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BFCSA investigates fraud involving lenders, spruikers and financial planners worldwide.  Full Doc, Low Doc, No Doc loans, Lines of Credit and Buffer loans appear to be normal profit making financial products, however, these loans are set to implode within seven years.  For the past two decades, Ms Brailey, President of BFCSA (Inc), has been a tireless campaigner, championing the cause of older and low income people around the Globe who have fallen victim to banking and finance scams.  She has found that people of all ages are being targeted by Bankers offering faulty lending products. BFCSA warn that anyone who has signed up for one of these financial products, is in grave danger of losing their home.

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BFCSA: ASIC takes on a Fake document Scammer, but Bank APPROVED THE DUD LOANS!!!!!!!!!

Posted by on in ROYAL COMMISSION URGENT
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The LIARS ARE THE BANKS WHO INSTRUCT BROKERS AGENTS TO TWEAK THE APPLICATIONS AFTER THE LOAN APPS HAVE BEEN SIGNED and without the knowledge or authority of the borrower.  ASIC is using SPIN to mislead the public.  Just remember, this fellow is charged with $180 million fraud.  Banks have run a $1.3 TRILLION masterminded Ponzi Financing Scam run by a 16 Banksters.

Banks are responsible for teaching the agents these tricks and for the SELLING and APPROVALS of every toxic the loan.  So why are the Banks let off the hook for the vital NON-VERIFICATION of every loan (average: half million dollar mortgage to low income families). 

Why are the banksters permitted to continuing feeding FAKE Stats to APRA?  80% of loans are INTEREST ONLY?  These are doomed to fail loans.

 

So the Government simply gives the agent a rap on the knuckles and then the banksters continue selling more toxic loans and train more agents to do the similar things. Then provides NO remedy for the aggrieved Consumers and customers of the BANKS.  These toxic loans were fed through to the Banks involved via AUSSIE HOME LOANS.   Good one chaps!!!  Everyone made money.  Consumers LOST big time.  Roll on the Royal Commission into Banks, Advisers and Regulators.

 

How Australia's biggest home loan scammer Najam Shah duped the banks

Australian Financial Review Oct 13 2017 9:00 PM

Misa Han

Branch managers and mortgage brokers working for some of the major banks including the Commonwealth Bank and Westpac knowingly facilitated Australia's largest home loan scam concocted by bankrupt Pakistani immigrant and mortgage broker Najam Shah.

Justice Frank Gucciardo of Victoria County Court this week sent the 58-year-old to jail for five years, with a minimum of three years and three months, after he pleaded guilty to conspiring to defraudfinancial institutions to the tune of $170 million.

Shah, who ran Melbourne-based mortgage broking business Myra Financial Services, admitted his sophisticated scheme involved preparing over 600 fake home loan applications on behalf of clients, many of whom came from Indian and African backgrounds and under normal circumstances would find it difficult to qualify for a home loan because they didn't have savings, earnings or even employment.

The court decision revealed "G", a CBA mobile lender, attended Myra premises "almost on a daily basis" and using Shah's mobile phone and computer raised with Shah and his staff "inconsistencies and errors in the false documents for correction".

"It appears that person knew the documents were false," Justice Gucciardo said.

According to the court decision, Myra had a formal referral agreement with CBA and the bank approved 121 fraudulent home loans prepared by Myra under this agreement in just one year between April 2008 and March 2009 – about $36 million worth of home loans.

Cultivate relationships

The evidence shows CBA was one of the major targets of the scam, with Myra submitting $54 million worth of fraudulent home loan applications to the bank until the bank got suspicious and refused to process further applications prepared by Myra in 2009.

CBA was not alone. Myra also submitted $68 million worth of fraudulent home loan applications to Westpac, $36 million to Bank of Queensland, over $12 million to NAB and over $12 million to Bankwest, a CBA subsidiary.

When CBA stopped dealing with Shah, he set out to "cultivate relationships with brokers and bank managers" who would facilitate the loans based on the applications supplied by Myra "knowing they were false" and instructed his staff which such managers and brokers to deal with, the judgment says.

He said the financial institutions involved "certain branches of St George, Bank of Queensland, Westpac and Bankwest, among others".

"Here, the brokers and bank managers would facilitate the applications knowing they were false," Justice Gucciardo said.

He said Shah's contacts and relationships with the lending institutions and individuals were "crucial to the ongoing success of the enterprise".

'Liar loans'

CBA spokesman said it terminated its relationship with Myra in 2009 and customers who applied for home loans through Myra were "identified and supported on a case-by-case basis".

"We have zero tolerance for fraud or illegal activity. We are reviewing the matter with the additional information made available as a result of these proceedings and will determine if further action is appropriate," he said.

A spokeswoman for Westpac and its subsidiary St George said: "We have no tolerance for fraud, and have systems in place to identify and thoroughly investigate any potential dishonest behaviour. If fraudulent activity is discovered, we take action against those involved (including brokers), which includes liaising with the appropriate regulator and the police as required."

Actions were taken against the parties involved and customer remediation program is also under way.

Bank of Queensland spokeswoman said: "We are currently reviewing the findings of the court. Neither Myra, nor Mr Shah were accredited brokers with BoQ. BOQ has strict guidelines and processes in place for the accreditation of all its brokers."

A Bankwest spokesman said the bank takes the issue of fraud very seriously and it terminated its relationship with Myra in 2009. He said: "[A]s a responsible lender Bankwest continually reviews and refines its systems and processes to better protect and support customers. Bankwest store managers are not involved in processing loan applications that are presented by third parties, including those submitted by mortgage brokers."

This means as much as $500 billion home loans in Australia could be so-called "liar loans", which are regarded as a leading cause of the 2008 global financial crisis.

The UBS report found "customers who misstated their mortgage application have not seen an increase in the amount of documentation or verification required and were no different to customers who were accurate in their application".

The case also comes as the corporate regulator Australian Securities and Investment Commission warns the standard model of upfront and trail commissions for brokers creates conflict of interest because brokers could recommend a loan that is larger than the consumer needs or can afford.

The spotlight so far has been on the calculation of expenses, with ASIC recently taking Westpac to the Federal Court alleging it breached responsible mortgage lending lawsby using a benchmark instead of actual expenses in assessing home loan applications and the parliamentary committee this week grilling Westpac and ANZ over the use of benchmarks.

However, the biggest home loan scam in Australia, and similar frauds before this, focused on fabricating clients' income. Shah's operation was bigger in scale than most – he admitted to submitting 600 fake home loan applications and it is estimated Myra received over $2.16 million in commission, loan facilitation fees and referral fees between 2008 and 2011 – but the method of the fraud remained largely the same.

Company in wife's name

With another person, Shah set up Myra with his wife as the sole director and shareholder because he was a declared bankrupt at the time he founded the company.

The business of Myra, as Justice Gucciardo found, was "the preparation of fraudulent applications for clients who were seeking finance for housing".

Shah set up a sophisticated scam where he would do the initial interview of clients and take down relevant details, such as their real income and employment status.

Shah would then direct his employees, including a graphic designer, to create false documents according to his instruction sheet such as fake bank statements, payslips, driver's licences and citizenship certificates. The documents also included false verification and certification stamps and even false bank stamps to indicate proper certification.

Over 400 different employer names were used to make fake payslips, which included the names of well-known companies – such as Oracle, Visy Recycling and Crowne Plaza – and smaller enterprises.

In one fraudulent home loan application to NAB, Myra created not only a false Australian citizenship certificate, a false payslip and false bank statements, but also a false statutory declaration made on behalf of the client who had not signed it, who was unemployed and had no money saved in the bank account.

Phone system

Shah also set up a phone system where he registered phone numbers for businesses to be used as false employers and gave his staff members a script to confirm the employment details of the applicants.

When Australian Federal Police and ASIC raided Myra's office in Footscray and Shah's home in 2011, they found 750 Photoshop image files for driver's licence and citizenship documents, more than 1200 Excel files containing payslip and bank statement templates, and more than 640 Word files containing similar documents.

The corporate regulator, Australian Securities and Investments Commission, has investigated more than 100 loan fraud matters since it became the national regulator of consumer credit in 2010 and so far 13 people have been convicted for providing false documents in loan applications.

But even as the authorities are cracking down on other types of white-collar crimes with lengthy jail sentences – NAB insider trader Lukas Kamay is serving a 4½-year sentence and property developer Song "Peter" Chang is in jail serving a three-year jail sentence for committing a $10 million tax fraud – the penalties for home loan fraudsters have remained lenient over the years.

Last year, former Aussie Home Loans mortgage broker Madhvan Nair was convicted of submitting 18 fraudulent home loan applications to Westpac, ANZ and NAB but got away with only a three-year good-behaviour bond. Another Aussie Home Loan broker, Shiv Sahay, who was convicted of making false loan applications and false bank statements for 17 clients, also avoided jail and instead was ordered to do 350 hours of community service.

Shah is the second person to go to jail for home loan fraud, after Westpac home finance manager David St Pierre went to jail in February for six months for submitting $2.5 million worth of false home loan applications.

ASIC's investigation into this matter is continuing, meaning other individuals involved in the scam could face bans and charges.

 

 

 

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