€20m probe as another solicitor is shut down
Related Articles
Wednesday October 24 2007
THE Law Society has shut down the practice of another high-flying solicitor who it is investigating over a possible €20m multiple mortgaging scam.
It is the second time the society has closed a solicitor's practice in less than two weeks.
There are now widespread concerns that many more solicitors are using their clients' accounts to fund property deals and abusing legal undertakings that allow loans to be drawn down on the word of a solicitor.
On Monday, IIB Bank secured a High Court injunction against Dublin solicitor Thomas Byrne, practising as Thomas Byrne & Company, Walkinstown Road, preventing him from reducing his assets below €9m. The solicitor, who also has an office in Sandyford Industrial Estate, has been previously investigated by the Law Society and censured for running up almost €2m deficit in his client accounts.
However, he was not suspended or struck off the solicitors' register, despite such a serious breach.
Instead, last December Mr Byrne was fined €15,000 for breaching several solicitor's accounts regulations and, following a new investigation earlier this week, the governing body for solicitors yesterday went to the High Court to seek an order freezing his accounts.
Both injunctions were granted and the matter will come before the High Court today.
On Thursday, five banks will apply to the High Court to have their mortgage loans registered against Mayo-born solicitor Michael Lynn.
Mr Lynn is alleged to have taken out multiple mortgages on various properties with several major Irish banks and may owe as much as €50m.
In that case, each financial institution had previously thought its loan was secured, based on its claim over the property asset in question, which was drawn down on the basis of undertakings given to the banks by the solicitor.
But it has since emerged that many of them had no charge over any assets whatsoever.
It is understood that Mr Byrne, who runs regular breakfast seminars for key corporate clients, gave a series of undertakings to banks in relation to multiple mortgages taken out on several properties.
Before the purchase of any property, a solicitor provides the bank with an undertaking that the deed or title of the property has been verified and this allows the mortgage transaction can go ahead.
On foot of solicitors' undertakings, the bank releases the funds, but the practice of solicitors' undertakings and verification of legal title by solicitors will now be reviewed in light of the alleged multiple-mortgaging. In September, a colleague blew the whistle on Mr Lynn's practice and, following the expose by the Irish Independent, another whistleblower has come forward in relation to Mr Byrne, whose practice has been shut down.
Last year, Mr Byrne had used clients' funds for his own personal transactions.
He also failed to keep proper books of accounts and failed to ensure that all inter-client transfers were supported by documentation on the file.
Last night, the Law Society said it was not in a position to comment on the matter but signs posted outside Mr Byrne's practice advised clients to seek a new solicitor.
- Dearbhail McDonald Legal Affairs Correspondent
