Former solicitor Michael Lynn has told his multi-million euro theft trial that while in jail awaiting extradition from Brazil he saw a prisoner beheaded by other inmates.

Mr Lynn continued giving evidence at Dublin Circuit Criminal Court on Thursday, with the former solicitor also describing trying to build the non-Irish side of his property and development business. He described entertaining bankers, giving as example his relationship with Maurice Aherne, who worked in lending with AIB. He said that he paid for flights and hotels for Mr Aherne, and a daughter of Mr Aherne, to visit Portugal and Hungary.

“Bankers expected benefits in kind,” he told the court. “The way business was done . . . They [the bankers] saw you were making money and they wanted some in turn.”

He was asked if bank officials bought apartments from him and Judge Nolan intervened.

“You are saying individual bankers received money from you or your companies, directly from you and not through their bank?” he asked.

“Absolutely judge,” replied Mr Lynn, adding that, in 2022, that might seem odd.

“But during the Celtic Tiger,” said Mr Lynn, “I was in my 30s and you were vying for position with the banks. When I look back, you wonder who was riding on the coat tails of who.”

Mr Lynn described what life was like in a Brazilian prison after his arrest in August 2013 in Recife, a coastal city in northeast Brazil.

The jail where he was held was beside a dump – “a very big dump with rats so big even the cats ran away from them”, he told defence barrister Paul Comiskey-O’Keeffe, BL.

Mr Lynn said that prisons in Brazil were essentially run by the inmates.

“When I went in, the first three nights I was in a tiny cell shared with 30 other guys,” he said. “That was kind of a holdover prison. You are not given any bowls to eat [from] or utensils to eat [with].”

In the jail where he was detained, he said he was moved to a part of the complex where they held people who had a degree, such as “lawyers and accountants”.

Certain prisoners run the prison, he said, and were given a gun and what he described as “large swords”.

"It's like something from Game of Thrones," he told Judge Martin Nolan, adding that violence was commonplace.

“There were breakdowns, there were rebellions,” he said. “I saw people being killed. I saw once a decapitation of a young man whose only sin was that he was gay. I don’t mean [being gay] was a sin but that’s how it was seen over there. It’s extremely macho and all that malarkey over there.”

Mr Lynn of Millbrook Court, Red Cross, Co Wicklow, is on trial accused of the theft of about €27 million from seven financial institutions.

He has pleaded not guilty to 21 counts of theft in Dublin between October 23rd, 2006 and April 20th, 2007.

It is the prosecution case that Mr Lynn obtained multiple mortgages on the same properties in a situation where banks were unaware that other institutions were also providing finance.

Failed to appear

On his fourth day being questioned by defence counsel, Mr Lynn said he first went to London after he failed to appear at the High Court in Dublin in 2007.

Before that, he said he had meetings with bankers and with Grant Thornton to analyse his assets in Ireland and elsewhere "to see if we could find a commercial solution" to his financial problems.

He said he was advised that if he went bankrupt in the State, he was facing bankruptcy for 12 years.

He said he talked to solicitors and to Michael Fingleton, then chief executive of the Irish Nationwide Building Society, and to Seán FitzPatrick of Anglo Irish Bank.

“They were very concerned, and I was also very concerned in terms of myself having a future,” said Mr Lynn.

He said he had a house rented in London and he could go bankrupt in the UK for a shorter period than in Ireland, so he went there.

He said he hoped that it would “allow things to settle and resolve themselves”.

The court heard that in February 2008, Mr Lynn moved to Portugal and continued living there with his wife Brid Murphy until June 2011. He told the court he had first gone to Brazil in 2005 because there was a "natural business connection between Brazil and Portugal".

He said his accountant friend in Portugal introduced him to a good friend in Sao Paulo, where he lived with his wife for eight months.

Hitherto, the couple had been unable to have children despite IVF treatment, the court heard. But in Sao Paulo he said they were more fortunate and had a boy.

Mr Lynn said they did not like the size of the city, however, and so moved to Recife, a smaller coastal city where, with investors, he became involved in property in nearby Cabo de Santo Agostinho.

Salary

He said he got a salary from this and also earned money from teaching English.

When he was arrested, his wife was seven months pregnant, he told the court. He resisted extradition initially, he said.

“I needed to give time for Brid to give birth,” he told Mr Comiskey-O’Keeffe.

He said he hoped to get bail and spent time with his children but bail was denied. However, he said conjugal prison visits were allowed and they had two more children in Brazil.

“Brazilian prisons are very difficult for everybody,” he said. “Conjugal visits exist to maintain peace in what is essentially a war zone.”

The trial continues.