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BFCSA: ASIC blames Brokers and covers up Lender's Part for accepting and approving fraudulent Loan Apps

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Just be aware 36% of Fraudulent Low Doc mortgages are written up by bank broker involved.  ASIC declares open season on dodgy brokers but not on dodgy Lender approvals and acceptance of fraudulent documents.  Let the Cover Up Games Begin!

·         Australian Broker News

by | 11 Dec 2013

ASIC has permanently banned two Sydney-based brokers and one former mortgage broker while announcing the conviction of another.

Two Sydney-based mortgage brokers have been banned by ASIC after it was found that they had provided false information to credit providers in support of loan applications worth over $3 million.

ASIC has also permanently banned  former mortgage broker Daniel Minh Tuan Nguyen from engaging in any credit activities and providing financial services following his criminal conviction for a range of offences, and convicted another, Hee Seng Lee, of providing false information to banks to secure approvals for home loans totalling almost $7.5 million.

Wen Yao Hsieh (also known as Leon Hsieh and Adrian Hsieh) of Castle Hill and Chia Min Shen of North Parramatta submitted 7 loan applications on behalf of 6 borrowers that contained false information to AMP, Westpac and Bendigo and Adelaide Bank.

An ASIC investigation found from about May to October, 2010 Hsieh gathered tax, employment and income documents in support of the loans before referring the applications on to Ms Shen. She then submitted the applications.

Both Hsieh and Shen had been responsible for arranging the false creation of Notices of Assessment used to support the applications. 

ASIC deemed Hsieh and Shen were not fit and proper persons to engage in credit activities because they knew that the applications contained information which was false as to the income and employment of the borrowers.

ASIC Deputy Chairman Peter Kell said, "By falsifying loan applications Hsieh and Shen put consumers at risk.

"ASIC is actively targeting mortgage brokers and finance brokers who falsify loan documents. Any broker engaged in this sort of misconduct will be removed from of the industry."

In a further move by ASIC today, former broker Daniel Minh Tuan Nguyen, of Panania, has been permanently banned.

Nguyen was convicted of 10 offences including providing false information and documents to banks to secure approvals for home loans totalling more than $3 million over a five-month period. He pled guilty to the charges.

The loans Nguyen was involved in attempting to secure ranged from $112,000 to $536,900.00, with the average being approximately $350,000. Only one loan of $532,000 was approved.

The conviction of Nguyen was the first under new national consumer credit protection legislation.

At the time of the offences Mr Nguyen was the sole director and sole employee of M.A.I Pacific Pty Ltd (trading as MAI Home Loans) in Bankstown.

"Mr Nguyen’s conduct was not inadvertent or the result of a momentary lapse. It was a deliberate, ongoing course of conduct that he knew to be in breach of the law," said Kell.

"The banning of Mr Nguyen continues ASIC's actions to protect the public from the harm associated with falsifying loan documents and loan applications."

Mr Nguyen has the right to lodge an application with the Administrative Appeals Tribunal for a review of ASIC’s decision.

Meanwhile, former broker Hee Seng Lee has been convicted of providing false information to banks to secure approvals for home loans totalling almost $7.5 million.

Seng Lee, 58, of Dural, pleaded guilty to six charges including making false statements and providing false documents.

The loans Mr Lee was involved in attempting to secure ranged from $160,000 to $1.5 million.

Appearing in the Sydney District Court on 6 December 2013, Mr Lee was sentenced to two years imprisonment to be served by way of an Intensive Correction Order.

Kell said, ‘Attempts to falsify loan documents and loan applications will not be tolerated by ASIC. These actions can be significantly detrimental to clients.

"We will continue to shine the spotlight on broker misconduct around loan fraud and false loan applications."

The Commonwealth Director of Public Prosecutions prosecuted the matter.


·         L3nder on 11/12/2013 1:27:44 PM

There is never any excuse for falsifying documents. People doing it in the industry should be prosecuted. That being said, lets get brokers out of the market and consumers can provide lenders with misleading information directly. Since lenders seem immune to the NCCP, that should free ASIC staff up considerably.

·         Rocket Scientist on 11/12/2013 1:09:10 PM

Hang on - doesn't ASIC make running shoes?

·         mac on 11/12/2013 12:34:41 PM

Poor ASIC The banks really have them and us by the short and curlys don't they. ....We are effectively the only ones being regulated. I would like to know how many bank employed staff (credit reps) have been disqualified since the NCCP was brought in? Any ASIC? If none why none? Do they believe there have been no bad applies in the proprietary channel at all?

The problem is ASIC has no intelligence gathering ability apart from what they are told by the lenders! The same organisations ASIC are meant to also be regulating. Has any bank referred any of their own staff to the regulator for similar cases of fraud?? Let alone run of the mil breaches of the NCCP?? NO and NO.

If ASIC is serious about their role being a protector of the consumer and enforcer of the NCCP Act how can they not have disqualified a single bank staff member.

·         GC on 11/12/2013 12:09:05 PM

Why is ASIC taking credit for the "capture" of this slime. The successful investigations would have been instigated by the lenders - not ASIC. If the banks weren’t being vigilant and the fraud dept. wasn’t doing their job then ASIC would still be sleeping. The banks have in the past been very successful in discovering fraudulent activity. Why is ASIC taking credit for this?

·         Aarong on 11/12/2013 12:08:34 PM

We all hate actual criminals in the industry. The thing is that fraud was always illegal, even before Asic took over the industry. It seems to me that many people don't realise this. I'm loathe to say I'm happy that Asic is doing this as this really should only be done by the federal police and Asic never should have been involved in the industry at all. the Mortgage Choice ruling is a pretty good example of an inadvertent mistake or just a slight stretching the marketing bounds a little (ever see what a car commercial or a household cleaning commercial promises?). The suspended broker for 6 months was a bonafide inadvertent mistake. I know the difference is that there isn't any prison time here, but they were both still punished. My problem is that when criminals are punished for actual fraud, like in this case, people might conflate the issue of punishing criminal behaviour with regulating and industry and it strengthens the argument that the NCCP is somehow a good, when it actually is a terrible. Yes, they might put actual criminals in prison today, but tomorrow they might actually do the same to you for putting a comma in the wrong spot in a preliminary assessment. I don't think anyone should rally around this one example for a justification of the entire Asic takeover of our industry.

·         not so old broker on 11/12/2013 12:06:14 PM

Gee Harry, hope those little fish didn't catch any of your clients or relatives. I'd rather ASIC catch little fish than no fish at all.
What is a 'Big Fish' fraudulent broker actually? To whom are you referring?

·         Country Broker on 11/12/2013 11:48:15 AM

The head line is misleading , open season is there only on brokers who are committing fraud !!!! As a broker I have no concerns about ASIC doing this , get rid of these comedians out of our industry !!! One thing we never hear about the actual applicants surely they needed to sign the applications , where are they in all this , have they been looked at and charged if they were party to these transactions?

·         Consumer Observer on 11/12/2013 11:43:48 AM

The headline misrepresents ASIC's actions and implies those who were prosecuted were unfortunate targets of unwarranted regulator enforcement. The broking industry should be pleased ASIC is doing its job - taking action against those who break the law and bring the industry into disrepute.

·         Observer on 11/12/2013 11:41:52 AM

What an irresponsible and sensationalist headline. Obviously designed solely to draw the email recipient to the website. Where has ASIC said that it is declaring open season on brokers?" The headline implies that the brokers concerned were somehow not due the penalties they are to suffer. ASIC is often accused of being asleep at the wheel but what reasonable person could excuse the behaviours of these people?

·         Harry Myers on 11/12/2013 11:41:25 AM

We can all sleep well at night knowing ASick is on the job. One day they might even catch a big fish.



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  • doyla66
    doyla66 Friday, 13 December 2013

    Reality check for Kell and ASIC - frankly, we don't believe you

    ASIC Deputy Chairman Peter Kell said, "By falsifying loan applications Hsieh and Shen put consumers at risk.
    What about ASICs track record for this? 14 years of regular neglect of consumers under caveat emptor and suddenly Peter Kell is the great white hope for consumers? I doubt anyone is going to believe that!
    Peter Kell is going to have to try much harder and do a much more convincing job on consumer protection before any consumer is going to believe he's doing anything more than paying lip service to consumer risks!
    We all know his and ASICs priority is protecting the markets - consumers come a long way down on the ASIC checklist of priorities, based on track record.
    Some suggestions for Peter Kell in the interests of improving ASIC: investigate the blatant fraud, forgery and extortionists rackets of the Banks and lenders you've tried so hard to protect. If you want Australians to believe you and ASIC should continue to be fed from the public purse you're going to have to do a much more conscientious job on this area and less in the ASIC media PR department.

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