Trawl of boomtime hubris shone unflattering light on ‘frenzied’ era

The layers of evidence emerged like artefacts from another era, as if a time capsule had been secreted in the earth around 2007 and retrieved in the cold, unforgiving light of a time and place that has changed entirely.

The archaeologist scraping through old ruins has big-picture omniscience – he knows how the story ends – and the same was broadly true of the six-week excavation through boom-time Irish hubris that ended at the Dublin Circuit Criminal Court yesterday. At issue, however, was the place in that story of Thomas Byrne, the solicitor whose rise and fall itself reads like a parable on boom and bust.

That country – at least the one Byrne moved in – was a place where all it took to “sort out” a multimillion euro loan was a chat with Michael Fingleton in an executive box at Croke Park. A place where a suburban solicitor from Walkinstown could have 50 houses, a fleet of Bentleys and a vague reputation as a consultant to Prada and nobody gave any of it a second’s thought. A place where a couple of gardaí, eager for a slice of the property action, would band together and snap up a shopping centre in Odessa or a plot of land in Belize.

By the mid-2000s, the period in which the offences were committed, Thomas Byrne was flying high. His Walkinstown firm had outgrown his home office to become a busy practice with 15 staff and about 700 client accounts. He had built a lucrative sideline in property development; by his own estimate he owned “between 40 and 50” houses. An official from KBC said that when it secured Byrne as a customer in 2007, having pursued him for months, the bank viewed him as an “avid property developer” who earned €6.5 million a year from his solicitor’s practice and a consultancy business for “French fashion houses including Prada, Chloe and Roberto Cavali” (it didn’t ring any alarm bells that the houses were actually Italian). The bank believed Byrne had a net worth of €32 million, but neither it nor any of the other lenders seem to have made much effort to verify his documents.

It was in that “frenzied” climate, as Judge Patrick McCartan described the period, that banks were so quick to dispense loans to Byrne when he turned up with title deeds to a number of properties in the mid-2000s. According to the prosecution, Byrne fraudulently transferred properties belonging to his clients into his name so he could secure millions of euro in mortgages against them from six financial institutions (see panel).

The 50 counts of theft, forgery, using forged documents and deception, relating to transactions that took place between 2004 and 2007, involved the alleged theft of €51.8 million, making this Ireland’s biggest ever fraud trial to date.

Byrne pleaded not guilty to all charges. In the dock, he often sat with his head bowed, barely looking at anyone in court for hours on end. During breaks he would sit alone, ensconced in a Milan Kundera novel as he waited for proceedings to resume. His mood seemed to lift when he was joined by friends in the final weeks, and when the prosecution closed its case, he took to the witness box to give evidence in his own defence. “I know you’re only interested in a verdict, but I’m interested in the truth,” he declared.

Sharply dressed, as ever (“There’s no crime in clever accessorising”, he replied to laughter from the court when prosecution barrister Remy Farrell described him as a “snappy dresser”), Byrne was by turns emotional, clear-eyed and evasive in his five days in the witness box.

In his version of events, everything started to go downhill when he first met the property developer John Kelly through a mutual acquaintance, a radiologist named Mary O’Connor. Their first joint venture – an investment of £20,000 in a property deal – yielded them a profit of about £1 million, but things soon deteriorated, Byrne said. Gradually, Kelly “inveigled” himself into the office. He became aggressive and threatening, demanding money from Byrne to finance his “outlandish” lifestyle and hinting that his brother was “involved with people up the North”.

Kelly would demand money almost on a daily basis; at one stage in 2007, Byrne said, he was transferring between €450,000 and €500,000 a week into Kelly’s account to fund the day-to-day living expenses of a man who had a “voracious appetite for money, but no income of his own”.

The developer, a James Bond fan, owned several Aston Martins from the films and his yacht, which was moored in Spain before being repossessed, was named Thunderball. "007 Kelly," defence counsel Damien Colgan remarked drily.

Byrne described how Kelly would organise social events in order to appear to be “a mover and shaker” in the Irish economy. He said then minister for justice Michael McDowell spoke at one of his events and that the then tánaiste Mary Harney opened another.

Kelly’s problem, according to Byrne, was that he had reached his borrowing limits with some banks and couldn’t secure loans from others because he didn’t have a tax clearance certificate. So he “groomed” Byrne to borrow on his behalf. “I was the perfect candidate for him to introduce to the banks,” Byrne said.

On one occasion, Kelly told KBC official Noel O'Leary that Byrne was the "right-hand man" to the founder of
Prada.

“I’m not of course, but, having said that, if John Kelly had said I was one of Madonna’s backing singers, Noel O’Leary would have believed it because they wanted to lend money so bad.”

According to Byrne, the lenders were well aware the money was for Kelly, but did not question it. Byrne broke down as he told the court he was scared of Kelly; so much so that he started drinking heavily and taking tablets. “I was terrified of the man,” he said. “I was more in fear for my family’s welfare because he knew everything about them and he knew where they lived.”

While the solicitor was adamant he was under severe pressure from Kelly, he didn’t formally run a defence of duress. In his charge to the jury last Monday, Judge Patrick McCartan explained that if a defendant wishes to rely on duress, the threats against him must be linked to specific instances of offending instead of a general claim of intimidation. He must also be able to show that he reported the threats. But there was no evidence that Byrne complained to gardaí at any stage about being threatened by Kelly. Nor did he link the threats to individual offences. “The law says that’s not good enough,” the judge added. Byrne could claim duress “in the human sense” but not in a legal sense.

The trial heard from dozens of witnesses, but John Kelly was not among them. The garda who led the investigation, Det Sgt Paschal Walsh, said the “vast majority” of the criminal complaints were against Byrne, but that two complaints were against Kelly. He confirmed that Kelly is not before the courts on any charges.

Det Sgt Walsh also said that a total of €7.84 million was transferred from Byrne’s account into Kelly’s account in dozens of transactions between July 2005 and April 2007. However, the total amount received by Byrne in alleged fraudulent loans during the same period was €29 million.

“I knew the whole thing was going to fall apart, and it did,” Byrne told the court. The dénouement came in October 2007, when Barbara Cooney, an assistant solicitor in Byrne’s practice, discovered that he had forged her signature on a document related to a €4.5 million loan from Irish Nationwide Building Society.

In a fraught scene in the Walkinstown office, a tearful Cooney told the court, Byrne and Kelly both pleaded with her not to go to the Law Society. She remembered Kelly telling her that Byrne was suicidal and an alcoholic.

But the game was up. According to Byrne, Kelly told him to leave the country “or there would be serious consequences”.

The solicitor agreed to meet Mary O’Connor’s sister in a Centra shop she managed in Rathmines. There, in a vaguely filmic set-piece, he was brought into a walk-in freezer at the back of the premises. “I thought I was going to be killed. I really did,” he told the court. Instead, the woman handed Byrne €10,000 in cash and gave him a hug. He boarded a ferry to Holyhead, from where he drove on to London.

By then, the Walkinstown practice had been shut.

His staff had been sent home.

The music had stopped.

Thomas Byrne’s Web: How the Scheme Worked

Under scrutiny at Thomas Byrne’s trial were 12 properties, many of them close to where the solicitor grew up in Walkinstown, whose ownership was transferred to his name between 2004 and 2007.

One episode was sketched by prosecution barrister Remy Farrell as follows. In 2002, an elderly client of Byrne, Patricia Dunne, decided to make a will with his firm.

In it, she left her home on Bunting Road in Walkinstown to her children, including Michael Dunne, who was a close friend of Byrne.

In autumn 2007, when news began to emerge that Byrne’s practice was in trouble, several of his clients began to inquire about their properties.

“The whole thing came crashing down like a house of cards,” as Farrell put it.

When Michael Dunne made his inquiries, he found that his mother’s house had been transferred to Byrne’s name and that the solicitor had secured two mortgages against it.

The prosecution’s argument was that Byrne forged a deed of transfer for the house, claiming he had bought it from Ms Dunne in 2002 for €240,000 when she had never actually sold it.

There were some common features in several of the cases – Byrne knew a number of the people whose houses were transferred to his name (one was his former piano teacher) and, in some cases, he used the same property to extract money from multiple institutions.

One after the other, former clients sat in the witness box and confirmed the signatures on title deeds and deeds of transfer were not theirs.

Byrne pleaded not guilty to all 50 charges against him. He denied fraudulently transferring the ownership of clients’ homes to his own name and insisted these people had agreed to sell him the houses.

For example, he claimed the owners of two houses on Bunting Road in Walkinstown had agreed to sell their houses to him with a “long closing date” because his practice was unable to come up with the funds immediately.

Yet he acknowledged there was “not a single jot of paper, not a yellow Post-It” that documented what Farrell called “an extraordinary and unorthodox agreement”.

“This is very unfortunate given where you are now,” Farrell said to Byrne. “Yes, extremely,” came the reply.

After his firm was shut down, the clients had to say they never agreed to sell him their houses, Byrne maintained, because otherwise they would not have been compensated by the Law Society.

Of course, if the properties were fraudulently transferred, as the jury concluded they were, an obvious and unanswered question arises: how could Byrne’s “hare- brained scheme” (as Farrell put it) ever have succeeded unless none of his clients ever died or sold their houses?

Byrne’s transactions came at considerable cost to those clients. Paul Costigan, whose wife discovered in October 2007 that her mother’s home in Walkinstown had been registered in Byrne’s name, said the house was tied up in the courts for the next six years and that they recently sold it for less than half of what they were originally offered when Byrne became involved.