Official admits bank didn't notice solicitor’s fake links to fashion giants
A lending official has admitted it “didn’t ring any alarm bells” when former solicitor Thomas Byrne claimed to be a consultant for French fashion houses which were actually Italian.
A former official with IIB, now KBC bank, told Mr Byrne’s €52 million theft and fraud trial that they agreed to lend €9 million to the solicitor after assessing him as having a €6.5 million annual income from his solicitor’s practice and claimed fashion consultancy.
This was in addition to the rental income from his portfolio of properties. The bank believed Mr Byrne had a net worth of €32 million.
Former KBC official Barry Keely told the court that Mr Byrne claimed to be employed by “French fashion houses” including Prada, Robert Cavalli and Chloe. The solicitor claimed to receive €4 million a year for this work.
Defence counsel Gerardine Small BL pointed out that Prada and Robert Cavalli are Italian fashion houses not French and asked Mr Keely if this error caused alarm with the loan assessors.
“Is it not a case where alarm bells should have rung in the credit committee when they saw a Walkinstown solicitor earning €4 million from incorrectly named fashion houses?”
Mr Keely replied that you could say that in hindsight but not at the time. He said the bank weren’t relying on the fashion house income to pay off the loan and that Mr Byrne’s other income was more than enough to cover repayments.
Mr Keely said that Mr Byrne made a single payment on the €9 million before the Law Society froze his accounts. He said the bank realised there was a problem in October 2007 and decided to examine the collateral Mr Byrne had used as security.
They found that of the 19 properties the accused used as collateral, only two were valid. The rest were either not owned by Mr Byrne, were promised to other banks or both.
Mr Byrne (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.
The trial continues before Judge Patrick McCartan and a jury of seven men and five women.