Solicitor's defence accuses banks of reckless practices in fraud trial
on 22/10/2013 18:13:06
Defence counsel Damien Colgan SC put it to senior officials from both banks that their approval process for issuing loans to the accused may have been irresponsible.
Mr Byrne (aged 47) of Walkinstown Road, Crumlin is accused of theft and fraud offences totalling €51.8 million. The charges allege he transferred clients' homes into his name and then used them as collateral for property loans.
He has pleaded not guilty at Dublin Circuit Criminal Court to 51 counts of theft, forgery, using forged documents and deception between 2004 and 2007.
Seamus Corbert, a former senior manager with the now defunct Anglo Irish Bank, confirmed that the bank granted Mr Byrne a €3.2 million loan on the back of 13 properties which were worth about €5 million.
Mr Byrne told the bank in 2006 that he intended to use the loan to buy a 15 acre site in Shankhill and a one acre mixed development site in Walkinstown.
Mr Corbert said he couldn't remember if he carried out enquires into these sites before issuing the loan. He conceded to Mr Colgan that it was "technically" possible that Mr Byrne could take out a loan without these sites existing.
However, he added that it was the 13 other properties that Anglo would be relying on as security if the borrower defaulted.
Mr Farrell asked the witness "if it was not reckless" to not carry out enquiries into the purpose of a commercial loan.
Mr Corbert replied: "I'm not saying I didn't carry out enquiries"
The witness said Anglo were happy to rely on Mr Byrne to provide proof that he owned the properties. The bank's guidelines state that this should be done by a borrower's solicitor but because Mr Byrne was a solicitor himself, the bank allowed him to provide his own proof.
Mr Corbert insisted that valuations were carried out on the properties Mr Byrne was using as security. The court heard that documents recording these valuations could not be located in the bank's record.
Conor Daly who was previously head of corporate risk at EBS said he wasn't with the building society when over €10 million was given in loans to Mr Byrne.
Mr Colgan put it to the witness that the reason he was appearing in court is that he is seen by EBS as "a safe pair of hands" because he wasn't with the institution at the time of the loans.
Counsel suggested that he had "come here to bat for EBS" in relation to "reckless lending" on their part.
Mr Daly responded that the documents prepared before the loans were issued "were in order". He added he was not in position to say whether he was regarded "as a safe pair of hands" by EBS.
The trial continues before Judge Patrick McCartan and a jury of seven men and five women.