Army not acting against pilot

By Diarmaid Fleming
BBC News, Dublin

The Irish Army says it has not taken any action against one of its pilots who owes more than two million euro to a bank.

Captain John Mulkearns and his wife, Lorna Farrell, were ordered by the Commercial Court in Dublin to pay back 2,047,208 euros to the Bank of Ireland.

The couple were ordered to pay back the loan

The bank said they had broken a mortgage agreement by failing to register the loan on properties they owned.

The couple's solicitor was Michael Lynn, 39, who is wanted in Ireland.

He fled the country after it emerged he owed over 80m euros in loans from financial institutions raised against properties which are the subject of investigations by Garda fraud detectives.

The Commercial Court heard that Capt Mulkearns and his wife were given a loan of 2M euros in March 2006 by Bank of Ireland.

The bank said the loan was to clear existing mortgages for five properties in Ireland - three in Dublin and two in County Leitrim.

The loan was also to repay a debt of 200,000 euros owed to Mr Lynn, and to invest 493,000 euros in five apartments in Bulgaria being built by Kendar Holdings, Mr Lynn's property company.

Lawyers for Bank of Ireland said that the 2m euros mortgage given to the couple was conditional on the loan being registered over the five properties, and their home in Dublin.

The bank said the loan was never registered or secured against the properties. Lawyers said the couple were in breach of the agreement, and had not honoured the repayment instalments.

No defence was lodged by the couple, who were legally represented. The court then granted an order to Bank of Ireland for 2,047,208 euros, including interest against the pair.

Lynn is under investigation by the Garda Fraud Squad, the Law Society of Ireland, and is being sued in a multitude of court cases being taken by financial institutions looking for their money back.

The High Court has been told that Lynn raised several mortgages against single properties, failing to register the loans in breach of undertakings given to the lending banks and building societies.

Bulgaria

Legal action has been taken by the banks and building societies to get their money, while a separate High Court hearing is also underway as part of an investigation into Lynn's activities by the Law Society of Ireland.

Lynn has not been seen since failing to turn up for a High Court hearing related to this investigation in December. He is understood to be living in Portugal, but has travelled to the US and Bulgaria in recent weeks.

He has not been charged with any criminal offence, so cannot be extradited to Ireland, even though a bench warrant exists for contempt of court due to his non-appearance at hearings.

The Mayo-born solicitor racked up debts of over 80m euro but also amassed a substantial portfolio of 148 properties in Ireland, Bulgaria, Hungary, Poland and Portugal thought to be worth around 50m euro, as well as a number of development projects.

The banks are seeking sale of his portfolio to recoup their money, but multiple mortgages on single properties mean there will not be enough raised from such sales to meet all the debts.

Flying

A High Court judge described his tangled financial affairs including 154 bank accounts as like a "witches' brew".

Captain Mulkearns developed an interest in Bulgaria some years ago and was known in the expatriate business community in Sofia, from his attendance at a formal dress St Patrick's Day function at the Boyana Palace in Sofia in March 2004, attended by international diplomats, Bulgarian and expatriate business figures.

The military pilot is attached to the helicopter arm of the Irish Army Air Corps, whose duties include flying Irish President Mary McAleese, Taoiseach Bertie Ahern and other Irish government ministers and VIPs.

An Irish Army spokesman said that Captain Mulkearns was not currently in a flying role at the Air Corps. It is understood that his ground role was a normal operational assignment unrelated to his financial affairs.

He is understood be the secretary of the officers' mess at the Air Corps Headquarters in Casement Aerodrome, Baldonnel near to Dublin, and is also attached to the helicopter section.

An Irish Army spokesman said that there had been no military investigation arising from Captain Mulkearns' financial affairs. These were first made public at an earlier court hearing in December.

"There is no investigation. He is not working in a flying appointment currently. The Defence Forces are currently monitoring the situation," the spokesman said.

Captain Mulkearns was not available for comment.