Former lawyer Michael Lynn told his multi-million dollar theft trial that he was greedy and over-motivated, but he was not a thief. He is accused of stealing around 27 million euros from seven financial institutions.
Mr Lynn also told the court he had entered into a ‘profit sharing’ agreement with former Irish Nationwide chief executive Michael Fingleton.
During his third day of giving evidence at his trial in Dublin Circuit Criminal Court on Wednesday, Mr Lynn (53) described the banks as ‘confederate’ in terms of their relationship with him.
“They were ready to loan me out,” he said. “Always, always, I intended to repay the banks. Without the banks, you are just a person with ideas. Without your name, with the banks, you are nothing.
Mr Lynn told the trial: ‘I am not a thief’.
He said he was ‘greedy’ and ‘over-driven’ but was used by the banks to make money off of him.
Naming numerous banks and several staff, Mr Lynn described a practice whereby a loan would be made in relation to one property or development but used on another by being rolled over.
No bank could have known what was going on, he said. “First of all it was done openly, it was discussed and I repaid those loans. I didn’t create a scheme. I worked alongside the banks. It was not right and I I paid dearly for it, I paid dearly for a long time.
If a bank gives someone a facility for 12 months and the loan hasn’t been repaid, there should have been a new letter of loan or a letter-recognized extension, Mr Lynn said.
“There is no letter because it was done verbally,” Mr Lynn said. “Yes [the banks are] now claiming to be innocent of any involvement, why didn’t they arrest me? »
When questioned by his own solicitor, Paul Comiskey-O’Keeffe BL, Mr Lynn said he had three loans on the £5.5m property, Glenlion in Howth, Dublin. One of the loans came from the Irish Nationwide Building Society (INBS), then headed by Michael Fingleton.
However, the court heard the money was not used for this property but for a development Mr Lynn had undertaken in Portugal and wanted to expand.
“I had an agreement with Michael Fingleton that he was to have a share of the profits with me as part of my development in Portugal,” Mr Lynn said. “He lent me money, which was supposed to be for Glenlion but was actually for my development in Portugal.”
Judge Martin Nolan intervened and asked: “Let’s be clear, you are saying that Michael Fingleton had a personal share of the profits with you to profit from, even though it was the INBS institution that loaned you the money.”
Mr. Lynn agreed that was what he was saying.
Mr Lynn described his relationship with figures in Irish banking during the Celtic Tiger era and how when the High Court froze his bank accounts in late 2007 they came to view him as ‘toxic’.
He said Mr Fingleton was concerned that Mr Lynn would testify in court and describe the relationship between the banks and the developers.
“Michael Fingleton felt that the loans we had would draw too much attention to him and his bank, if I were to start explaining the culture that had existed for three to five years.” Mr. Lynn told Mr. Comiskey-O’Keeffe.
This culture, Mr Lynn explained, involved a borrower getting a loan ostensibly to buy property in Ireland, but actually using it to invest overseas.
He told the trial that in September 2007 he was on a business trip to Portugal with his wife when he was informed of a letter from the Law Society to partners in his practice in Dublin. The company had assigned an inspector to examine the business, the court heard.
The inspection was ‘very focused on my borrowings – entirely on that,’ Mr Lynn said.
In October 2007 the High Court froze his bank accounts and the accounts of his legal and property companies.
“The whole structure was frozen overnight,” Mr Lynn said, adding that he had been “stopped cold”.
He started getting calls from bankers, people he had dealt with personally, who were worried about his ability to repay.
Mr Lynn said he had approached bankers including Michael Fingleton and Sean FitzPatrick of Anglo Irish Bank and sought “respite”.
He told the court he told them, “Listen, I’m in a real crisis here and I need time to see if I can sort this out.”
“My intention, as it always has been, was to repay since the first loan in 1997. I wanted to do everything I could to try to sort this out, for myself and for everyone I had a relationship with.” , did he declare.
Mr Lynn said Michael Fingleton said he was “concerned about the impact the story could have on the banking industry”.
Mr Lynn said his loans at the time were ‘probably around 70m’ and it was ‘simply impossible’ to repay them on just one.
Mr Fingleton was concerned, Mr Lynn said, about him [Mr Lynn]”take the stand and testify”.
In response to inquiries about his affairs, he said he swore an affidavit in which “I didn’t try to hide. . . I knew at this point that I was done as a lawyer but I hadn’t lost the will to live.
Mr Comiskey-O’Keeffe told Mr Lynn he had been required to appear at the High Court and be cross-examined and asked if he had appeared.
“No, I didn’t,” Mr. Lynn said. “What happened was that I had meetings with the banks, with key people who had made loans. I was told that I had to take the hit and that I could start over.
He said that Mr. Fingleton and Mr. FitzPatrick “indicated [ to me] that I was toxic”.
He had what he described as a town hall meeting with bankers before he was asked to testify. They were all concerned, he said in testimony. In another meeting with a group of bankers, three of whom he said he knew, “They seemed really nervous.”
Mr Lynn, of Millbrook Court, Red Cross, 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.
The trial continues before Judge Martin Nolan and a jury.