co Wicklow, is on trial at Dublin Circuit Criminal Court 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.
It is the prosecution’s case that Lynn (pictured) obtained multiple mortgages on the same properties, in a situation where banks were unaware that other institutions were also providing finance.
John Kinsella, of the accountancy firm Kinsella Mitchell & Associates, returned to court yesterday (5 December) to be cross-examined by defence counsel.
‘Favourable’ relationship with banks
The court has heard that Kinsella was a partner in the firm, which acted as independent auditor for Lynn’s property-development company, Kendar Holdings Limited, and as accountant for his legal practice, Michael Lynn & Co solicitors.
Kinsella was previously brought through a number of statements of affairs given to banks in relation to Lynn’s loans, which he agreed were not from his firm and were “forgeries”.
Under cross-examination from Paul Comiskey O’Keeffe BL, defending, Kinsella agreed that Lynn had a “favourable” relationship with the banks and was never refused a loan.
He said that he did not think he ever received a phone call from a bank checking up on a statement of affairs, saying that “back then” this was not done so much, but that it happened more often now.
When asked if he had ever advised a solicitor at the practice – Fiona McAleenan – not to become a partner in Michael Lynn & Co Solicitors, Kinsella said ‘no’. He said that he told her to “be aware that Michael was more involved in property development, and less and less involved in the practice”.
Transactions ‘not reflected’
The court heard that Kendar was audited by Revenue for the year ending December 2006, and that Kinsella was one of a team who worked on preparing for this.
The court was shown documents from July 2007, in which Kinsella wrote to Lynn expressing his concern about the accuracy of the account records, including a number of transactions that he said were not reflected in the account records. These included Bank of Scotland and Anglo Irish Bank accounts with “substantial transactions”, the court heard.
Kinsella wrote to Lynn saying that the absence of these transactions from the trial balance (which the court heard was a precursor balance sheet) “calls into question whether the financial position of the company can be accurately ascertained from the accounting records and, by implication, whether proper books and records are being maintained”.
Kinsella asked Lynn to get back to him on this, but the court heard that, before anything was done, the Law Society became involved in Lynn’s affairs. The trial has heard that his accounts were frozen by the High Court in October 2007.
Kinsella agreed with defence counsel that, during the period the jury has to consider, he was authorised to access Lynn’s financial records from the bank.
When prosecution counsel pointed out that this was in relation to Kendar Holdings Ltd, Comiskey O’Keeffe asked Kinsella if he had had access to banks and records in relation to Michael Lynn & Co Solicitors.
“Yes, I would think so, yes,” Kinsella replied.
Comiskey O’Keeffe later put it to Kinsella that “Mr Lynn’s financial affairs were an open book”, and that people within Kendar had access to his accounts.
“Yes,” Kinsella replied.
The trial continues before Judge Martin Nolan and the jury.