The senior executive agrees that Brendan Mullin had no choice but to resign following an internal investigation

Brendan Mullin, 60, of Stillorgan Rd, Donnybrook, Dublin 4, denies all 15 charges, allegedly made between July 2011 and March 2013.

In his opening statement at Dublin Criminal Court this week, prosecutor Dominic McGinn told jurors it was a case of “financial dishonesty” involving theft, deception and false accounting.

The indictment accuses Mr. Mullin of authorizing payments from the bank to lawyers McCann Fitzgerald, accounting firm Grant Thornton and accountants Beechwood Partners for work performed either for Mr. Mullin’s company, Quantum Investment Strategies, or for him personally.

Mr. Mullin is also accused of false accounting in connection with invoices from McCann Fitzgerald and Beechwood Partners, which prosecutors say he no longer addressed to his home address but to the bank.

Prosecutors also accuse Mr Mullin of stealing €500,000 from Bank of Ireland when communications between various companies in the banking group were disrupted in relation to a payout to some life insurance customers.

The jury was told that due to a miscommunication, duplicate payments of €500,000 were made to the Bank of Ireland Private Bank and that, against this background, Mr Mullin authorized a payment of €500,000 which was ultimately made to a company called Spice Holdings based in British Virgin Islands.

The court heard that Quantum repaid an amount of €500,000 to Bank of Ireland Private Bank in July 2015.

“Office error”

When questioned by gardaí, Mr Mullin said the payment of the invoices was due to “clerical errors” and that Spice Holdings had nothing to do with him in relation to the €500,000.

The jury was told they would hear Mr Mullin’s explanation of why the €500,000 repayment came about during the trial.

On Wednesday, Mr McLoughlin gave indications that his remit included oversight of the Bank of Ireland Private Bank, although Mr Mullin did not report directly to him.

He said he was made aware of an issue with Mr Mullin in March 2013 and initiated an internal review.

Mr McLoughlin told Mr McGinn that he later asked internal audit to complete an investigation and separately approved Mr Mullin’s suspension in March 2013.

He said the role of managing director of a private bank was a “pre-approved control role” by the regulator and given “serious and serious” concerns it was “not appropriate for Mr Mullin to remain on site”.

Under cross-examination, Mr McLoughlin agreed that he had met Mr Mullin in early April 2013 and although he told him it was a serious matter, he could not recall discussing any details of it.

He accepted the defense’s suggestion that Mr Mullin did not want to be suspended.

Mr Grehan noted that the group’s internal audit department had launched an investigation and that Mr Mullin resigned in July 2013.

Mr McLoughlin agreed with Mr Grehan’s claim that his client had “really no choice” but to resign.

Previously, Deirdre Flannery, former head of internal audit at Bank of Ireland, continued to testify.

She has told the court that she was involved in the internal investigation into Mr Mullin in 2013 and she has told the prosecutor that there was no agreement with the bank to pay Mr Mullin’s personal expenses.

She said while four invoices were paid to McCann Fitzgerald’s lawyers, “more were issued.”

The court heard that as a result of their investigation this money, amounting to €61,535, was returned from McCann Fitzgerald.

Ms Flannery explained that in August 2010 Bank of Ireland Private Bank learned that some customers with certain New Ireland insurance were entitled to a benefit but had not received it.

Following an internal review, 12 policies were identified and Bank of Ireland Private Bank decided to make voluntary payments totaling around €1.6 million to affected customers.

A subsidiary of the Bank of Ireland group initially agreed to take on €1m of the €1.6m.

It paid €500,000 but later decided not to pay the remaining €500,000.

It was subsequently agreed that New Ireland would pay €500,000 to Bank of Ireland Private Bank.

Mr McGinn walked Ms Flannery through a series of internal documents and emails.

This included an email from a Bank of Ireland Private Bank employee in July 2011 which stated that the €500,000 was a refund for a New Ireland customer which Mr Mullin had agreed to facilitate.

Another internal email from the same period said the money was to be transferred to a Northern Trust account for Spice Holdings.

Internal documents

The jury also saw internal screenshots and other documents indicating that a customer asset account was set up in the name of Spice Holdings at Bank of Ireland Private Bank in September 2011.

Ms Flannery agreed with Mr McGinn that it appeared the intention was to transfer the €500,000 from New Ireland into this Spice Holdings account.

The jury was then shown internal emails from New Ireland about this payment, in which some raised concerns.

The €500,000 was finally transferred from New Ireland to the Bank of Ireland Private Bank account on December 16, 2011.

A completed payment order form of the same date, signed by Mr Mullin and another person, authorized the payment of €500,000 into a Northern Trust account.

Ms Flannery told Mr McGinn that Spice Holdings was not a customer of New Ireland Assurance, did not hold the policy in question and therefore no payout was due.

She agreed with Mr McGinn that the payment made by New Ireland Assurance to Bank of Ireland Private Bank had, as far as she could determine, “nothing to do with Spice Holdings”.

Ms Flannery said the bank had demanded the money be returned and in July 2015 lawyers acting for Mr Mullin transferred €500,000 to the bank’s lawyers.

Under cross-examination she told Mr Grehan that she had not been involved in the bank’s efforts to recover the €500,000.

Mr Grehan told Ms Flannery that it was “strange” that she made a statement to gardaí five weeks after the bank recovered the €500,000.

“Are you saying that there is no connection other than pure coincidence that your billing occurs five weeks after the bank collects the money?”

Ms Flannery said she was not aware of any connection and the bank initially contacted authorities with its concerns in 2013 and later contacted her when asked for comment in September 2015.

She insisted it was her job to conduct an investigation and could not comment on Mr Grehan’s statement that there was “no way back” for his client following his suspension in April 2013.

Mr Mullin has pleaded not guilty to one count of stealing €500,000 from Bank of Ireland Private Bank, Mespil Rd, Dublin 4, on December 16, 2011, and eight further counts of stealing various sums of money worth just over €73,000 the bank on different dates.

He also pleaded not guilty to one count of deception and five counts of false accounting.

Mr Mullin was managing director of Bank of Ireland Private Bank at the time of the alleged offenses and a former rugby international who played for Ireland.

The trial continues before Judge Martin Nolan.