A key banking executive has shared disturbing details at a trial of how the director of Bank of Ireland Private Bank, Brendan Mullin, requested him to execute a transaction of €500,000, which was to be deposited into a customer’s account. This statement came from Peter Gray, who held the position of chief finance officer at New Ireland Life Assurance and owed half a million euro to private banking. His statement acknowledged that Mullin’s request in August 2011 was neither standard nor routine.
Mr Gray has been testifying at the Dublin Circuit Criminal Court against Mr Mullin – a former member of the Irish rugby team. Mullin, 60, is facing accusations of purloining over €570,000 from Bank of Ireland Private Bank among other charges between 2011 and 2013 while acting as the managing director. He, however, refutes all the 15 charges levelled against him.
According to the evidence presented by the prosecution, it is alleged that Mullin, a resident of Stillorgan Road in Donnybrook, Dublin 4, siphoned off €500,000 from Bank of Ireland due to miscommunication within different sectors of the bank. The misappropriated money, as per claim, landed in Spice Holdings – a company registered in British Virgin Islands.
The trial has also established that both Bank of Ireland Private Bank and New Ireland – both falling under bank’s Wealth Management Division – had agreed to jointly refund €1 million to their customers in relation to life insurance claims. In his deposition, Mr Gray informed the court that a payment of €500,000 was transferred to the private bank by New Ireland in late July 2011. Intriguingly, however, the transferred amount was given back within a few days.
This occurrence, as Mr Gray pointed out, was the initial indication of something being awry. Moreover, Mr Gray went on to state that in a phone call with Mr Mullin in late August 2011, another request was made for transferring the payment to a different account. It was also suggested by Ms Mullin that there were “two more potential accounts”, which were in fact client-related accounts managed by private banking.
According to Mr Gray, he was unsure if the account in question belonged to Spice Holdings. He recollects a conversation where it was communicated that a more simplified administrative process for private banking would be the result if payments were transferred in a certain manner. He also informed Mr Mullin that authorisation would have to come from the director of New Ireland, Sean Casey, or the compliance head if a different account was slated for payment. Mr Mullin’s explanation made Mr Gray uncomfortable.
Gray made a note of this conversation due to its unique circumstances: receiving a call from a different company’s managing director and a request for a client account payment.
Gray was informed by Paul Gallagher, the former head of finance in the private bank, via a series of emails in October 2011. The correspondence revolved around creating a new client account within the private bank and subsequently transferring New Ireland’s payment there. This account, as was revealed in court, was registered with Spice Holdings.
When Gray asked Sean Casey, his superior, about the payment transfer to this new account, Casey replied by asking about Spice Holdings. After researching Spice Holdings, the compliance head of New Ireland reported back to Gray and Casey, stating his inability to find any significant data about the company via the Companies Registration Office.
The court was informed that Casey directed, under no condition should payments be made to client accounts. Gray revealed that the payment was finally processed in December 2011 to the private bank’s standard account.
The court received the testimony from Des Hanrahan, a director of the Specialist Property Group in the Bank of Ireland. The entity was recognised as one set up post the financial crash to settle significant debts connected to properties valued above €10 million. Hanrahan highlighted a particularly contentious case, referred to as “Case X”. An account in the private bank was established to cater to the legal expenses related to this case.
The court was informed that any transactions on the Specialist Property Group’s account required approval from two out of the three directors. Mr. Hanrahan disclosed to the court that he was alerted of an invoice amounting to €18,792.65, from McCann Fitzgerald in late March 2013. This invoice, sanctioned by Mr. Mullin and a bank employee, was debited from the “Case X” legal cost account. Mr. Hanrahan emphasised that these individuals held no rights over the account, and that the invoice stated it was for advice given to Quantum Investment Strategies, a firm unrelated to “Case X”.
Mr. Hanrahan detailed a telephone conversation on March 20th, 2013, with Mr. Mullin, who informed him of an error concerning the invoice and apologised. Mr. Hanrahan expressed his disappointment with the call. After further discussion with a coworker, he discovered that Mr. Mullin served as a director of Quantum.
On March 25th, of the same year, Mr. Hanrahan reported receiving two more calls from Mr. Mullin. In the first, Mr. Mullin assured him of a refund on the invoice and inquired if they could consider the matter resolved to which Mr. Hanrahan agreed. Roughly thirty minutes later, Mr. Mullin contacted him again to confirm the correction of the transaction, then asked if it had caused any concerns at Mr. Hanrahan’s end. He chose not to comment and concluded the call.
The court also heard from Mick Sweeney, the former CEO of the Wealth Management Division, who found out about an issue with the McCann Fitzgerald invoice amounting to €18,792.65 in March 2013, and subsequently met Mr. Mullin on March 25th.
In a courtroom proceeding, it was learned that invoices belonging to McCann Fitzgerald had been erroneously paid due to their accidental inclusion in a group of client invoices. Mr Mullin had reportedly found this mistake and informed Mr Sweeney about his belief about the incorrect naming of “Quantum Investment Strategies” on their invoice’s explanation. Instead, he suggested it should have been labelled as “QIF”, an acronym for ‘quality investment fund’. He also stated that the invoice was in connection with the advice they had received within this sector from the private bank.
Later, Mr Mullin contacted Mr Hanrahan to bring the error to his attention. Furthermore, in a subsequent conversation, Mr Mullin disclosed to Mr Sweeney that the invoice was tied to his private dealings with McCann Fitzgerald about Quantum.
Following these revelations, Liam McLoughlin, Mr Sweeney’s bank senior, ordered a review. Afterward, during their meet on April 2nd, Mr Mullin shared with Mr Sweeney about more errors in the bank’s payments towards other invoices; mentioning he’d personally settled these bills already.
On April 5th, the courtroom discovered from Mr Sweeney that Mr Mullin had been granted a unique paid leave. Mr Mullin later chose to step down from his role in July of that year.
The trial presided over by Judge Martin Nolan and a jury is yet to conclude.