The construction company says it would not have given the former lawyer a €4.1million loan if he had known about a separate mortgage

Construction company officials told a trial they ‘absolutely wouldn’t’ have granted a €4.1m loan to former lawyer Michael Lynn if they had been aware that another mortgage had been taken out on the property.

The former branch manager and lead underwriter of the Irish Nationwide Building Society told Dublin Circuit Criminal Court today that they believe the mortgage taken out by Mr Lynn and his wife Bríd Murphy for Glenlion House in Howth was the only mortgage on this property.

Mr Lynn (53) faces 21 charges relating to the alleged theft of around €27 million from seven financial institutions, the trial heard. He denies all the charges against him.

The financial institutions concerned 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, 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 today heard evidence of a £4,125,000 mortgage application which Mr Lynn made to the Irish Nationwide Building Society at the end of 2006 to buy Glenlion House, a property valued at 5, 5 million euros.

Mark Mulcahy, a former branch manager of the Irish Nationwide Building Society in Dun Laoghaire, told the trial he was introduced to Mr Lynn through a broker as a young independent lawyer ‘who could be a good contact to meet”.

The couple began a business relationship and Mr Mulcahy said he handled a number of Mr Lynn’s buy-to-let mortgages for him in the early 2000s. asked if they had a social relationship, Mr. Mulcahy replied that they were not friends, but Mr. Lynn invited him to three receptions at the Burlington Hotel, Citywest Hotel and Vicar Street .

“He had outgrown me and was doing bigger things by then and I hadn’t seen him for several years,” Mr Mulcahy told the trial.

The court was brought through documents relating to Glenlion House’s mortgage application.

Mr Mulcahy said he had no authority to grant mortgages, but would send applications to underwriters at the building society’s headquarters, who in turn would approve and sanction the mortgage.

Building society documents say Michael Lynn “always maintained an impeccable repayment record” and was in “solid financial condition.”

“His profits for the last year were around 1.25 million euros. He has assets valued at more than 45 million euros,” the document said. At the time, Mr Mulcahy said that He would fully recommend the loan to Mr Lynn ‘given his excellent repayment record, strong financial position and valuable assets’.

The court heard the mortgage was taken out in April 2007.

“As far as you know, this was the only mortgage on this property?” Prosecution lawyer Patrick McGrath SC asked Mr Mulcahy.

“Absolutely,” replied Mr. Mulcahy.

“If you had known there was another mortgage, would you have recommended this to headquarters?” asked Mr. McGrath.

“Absolutely not,” replied the witness.

At that time, the court received a check from the Irish Credit Bureau on Mr Lynn, which came back without “any difficulty”, Mr McGrath said.

Olivia Greene, lead underwriter for the Irish Nationwide Building Society during the same period, testified that as far as she was concerned, the Glenlion House mortgage was the only mortgage on the property.

When asked if she would have advanced the money had there been another mortgage on the property, she replied, “Absolutely not.”

Andrew Snow, former director of commercial relations at Bank of Scotland Ireland, told the trial he first dealt with Mr Lynn when he asked the bank for a €3,850,000 mortgage to buy Glenlion House in December 2006.

Internal bank documentation describes Mr Lynn as a ‘strong, commercial and capable person’ who already had home loans worth 10.2 million euros with the bank.

His wife was described in bank documents as a nurse manager with an annual salary of €47,000, who had taken a break from her career to care for her ailing father.

Glenlion House was described in bank documents as “very prestigious with cliff views in excellent surroundings”.

A statement signed by Mr Lynn and his wife said there were no existing loans in their name from Bank of Scotland Ireland or any other lender other than those declared in this form, the court heard.

A condition of the mortgage was that it was “the only mortgage on the property”, Mr McGrath said. Mr. Snow agreed.

The court saw documents signed by Mr Lynn and his wife which stated: ‘You are not permitted to create a second charge on this property’.

The loan was contracted in April 2007.

The court heard that after these matters were investigated, the bank determined that undertakings given by Mr. Lynn & Co’s lawyers had not been met and that the bank was not unable to protect the security of Glenlion House.

“The bank therefore suffered a loss of no less than 3.85 million euros,” Mr McGrath said.

It was later established that Mr Lynn secured another mortgage for Glenlion House from ACC Bank in October 2007, Mr McGrath said.

The trial, which is expected to last up to 14 weeks, resumes Monday before Judge Martin Nolan and a jury.

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