A commercial lawyer has told the Aer Lingus Holidays (ALH) fraud trial that he knew from the documents he was asked to prepare that the property deals in question were planned to be kept off-balance sheet.

Mr Randal Doherty said he had been retained by both Capital Leasing Ltd and both the Bank of Nova Scotia and the ABN Bank for two separate transactions. He had no involvement at all with legal personnel for ALH.

Mr Doherty told Dublin Circuit Criminal Court he had been involved in preparing documentation for similar transactions before for Capital Leasing and knew the ALH transactions were off-balance sheet. He could not recall being told that by anyone but he recognised it himself.

The banks were not lenders in the ALH transactions but were purchasers of the rental streams, though witness agreed with defence counsel Michael Cush SC that "ordinary people would call the purchase money the loan".

Mr Doherty said the money "flowed through Capital Leasing" to the banks from Cara Marketing in one transaction and from ALH directly in the second one to special bank accounts for that purpose. While the beneficial interest in the properties rested with Capital Leasing at the start, the legal interest was held by ALH to which the actual beneficial interest moved back at the end of the rental period.

It was day-30 of the trial of Mr Peter Keely, of Carrig Avenue, Dun Laoghaire and Mr Desmond P Flynn, of Tritonville Avenue, Sandymount, who are pleading not guilty to conspiracy to defraud.

Both men deny they conspired together and with Peter Noone to defraud Aer Lingus Holidays by misappropriating funds to purchase part of an apartment complex in Lanzarotte for their own use and benefit.

The hearing continues before Judge Kieran O'Connor.