AUSTRAC widens information-gathering in home loan fraud scandal
Ten of Australia’s biggest banks have started providing mortgage loan information to the Australian Transaction Reports and Analysis Centre (AUSTRAC), as authorities examine the scale of suspected mortgage fraud.
According to an AFR article, people familiar with the discussions said bank representatives met AUSTRAC last week after 10 lenders received formal notices last week seeking loan data.
Those covered by the request were said to include the Big Four banks Commonwealth Bank (CBA), Westpac, ANZ and National Australia Bank (NAB), along with Macquarie, HSBC, ANZ-owned Suncorp, Bank of Queensland, and Bendigo and Adelaide Bank.
AUSTRAC’s request does not, of itself, indicate wrongdoing by all recipients, but suggests the agency is seeking a broad set of information across the sector to gauge the scale of suspected home loan fraud, which some estimates suggest could be at least twice as large as previously indicated. Banks, meanwhile, are conducting broader reviews of their mortgage books to identify potential irregularities.
The data collection follows earlier reporting that Commonwealth Bank had alerted authorities it was reviewing about $1 billion in home loans it suspected may have been obtained fraudulently. The matters under review include suspected manipulation of application documents, the use of shell companies, and potential issues involving referrers and brokers. Authorities have signalled concern that criminal groups may be using the mortgage and property markets to launder money.
The scrutiny also sits alongside allegations involving a group referred to as the Penthouse Syndicate, described in prior reporting as a network of lenders, brokers, real estate agents and other professionals accused of bypassing NAB’s credit settings. The group has been alleged to have defrauded NAB of about $150 million and, according to police suspicion cited in earlier reports, to have targeted all four major banks for at least $300 million.
The alleged ringleader, Andrew W. Hu, has been identified as a former NAB and CBA banker who was dismissed by Commonwealth Bank in 2022 after irregularities were found in loan applications linked to him. At that time, reporting said the associated applications left the bank about $15 million out of pocket.
People with knowledge of Commonwealth Bank’s more recent review said the bank became particularly concerned after detecting anomalies in loans written by two mortgage brokers, which then led to scrutiny of accountants alleged to have used false income statements to inflate clients’ financial positions.
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