The Serious Fraud Office (SFO) is investigating a large-scale mortgage fraud in Auckland.
In its 2015 Annual Report it explains, “We have invested significant resources into investigating a large-scale mortgage fraud involving highly organised teams of property developers, shell company directors, property valuers and lawyers.”
It recognises Auckland’s heated property market, as well as the scale of upcoming commercial developments, create a risky environment.
Yet the SFO says that genereally speaking, its complaints team hasn't noticed a spike in mortgage fraud in recent times.
While it can’t provide details on the ongoing investigation, its director Julie Read commented on the issue of mortgage fraud, following the former director of Focus Property Investments last month being found guilty of committing fraud to the value of about $3.6 million.
She warned: “Vulnerable investors are often targeted by those who are aware of their inexperience in dealing with significant financial transactions. It is important wherever possible to obtain advice from reputable advisers and institutions.
“The SFO hopes that this verdict demonstrates that nonetheless serious financial crime in the lending environment will be discovered and prosecuted."
In this particular case, an Auckland District Court found Vicki Ravana Letele guilty of 10 charges of dishonestly using a document.
The SFO prosecution established that Letele conspired with an associate, Ramni Kumar, to obtain mortgage finance for low income families who would not otherwise have been able to obtain finance, by using false documentation.
This mortgage finance was used to purchases properties from interests related to Letele and Kumar, generating a profit for them.
Kumar entered a guilty plea in January and was sentenced to 12 months home detention and 250 hours of community work.
Letele has been remanded on bail and will be sentenced on November 3.
10 Comments
'welcome to John Key's South Pacific money laundering paradise' should be hoisted at Auckland International Airport' - Interest .co.nz said it all last week.
Dear Leader has infused us all with his shyster ways. Beirut, Cyprus, Macau - add AKL to the tin pot operations where the wide boys roam.
I believe that there is quite a bit of subtle corruption at work in the property market. But there is also a lot of taxpayer subsidisation too. Perhaps a member of the media could make an OIA request to WINZ as to the level of accommodation supplements paid out across the country. Break it down by centre and then we'll be able to see just how much the taxpayer is subsidising property investor returns. Caution - the Government may not want this information in the public arena, but rents are so high in most places now that benefits and many of the low end wages will not support them, so WINZ must be topping up wholesale.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.