The Mullin trial and the €500,000 transfer mystery

The theft trial of former rugby star Brendan Mullin heard about the inner workings of the "bank for the rich" and the mystery of a half million euro transfer that over a decade later has never been tracked down.

At the centre of the three-week Dublin Circuit Criminal Court trial was a company called Spice Holdings, which the court heard Mr Mullin introduced to the private bank and which was sent a €500,000 transfer from Bank of Ireland Private Bank in 2011 that has never been recovered.

Mr Mullin, 61, initially stood trial accused of 15 charges - nine counts of theft, five of false accounting and one count of deception. Towards the end of the trial, the jury was directed by the trial judge to find Mr Mullin not guilty of the deception charge.

The prosecution alleged that Mr Mullin used his position as managing director of the private bank to steal €573,281 on dates between 2011 and 2013.

These charges comprised the €500,000 which was transferred to Spice Holdings in 2011 and just over €61,000 in Mr Mullin's personal legal fees that were paid by the private bank in 2012 and 2013.

It also included payments to Grant Thornton (just under €6,000) and Beechwood Partners accountants (€6,150) which Mr Mullin alleged the bank had agreed to pay on his behalf as a gesture of goodwill when his application for a personal loan was refused.

Ultimately, the jury would return guilty verdicts in 12 of the 14 charges before the court, and not gulity verdicts on two charges relating to the alleged theft of €6,150 from the private bank for work carried out for Mr Mullin and a related false accounting charge.

The jury was told that this was a theft trial in which no money was missing - Mr Mullin arranged for €500,000 to be paid to the private bank in 2015 because, the defence asserted, he felt under pressure by the bank's solicitors and did not want such a serious allegation hanging over him.

Defence counsel said Mr Mullin paid the bank through his company, Quantum, on the basis that Spice Holdings would square off this money with the company "at some ill-defined point in the future".

The prosecution said this payment was an attempt by Mr Mullin "to make it go away".

Either way, the fact remains that half a million euro ended up in a Channel Islands bank account and has not been traced since.

The rainmaker

The three-week trial heard defence assertions that despite not having a background in banking, Mr Mullin was recruited by Bank of Ireland Private Bank in 2010 as a "rainmaker" to head up the "bank for the rich" and bring in high net worth customers.

Before he was recruited by Bank of Ireland, Mr Mullin, a former rugby international who played for Ireland, had worked for stockbrokers and also had his own investment business, Quantum Investment Strategies.

Brendan Grehan SC, defending, told the jury that Mr Mullin was surrounded by competent career bankers and his role within the private bank "doesn't seem to be incredibly clear other than he signed lots of pieces of paper that others had already signed".

The court heard that when he joined the private bank, Mr Mullin was being sued by a couple in relation to investments where they claimed they made a loss, dating back to around 2007. It was these litigation fees that were at the heart of the McCann Fitzgerald matter.

In relation to the €500,000 Spice Holdings transfer, the court was brought through a chain of events in 2011 in which life assurance clients were owed money from different arms of the bank in relation to the pay-out of claims.

The court heard Bank of Ireland Private Bank and New Ireland Life Assurance -both arms of the bank's Wealth Management Division - reached an agreement to equally split the refund due to customers, which amounted to about €1 million.

As a result, New Ireland agreed to pay the private bank €500,000 to help pay off the customers. In December 2011, €500,000 was transferred from New Ireland to Bank of Ireland Private Bank. However, it was then sent to Spice Holdings with Northern Trust.

These funds remained in the account for six months, before they were transferred in June 2012 to another account in the name of Spice Holdings, which was held by Royal Bank of Canada, in a branch in Jersey in the Channel Islands.

Gardaí have not been able to track down the money or discover what happened to it, the court heard. The defence submitted a "veil was drawn over matters by Royal Bank of Canada" and investigators "got nowhere with them". This was a huge gap in the prosecution's case, they submitted.

The prosecution alleged the transfer was for Mr Mullin's benefit, while the defence maintained there was no evidence whatsoever that Mr Mullin or anyone connected with him benefitted from it. It was a "processing error", Mr Mullin told gardaí when interviewed.

The court heard Mr Mullin, of Stillorgan Road, Donnybrook, Dublin 4, has no previous convictions and no investigations outstanding against him.

Spice Holdings

In 2010, Mr Mullin "did what he had been recruited to do" according to defence counsel, in terms of bringing in new business to the bank. He introduced Spice Holdings in anticipation this company would bring in €4-5million to the private bank.

The court heard that in 2011, an issue arose in the bank with a niche life assurance product. It emerged that a small number of clients were not aware of a clause stipulating that if their spouse died within five years of taking out the life assurance, they could get their money back and not make a loss. This was at a time when the financial crash had occurred and the value of such products had fallen, the jury was told.

New Ireland and BOIPB undertook to divide the money owed to customers, with the court hearing this amounted to around €1 million.

Sean Casey, then managing director of New Ireland, described to the jury how he met Mr Mullin to thrash out how they should divide the claim and that they agreed to split the bill, with New Ireland pledging to transfer €500,000 to private banking.

It was during a meeting in July 2011 that Mr Casey told the court Mr Mullin asked him if this payment could be sent directly to a special client account, to which Mr Casey replied: "Not a chance."

The trial heard the money was duly transferred to private banking's regular account from New Ireland, but that it came back within a couple of days, with the reference 'Spice Holdings' on it. This surprised Mr Casey, who said he had never heard of Spice Holdings and who was now in a position that he still owed half a million to the private bank.

Mr Casey told the jury repeatedly that he was "very happy" to pay the money to private banking and that he felt it was the bank's moral responsibility to pay the customers.

Mr Grehan later told jurors they may have been surprised to hear about a bank official "lying awake at night worrying about the moral responsibility to his customers" and "deciding free money must be given to these people even though their legal entitlement had expired".

Once he had ascertained that the refund had come from the bank and not Spice Holdings, Mr Casey said he was of the opinion that private banking could come and get the money from New Ireland if they wanted it.

He told the court that in the meantime, the €500,000 was "resting in our account for future payment". ("I don't know if he was being serious here," Mr Grehan later quipped.)

The court heard evidence of further attempts by Mr Mullin to have the New Ireland money sent to a private client account, which the jury was told was "unusual" and "not standard practice".

The money was eventually paid to private banking's regular account in December 2011.

Concerns raised

Kim Lloyd, who worked in compliance for the private bank, told the court she had also never heard of Spice Holdings when Mr Mullin told her in July 2011 that he was looking for the New Ireland transfer to go directly to them.

When she raised concerns about it, she said Mr Mullin told her it was "an exceptional item" and "wouldn't be repeated". She said he counter-signed the authorisation letter in her presence and that it had already been signed by two bankers - head of finance Paul Gallagher and client services director Nicola Johnston.

Nicola Johnston told the court that later the same evening, Mr Mullin - her direct line manager - came to her office and asked her to sign the authorisation letter, despite her saying she knew nothing about it. She said he stood over her desk and she felt she had "no alternative other than to sign it".

She said she felt extremely uncomfortable afterwards, as signing an authorisation letter without the supporting documents was known as 'blind signing' and was a sackable offence. Ms Johnston said she cancelled the payment the following morning and informed Mr Mullin she had done so.

Ms Johnston said the next thing she heard about Spice Holdings was when she was informed by Mr Gallagher in an email in December 2011 that the transfer had been signed off on. When she queried it, Mr Gallagher told it was to do with "error and breaches" on the New Ireland side and they were not privy to the details.

Ms Johnston said this gave her "no comfort whatsoever". She said she was heavily involved in the New Ireland issue and knew the names of all the impacted clients. "Spice Holdings was not one of those clients," she told the court.

Defence counsel said Ms Johnston's account of Mr Mullin standing over her desk that evening was "fiction" and "nonsense", pointing out that Ms Lloyd, who kept a contemporaneous note of events that day, had stated Ms Johnston had already signed the letter when she saw it earlier that day.

They noted Ms Johnston had no written record of her version of events and that although she said she talked to many people in the bank about the Spice Holdings issue, there was no evidence from any other witnesses to corroborate this.

McCann Fitzgerald

In 2012 and 2013, the private bank paid McCann Fitzgerald solicitors a total of €61,535 for legal advice it had given Mr Mullin in relation to his personal litigation issue.

A number of witnesses gave evidence in relation to four invoices, two for €18,450, one for €18,792 and one for €5842, with the court hearing that the firm re-addressed the invoices from Mr Mullin's home address to the bank's on his instructions.

One of the most senior of the firm's witnesses was Roddy Bourke, a litigation partner who represented Mr Mullin in his personal litigation case.

Mr Bourke told the court that Mr Mullin made it clear to him that the bank was paying for a portion of his legal fees and that another partner in the firm, Mark White, was of the understanding the bank was "going to stand behind Mr Mullin for 50 per cent of his costs".

It was Mr Mullin's position that he made the firm aware from the beginning that he was personally responsible for his legal fees and that he had money set aside for them.

The defence case was that the invoices were paid by the bank as a result of "mix-ups, confusion and inattention" and that the invoices may have been mistakenly put in a bundle of client invoices and paid in error.

When Bank of Ireland contacted McCann Fitzgerald to query the invoices at the end of March 2013, Mr Mullin went to McCann Fitzgerald in early April with his cheque book, paid the invoices and got them to refund the bank.

The court heard the payments came to light in the private bank when one of the McCann Fitzgerald invoices was discovered to have been processed through an account referred to in court as the 'Case X' legal costs account. The court heard this was an account the private bank had set up to cover the costs of a highly litigious, high value property debt case.

Des Hanrahan, then a director of Specialist Property Group in Bank of Ireland, told the court that the invoice had been signed by Mr Mullin and another bank worker, who had "no rights to that account".

The discovery of this invoice sparked an internal investigation into invoice and payment discrepancies within the bank, leading to Mr Mullin's suspension and eventual resignation from the private bank in July 2013.

Bank criticism

Prior to Mr Hanrahan giving evidence, Judge Nolan expressed his frustration in the absence of the jury at what he called the "piecemeal co-operation" from Bank of Ireland.

The prosecution was in possession of just part of a copy of a document Mr Hanrahan had created relating to his interactions with Mr Mullin in March 2013, with the court hearing the original document remained in Bank of Ireland headquarters.

Judge Nolan ordered counsel to tell the bank to bring it to court.

"I'm fed up telling the bank this is a criminal prosecution," he said. "I don't want to get cross, but I have to repeat myself in these matters."

The judge later asked: "Is the Bank of Ireland treating this court on a need-to-know basis? I want the full note Mr Hanrahan made. Tell this auditor if he doesn't disclose it, I'll be sending the sergeant down to get it. I'm fed up with this piecemeal co-operation."

The judge said the bank was answering its obligations to the court "in a very narrow way". The court later heard a bank worker had been dispatched to bank headquarters to find the original document.

Closing speeches

In his closing speech to the jury last week Dominic McGinn SC, prosecuting, told jurors they didn't have to consider the "complex world of banking" but only Mr Mullin's behaviour at the time. "What the case boils down to is dishonesty," he said.

He told the jury paying the money back was not a defence, if the intention was always to deprive the owner of it.

"Was it a big mistake, a misunderstanding, or was (Mr Mullin) doing it dishonestly? That's what the case is about."

In his closing speech to the jury, Mr Grehan said the outstanding characteristics in the case were the extraordinary delay in bringing it to court and the fact that the bank was not at a loss.

Mr Mullin arranged for his company Quantum to make a €500,000 repayment to the bank because he felt under pressure and to ensure there was no serious allegation hanging over him, the jury was told.

But because of the delay in bringing the case some 10 years later, for which there is no good reason, Mr Mullin has "carried on with his life with the burden of this historic matter hanging over him like the sword of Damocles, not knowing when it is going to fall", Mr Grehan said.

"Mr Mullin didn't go off and hide somewhere," Mr Grehan said. "He stayed here and dealt with people. He stayed and got on with his life and the ups and downs that are inevitably the consequence of a spectacular fall from grace."

The court heard Mr Mullin, who did not give evidence at trial, was not interviewed by gardaí until 2018 and not charged until 2021.

Defence counsel said this delay made it difficult for people to recollect events and it also led to the issue of missing witnesses, such as Paul Gallagher whose name came up several times and whom the jury was told was unavailable.

Mr Grehan submitted that Bank of Ireland "prioritised getting its money back over seeking to advance its investigation" and that the garda investigation "only progressed when Bank of Ireland was satisfied it had its money back".

In relation to the Beechwood and Grant Thornton allegations, the court heard the bank never came looking for this money and the firms were only made aware of the allegations "many years later" when the garda investigation was under way.

Defence counsel submitted it was agreed that some of this work would be paid for by the bank and "perhaps that's why the bank never sought any of this money back from Beechwood or Grant Thornton".

He urged the jury to acquit Mr Mullin of all charges.