Former senior PTSB official denies lender turned blind eye to Lynn loan condition

‘There was no culture in the bank of anyone turning a blind eye to the conditions’

A former senior bank official has denied Permanent TSB "turned a blind eye" to a condition that Michael Lynn pay off a €1.9 million loan, his multi-million euro theft trial has heard.

Former solicitor Mr Lynn (53) is on trial at Dublin Circuit Criminal Court accused of the theft of about €27 million from seven financial institutions.

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’s 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.


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.

Sean Alger, former head of the commercial division in Permanent TSB, gave evidence on Friday.

Under questioning from defence counsel Feargal Kavanagh SC, he said the bank had “robust” procedures in place to analyse credit and borrowings and there was a “clear basis under which loans were made”.

In April 2007, Mr Lynn had borrowings of €1.9 million with the bank when he applied for a €4.9 million loan to purchase eight residential investment properties in various locations in Dublin, the trial heard.

The court has heard that one of the conditions was that Mr Lynn was supposed to have paid this €1.9 million loan off, but there was a delay in doing this.

Mr Kavanagh put it to Mr Alger that the bank was “happy to have the €1.9 million roll over, happy to leave it 18 months or two years without having been redeemed”.

Mr Alger replied that if it was a condition of the loan that the money be repaid, then he would expect it to be complied with.

When asked if this was something the bank would “turn a blind eye to”, Mr Alger replied: “No, a blind eye wouldn’t be turned to something like that.”

He agreed that such a delay would normally raise a red flag in the bank, but that he was “not close enough to the detail” in the case. He said it was possible there had been an error or oversight on the part of the bank, but reiterated that he was not aware of any such error being made.


“There was no culture in the bank of people ignoring conditions,” he said. “Errors can occur in every organisation. I’m not saying an error occurred, but they can happen.”

Mr Kavanagh put it to Mr Alger that the bank gave Mr Lynn the further loan of €4.9 million “to set him right” and to “put right the condition not complied with”.

“I can’t answer that,” Mr Alger replied.

Mr Kavanagh also put it to Mr Alger that “all of the senior people [in the bank] have shied away from coming to court”, causing the prosecution to object that this was “totally inappropriate” and an “unfounded allegation”.

Judge Martin Nolan reminded Mr Kavanagh that this was an adversarial court. “If you want to bring anyone to court you can,” the judge said.

When asked by Judge Nolan if he was disputing that the loan was authorised by the bank, Mr Kavanagh said he was not. “I am disputing the circumstances in which the loan was given,” he said.

Under re-examination from Karl Finnegan, prosecuting, Mr Alger said the primary responsibility of abiding by the conditions of a loan lay with the borrower. “The borrower must in the first instance adhere to the conditions,” Mr Alger said.

He said the bank was then responsible for ensuring the conditions were adhered to. “There was no culture in the bank of anyone turning a blind eye to the conditions,” he said.

Mr Finnegan brought Mr Alger through an email between bank officials which the court has already seen.


In it, then Blanchardstown branch bank manager Ciaran Farrell told a commercial lending manager that Mr Lynn had told him the delay in repaying the €1.9 million loan was due to “confusion” in his office and that Mr Lynn was “embarrassed and annoyed” about it.

Mr Alger said this email showed the bank was “absolutely not turning a blind eye” to the repayment of the loan. “It’s been explained and the bank is happy to accept the borrower’s explanation as to why they didn’t comply with the conditions,” he said.

The trial continues next week before Judge Nolan and a jury.