Jury hears of ex-solicitor Michael Lynn's €1.388m loan application to buy four Dublin apartments

Mr McCole agreed that the bank was told that as of December 2006, a statement of affairs concluded that Michael Lynn (pictured) had a net worth of €9m. Photo: Collins Courts

A jury has heard that former solicitor Michael Lynn applied for a €1.388 million loan with National Irish Bank in 2007 to finance four investment properties in Dublin city.

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 of Millbrook Court, Red Cross, Co. Wicklow, has pleaded not guilty to 21 counts of theft in Dublin between October 23, 2006, and April 20, 2007.

It is the prosecution 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.

Giving evidence on Wednesday, Noel McCole told John Berry BL, prosecuting, that he was a business banking manager for National Irish Bank, later Danske Bank Ireland, from 2000 to 2010. Mr McCole said he had previously become acquainted with Mr Lynn, through his work as a branch manager with the bank in Blanchardstown.

He said on December 21, 2006, he was contacted by Mr Lynn’s assistant by email seeking information about the bank’s products and criteria. This email was later followed up with a request for finance on behalf of Mr Lynn to purchase four apartments in Dublin.

The properties were described as “residential tenancies” and in total had a purchase price of €1.672 million. The loan was sought on the basis that the apartments would be “investment properties”.

A letter was subsequently received on February 6, 2007, detailing the four apartments and their addresses and stated that Mr Lynn required 85% finance if possible. Mr McCole said a colleague of his raised a credit application on the bank’s internal system and confirmed that document on a screen shown to the court and jury.

He agreed that this was an internal document outlining that the finance requested was for €1,338,160 as a variable rate business loan, representing 80% of the total purchase price. Mr McCole agreed with Mr Berry that the bank needed to see “such things” as accounts before the loan could be approved.

He further agreed that the credit application outlined that the purpose of the loan was to provide “quality rental accommodation” and included a personal background on Mr Lynn. Mr McCole agreed that the bank was told that as of December 2006, a statement of affairs concluded that Mr Lynn’s net worth was €9 million.

He said that a number of conditions were attached to the loan, such as that it was required for the properties to be insured noting the bank’s interest in the them, that the properties had a minimum value of €1.672 million and that there would be evidence of the “own funds” to be provided making up the 20% shortfall between the loan amount and the purchase price.

Mr McCole told counsel that the bank wanted to know Mr Lynn’s financial position not only at the time of the request for finance but also, if the loan was successful, on an annual basis.

He agreed that a number of searches were carried out on both Mr Lynn’s company and himself personally in addition to “a credit bureau search” and nothing of concern was found. Mr McCole will continue his direct evidence on Thursday before Judge Martin Nolan and a jury.

Bank of Ireland evidence

Earlier in the trial, Jim Madden, formerly senior business manager at Bank of Ireland, told Patrick McGrath SC, prosecuting (with Mr Berry) that his duties involved being a relationship manager, meaning as part of his role he met with prospective clients, but that the authority to approve loans rested with the “group credit” section within the bank.

Mr Madden said he was introduced to Mr Lynn by a manager of the Bank of Ireland branch in Smithfield in Dublin city centre in 2005. He said he had dealings with Mr Lynn around September 2006 following an application for finance to purchase eight investment properties.

The court has previously heard that Mr Lynn received a cheque for €2,742,000 from Bank of Ireland Mortgages for the purchase of eight properties in Co. Dublin in December 2006.

Mr Madden said a mortgage loan offer containing terms and conditions was issued to Mr Lynn. He said that by signing this loan offer, Mr Lynn has accepted the terms and conditions by which the bank has offered the loan.

He said that after the loan offered was received and signed by Mr Lynn, that effectively concludes his involvement with this loan.

Mr Madden agreed with Feargal Kavanagh SC, defending that he met Mr Lynn “at least twice” and that one of these occasions was in “a non-working environment”.

He said it was in the reception area of a building and he greeted Mr Lynn but added that he didn’t recall having a conversation with him.

Mr Madden categorically denied that he told Mr Lynn at the time that “all of the banks felt collectively that they had no choice but to move against him”.

“100% I did not say that,” Mr Madden replied.