The day I came face to face with Michael Lynn, the 'Scarlett Pimpernel'
Legal Editor Dearbhail McDonald's new book points an illuminating spotlight on the players behind our catastrophic economic collapse
Published 18/09/2010 | 05:00
Michael Lynn was by no means the biggest villain in Ireland's economic meltdown, but he was the first of many actors who took centre stage at the Four Courts as Ireland's runaway property boom ground to a halt three years ago.
When, after 15 years of extraordinary growth based largely on property speculation, the Irish economy finally crashed, Ireland's bankers, developers, struck-down scions and a parade of bent solicitors tried to keep themselves out of sight.
But they couldn't keep themselves out of court -- and it is in the courtrooms that the full, sickening drama of the Irish meltdown is being played out.
In her new book 'Bust', the Irish Independent's Legal Editor Dearbhail McDonald paints a gripping picture of the human drama -- and the cost -- of an economic catastrophe.
Using her unmatched legal contacts, she has been following the high-stakes rows through the courts that have provided ample evidence that the Celtic Tiger was little more than a mirage: a massive pyramid scheme.
It is the courts that are writing the first draft of the sorry demise of the Celtic Tiger: in her first chapter Dearbhail McDonald tells the extraordinary story of rogue solicitor Lynn ...
In hindsight, it wasn't the smartest thing I have ever done in my journalism career; travelling alone, on a hunch, to the Algarve to spend time with a man I had never met -- a man who had refused to tell me his real name and gave me no details about his background.
'Seamus' had phoned the Irish Independent news desk to talk to me about Michael Lynn, but refused to give me any details about the wealthy solicitor, the original canary in the coalmine and the first real harbinger, in October 2007, of Ireland's looming economic crisis.
Lynn (now 40), the Mayo-born former wedding singer turned multimillionaire legal eagle and property guru, fled Ireland in December 2007 with a bench warrant for his arrest and an €80m mortgage fraud trailing in his wake.
His choice of refuge from the reach of Irish law enforcement was the Portuguese Algarve, where he had hoped to raise a stock-market listed property conglomerate from the sandy banks of a fishing village where he was building a series of apartment blocks he flogged to "buckaleiros", his term of endearment for Irish property investors.
I had broken the Michael Lynn story that October in a front-page splash about a high-profile but as yet unnamed solicitor who specialised in property law and who had engaged in an alleged €30m mortgage fraud involving four banks.
I didn't know the half of it: it would later emerge that the true figure was more than €80m and that Lynn had taken out mortgages on false pretences from nearly every bank that operated in the country.
When the Law Society, the ruling body for solicitors, sought to cross- examine Lynn in court about his property dealings involving multiple bank loans drawn down on individual properties, he fled the country, sparking a global Interpol alert and a media frenzy.
Criss-crossing the Atlantic and Eastern Europe, he was soon dubbed Ireland's Scarlet Pimpernel following a series of sightings, some real, many imagined.
Seamus, who was anxious about the security of his phone line, would only speak to me if I travelled to Portugal to meet him.
Initially, I refused to play ball.
It was February 2009 and the country was convulsed by the nationalisation of Anglo Irish Bank, revelations about the Anglo 10, the scandal surrounding Irish Life and Permanent's €7bn deposit swap with Anglo and the aftershocks reverberating from the Government's unprecedented -- now hotly disputed -- €400bn bank guarantee.
To put it mildly, there were probably more important stories to pursue and better things to be doing than chasing up vague lines on a seemingly old news story like Michael Lynn, but, with great forbearance on the part of my senior editors, I travelled out to the Algarve.
The trip was intended to be low key, a 24-hour turnaround to verify Seamus's credentials and to test the quality of his information.
Though curious about Lynn, whose nickname in Portugal is 'La Cucaracha,' -- the cockroach -- I had no intention of meeting him.
But, it seemed, he had every intention of meeting me.
Seamus insisted that he would collect me in person at the airport: I preferred to rendezvous at a neutral but very public location.
Seamus persisted and I made a mental note to ensure that we both travelled to the hotel where we had agreed to meet in separate vehicles.
When we met, Faro Airport was all but abandoned as my luggage had taken an age to emerge from the carousel.
I learned Seamus' real name when we exchanged passports and knew, from previous research, that he had worked for Lynn on Costa de Cabanas, his flagship housing development in the Algarve.
Seamus insisted on driving me to my hotel but as we walked to his jeep I could not avoid the feeling that it was not a particularly good set-up: no one knew where I was or who I was with and I knew nothing about Seamus or what side he was on.
As I climbed into the front seat, cursing my own stupidity for not having better personal security arrangements in place, I resolved to thank Seamus for his kind offer and head back to the terminal when I heard raised voices and the phrase "I cannot fucking believe this".
I couldn't believe it either when I looked in the rear-view mirror to see Michael Lynn.
Dressed like a stereotypical Irish gringo, Lynn, in a badly matched pair of beige shorts and a screaming orange T-shirt, squared up to Seamus armed with nothing more than a mile-wide sneer on his face.
I recall thinking, in that flash moment, that Lynn would have looked more at home in an orange jumpsuit; the all-in-ones worn by American prison inmates.
Seamus tried to hustle Lynn away from the jeep, telling him -- in unrepeatable terms -- to leave the car park.
Lynn relished the confrontation, constantly edging towards me to gauge my reaction.
It was swift: I leapt from the jeep, convinced that my new contact was in cahoots with Lynn.
As I marched off towards the terminal, Lynn did too. Seamus, whom I instantly accused of enticing me out to Portugal on Lynn's behalf, hauled me back and implored me to give him the benefit of the doubt.
I did, once I realised that he was more freaked out by Lynn's advent than I was.
Lynn then sauntered back to the jeep and eyeballed us both before swaggering away like a schoolyard bully who had defeated an opponent.
As far as Seamus and I could tell, the confrontation was designed by Lynn as a marker: to let us both know that he knew we had made contact.
Later, when I drove past Lynn's gated home in Tavira with another Portuguese-based contact, the car in which we were travelling was trailed by another car that had appeared out of nowhere.
We both presumed that the car was part of Lynn's security detail.
This contact begged me to consider staying in another hotel. I refused, but telephoned a legal contact and a member of the gardai in Dublin to tell them where I was staying.
Just in case.
Seamus and I laugh now about the fracas in Faro, but the trail of destruction wreaked by Michael Lynn is no laughing matter.
In February 2007, during one of his daily "pulse meetings", Lynn flew into what was becoming an ever-increasing number of tantrums.
Admonishing his staff because Cabanas was plagued by incomplete sales, bounced cheques and poor marketing, Lynn lambasted his lieutenants over their failure to fast-track his ambitious property plans.
What his lieutenants did not know was that their boss had just embarked upon a frenzied personal borrowing spree that would see his dreams turn to dust.
Lynn, who lived with his wife Brid Murphy in an elegant, 4.7 acre, €5.5m mansion at Howth Head with its own private beach, fled Ireland before the Law Society could query him on his borrowings.
A bench warrant was issued for his arrest as he had failed to turn up in court, but he could not be extradited as there were -- and still aren't -- any criminal proceedings pending against him.
A Law Society investigation later revealed that Lynn used his client's monies to fund his opulent lifestyle and that he had raised some €80m worth of mortgages by taking out multiple loans against single properties, unbeknown to the lenders involved.
Within days it emerged that another lawyer, Thomas Byrne, had racked up huge debts -- eventually reckoned at almost €60m -- by abusing the solicitor's undertakings system and stealing from banks and clients.
Other lawyers in trouble included a Dublin duo who avoided being struck off the solicitor's roll despite operating a €32m tax scam.
Although it was denied at first, the saga of the solicitors was a microcosm of Ireland's boom and bust and as the storm clouds gathered over the solicitor's profession, a hurricane was forming in the wider economy.
Ultimately, what saved the legal profession from further disgrace was the emergence of ever more colourful rogues and even greater scandals: the sins of the solicitors would soon be dwarfed by those of the bankers and the developers, as detailed in Bust.
The tales emanating from the courts have shone an extraordinary light on the way we have lived in the past 15 years, chronicling the often bizarre stories behind our staggering reversal of fortune.
From Breifne O'Brien, the perma-tanned socialite who ran a pyramid scheme from a Dublin suburb, to the leading developers with a Midas touch whose business empires now lie in ruins.
From Sean Quinn, Ireland's former richest man who lost billions gambling on shares in Anglo Irish Bank to mere mortals such as Caroline McCann, an unemployed and mentally ill mother of two whose desperate bid to stay out of jail over her failure to pay her credit-union arrears led to the striking down of the Government's Dickensian debtor's laws.
There is the strange case of the GAA hero and the Fianna Fail star, the bankruptcy of Ireland's most charismatic banker Sean Fitzpatrick, and the Irish Glass Bottle site, the toxic dump that contaminated everyone who touched it.
Bust, published by Penguin, costs €17.99 and will be in the shops on Monday. For almost two years after the collapse of Lehman Brothers, the Irish Government perpetuated a myth that the collapse of the investment banking giant and the financial mayhem it caused was the immediate source of Ireland's ills.
But Ireland was marching headlong towards insolvency with or without Lehman.
The one constant during this time of epic change has been the courts which continue to reflect who we are and where we have been.
It is three years since High Court Judge Peter Kelly directed that files on Michael Lynn be sent to the garda fraud squad because the judge believed that they contained prima facie evidence of white-collar crime.
Yet not one rogue solicitor or any member of Ireland's banking elite has been prosecuted and convicted, raising serious questions about the ability of the State to prosecute white-collar crime.