A loan exceeding €2.7million would not have been approved by Bank of Ireland if it had been aware of false or misleading documents being submitted during the application, the multimillion-euro theft trial of former solicitor Michael Lynn has heard.

Mr Lynn (53) is facing 21 charges relating to the alleged theft of about €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 23rd, 2006, and April 20th, 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 Tuesday, Arthur King told Patrick McGrath SC, prosecuting, that, prior to his retirement, he worked for a subsidiary of Bank of Ireland and in 2010 he produced copies of records from Bank of Ireland Mortgages to gardaí.

Mr King said documents before the court showed that Mr Lynn wrote to the bank in September 2006 requesting mortgages for the purchase of eight properties in Co Dublin with a request for 85 per cent of their value, namely €2,742,000.

He identified a document as being a loan offer sent by the bank to Mr Lynn for him to sign and return it, thereby accepting the conditions contained within the loan offer.

Mortgage instalments

Mr King said that, in December 2006, a cheque was issued in the amount of €2,742,000 to Mr Lynn. He said mortgage instalments were paid monthly to the bank throughout 2007, but payments ceased after a final payment in September 2007.

He said that following the non-payments, inquiries were made which established a number of other mortgages were drawn down on the properties by Mr Lynn from other financial institutions. He said Mr Lynn was never registered as the owner of the properties.

Mr King said that two conditions contained within the loan offer which were not complied with was that first there was no legal charge over any of the eight properties, and second that Mr Lynn was not registered as the owner of the properties as he had undertaken.

He said this was a direct breach of the undertaking to the bank which Mr Lynn signed for in this document and was therefore not in position to fulfil the requirements of the loan. He said as a result of this failure, the bank was exposed to a loss of a significant portion outstanding.

Mr King said that had the bank been aware of false or misleading documents being submitted during the application and that an undertaken was not going to be adhered to, the loan would not have been approved and the cheque would not have been issued.

Giving evidence earlier in the trial, John Kinsella told Mr McGrath that he is a partner at accountancy firm Kinsella Mitchell & Associates, a firm which became independent auditors for a company owned by Mr Lynn and became reporting accountants for his legal practice.

Statement of affairs

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

Mr Kinsella told the trial that two documents, which purported to be statements of affairs for Mr Lynn that were signed by his firm, did not in fact bear the firm’s signature and were not documents produced by his firm.

Giving evidence earlier on Tuesday, Mr Kinsella said that a document which purported to be a statement of affairs, which was submitted during a mortgage application to ACC Bank for the purchase of a property in Howth, Co Dublin, was not a document prepared by his firm.

Mr Kinsella said the signature and stamp which were on the document were not the signature and stamp of his firm. He said the last statement of affairs his firm provided for Mr Lynn was in July 2006 and this document was dated in September 2006.

He agreed with counsel that when this purported statement of affairs is compared with another purported statement of affairs, which the prosecution says was submitted during a mortgage application to Bank of Scotland Ireland for the same property in Howth, Co Dublin, it shows both contain “very different portfolios of documents”.

Mr Kinsella agreed he had already confirmed that the other purported statement of affairs was not a document produced by his firm.

The trial continues on Wednesday, before Judge Martin Nolan and a jury.