Fraud

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Former property developer Craig Kirrin Gore has been arrested and charged with fraud in a Brisbane court following an ASIC investigation.
He appeared in the Brisbane Magistrates' Court after being arrested on April 14 and  was charged with 15 offences, said a release on ASIC’s website.
Gore was charged on 12 counts of fraud relating to the obtaining of funds, totalling $800,000, from self-managed superannuation fund (SMSF) investors during 2013 and 2014. The funds were allegedly to be invested in debentures associated with the companies Arion Financial Pty Ltd and Arion Property Pty Ltd. 
He also faces three charges of acting in the management of three corporations (MOGS Pty Ltd, Sleipner Financial Pty Ltd and Arion Financial Pty Ltd) whilst disqualified from doing so.
ASIC obtained an arrest warrant after concerns that Gore may not remain in the jurisdiction. 
Gore was picked up by the police while on his way to catch a flight to Stockholm, adds Fairfax Media. 
He was not required to enter a plea and was granted conditional bail. The matter is listed for return at the Brisbane Magistrates Court on May 5, 2017. 
If proven, the fraud charges could see him getting penalties of between five and 20 years.
The charges of acting in the management of corporations whilst disqualified each carry a maximum penalty of one year imprisonment or 50 penalty units.
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Former property developer Craig Gore arrested and charged with fraud

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A former Westpac home finance manager has been jailed in the Southport District Court to three years imprisonment, to be released after six months on a recognisance order. 
David St Pierre was found guilty on three counts of dishonest use of his position, with the intention of directly or indirectly gaining an advantage for himself or others.
ASIC alleged that between July 2008 and June 2010, St Pierre submitted loan applications for approval knowing they contained false information and documents. 
St Pierre obtained over $2.5 million for Westpac customers, that they invested with a now failed Tasmanian property development scheme, operated by Capital Growth International Club Pty Ltd (CGIC) and All About Property Developments Pty Ltd (AAPD).
"St Pierre's actions betrayed the trust of his clients and caused them significant financial harm. This sentence showed such behaviour will not be tolerated,” ASIC Commissioner Peter Kell said.
The matter was prosecuted by the Commonwealth Director of Public Prosecutions.
St Pierre's recognisance is in the sum of $1000, conditioned that he be of good behaviour for a period of 3 years.
ASIC's investigation found that the customers to whom the loan applications related were elderly and vulnerable and with limited financial means, yet in spite of this, St Pierre encouraged them to borrow against their homes, some of which were unencumbered, to invest with CGIC and AAPD, which promised returns of 12–20% per annum.  
The customers received monthly interest payments from CGIC and AAPD after they invested, however, the interest payments stopped shortly before a liquidator was appointed on 28 February 2011. This left customers without sufficient income with which to repay their loans to Westpac.
Westpac has compensated customers who obtained loans from Westpac through St Pierre in relation to amounts they invested in CGIC.  Westpac has also compensated investors who did not borrow funds from Westpac but claimed to have had some direct contact with St Pierre before making their investment in CGIC. 
In March 2014, ASIC permanently banned Mr St Pierre from engaging in credit activities and providing financial services.
 
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Former Westpac manager jailed for fraud

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The former CEO of collapsed debenture issuer, Wickham Securities Ltd, was yesterday sentenced to five years' imprisonment after pleading guilty to various charges brought by ASIC, including fraud.
Garth Peter Robertson, 50, of Parrearra on the Sunshine Coast in Queensland pleaded guilty on 15 July 2016 to:
<ul>
<li>ten counts of dishonestly obtaining property totalling $761,504 from Wickham between December 2010 and November 2012;</li>
<li>one count of dishonestly obtaining $15,000 from Balmain NB Corporation Ltd in November 2010;</li>
<li>nine counts of giving or permitting the giving of false information about Wickham to its trustee, Sandhurst Trustees Ltd in 2012; and</li>
<li>one count of falsifying books relating to the affairs of Wickham in 2012.</li>
</ul>
In the Brisbane District Court yesterday, Mr Robertson was sentenced to a total of five years' imprisonment in respect of the 11 fraud offences, to be suspended after 20 months for a period of five years.
Mr Robertson was also sentenced to a total of 18 months' imprisonment for the offences relating to the false information given to Sandhurst and the falsification of Wickham's books. That sentence is to be served concurrently with the sentence imposed in respect of the fraud offences.
The Court heard that between 15 December 2010 and 27 November 2012, Mr Robertson dishonestly obtained a total of $761,504 from Wickham, which he used for his personal benefit, including for a house deposit, holiday, car, credit card and mortgage repayments and the payment of taxation debts.
On ten occasions, Mr Robertson, who was authorised to transact on Wickham's bank accounts, dishonestly directed payments of between $9,300 and $217,500 to his personal bank accounts. They were disguised as legitimate transfers in respect of some of Wickham's loan clients and creditors.  
A separate count related to $15,000 that Mr Robertson dishonestly obtained from Balmain on 25 November 2010. Mr Robertson purported to provide Wickham's bank account details to Balmain for the transfer of funds but provided his personal account details instead.
The Court also heard that between July and November 2012, Mr Robertson gave information to Sandhurst which:
<ul>
<li>falsely stated that no debentures had been issued by Wickham;</li>
<li>grossly inflated Wickham's cash holdings on eight occasions (on one occasion by $3 million when the actual balance was only $16,000); and</li>
<li>contained false information about the status of the loans advanced by Wickham, including that no loans were in arrears when in fact multiple borrowers had defaulted on the loans and no funds would be recovered by Wickham.</li>
</ul>
On 27 August 2012, Mr Robertson falsified a Wickham bank statement to give the impression that the account balance was approximately $1.6 million when the actual balance was less than $350,000.
Mr Robertson gave the altered bank statement to Wickham's accountant which was used to prepare Wickham's financial report for the year ended 30 June 2012. As a result, the financial report overstated Wickham's cash assets by nearly $1.3 million and showed net assets of approximately $900,000 when it actually had liabilities of $386,000.
On 30 November 2012, Mr Robertson gave Sandhurst a balance confirmation letter for a Wickham bank account, which he had altered to show a balance of approximately $10.8 million when the actual balance was less than $265,000.
In sentencing Mr Robertson, Judge Moynihan said that Mr Robertson took money from Wickham when he knew that the company was in trouble, which ultimately diminished the sum available to creditors of the company. Judge Moynihan said that the victims of Mr Robertson's "fraudulent and deceitful behaviour" had been adversely affected and that there were devastating consequences for those who lost money as a result of Mr Robertson's conduct.
The Commonwealth Director of Public Prosecutions prosecuted the matter.
Wickham Securities collapsed owing more than $27 million to 300 debenture holders.
 
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Former Wickham Securities CEO jailed for five years

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The Australian Securities and Investment Commission has banned the director of a financial services company for six months on charges of cheating.
Anthony John Downey, of Brighton, Victoria, has been banned from providing financial services for six years following an investigation. 
Downey was, until 3 June 2015, a director of Platinum Mortgage Securities Limited.
ASIC said it found Downey engaged in misleading conduct by providing false documents to support an application for an Australian visa, knowing that the documents would be provided to an Australian government department.
ASIC found that the relevant documents prepared by Downey falsely represented that the visa applicant had made a qualifying investment with Platinum Mortgage Securities Limited.
ASIC Commissioner Greg Tanzer said, “ASIC expects directors and officers of financial services licensees to act with integrity when performing their role and, when they fail to do so, we will act to remove them from the industry.”
The matter was reported to ASIC by Platinum Mortgage Securities Limited.
Downey has the right to appeal to the Administrative Appeals Tribunal (AAT) for a review of the decision.
 
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ASIC bans former director of financial services business

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A real estate agent and company director accused of creating fictitious real estate listings to obtain early commissions and defrauding his company’s trust account of $808,173.69 has been handed a two-year jail term after he pleaded guilty to 12 charges in a Parramatta local court in Sydney.
The charges included a number of Crimes Act offences, including fraud and making and using false documents as well as offences under the Property, Stock and Business Agents Act for fraudulently converting money. A number of other charges were admitted and taken into consideration for sentencing.
Shaun Andrew Crockford, from Claremont Meadows, was sentenced to two years’ imprisonment to be served by way of an Intensive Corrections Order commencing 30 March 2016 and concluding 29 March 2018.
Fair Trading Commissioner Rod Stowe said Crockford, who was the sole director and company secretary of Quakers Hill Property Management Pty Ltd, created false contracts for sale of land signed by fictitious vendors and purchasers, false bank account statements, false sales ledgers and false stamped bank deposit slips.
“He was robbing Peter to pay Paul to keep his cash flow going,” he said.
“He fabricated 71 sales contracts for the purposes of drawing commissions from debtor factoring agencies, he provided fabricated records to the agency’s auditors over a number of years and created several fake owner statements issued to landlords detailing remittances that were never paid.
“Mr Crockford also fabricated a sales inspection report, exclusive agency agreement and sales contract document using the name of a former client and used an old contract reference number on the sales document.
“Furthermore, as a result of the defalcation of the trust fund, there was insufficient money to cover genuine purchasers’ sale deposits to account to genuine vendors on five real estate sales transactions in 2015.”
Properties were ‘created’ by Crockford for his fraudulent transactions in suburbs including Kellyville, Rouse Hill, Cherrybrook, Beaumont Hills, Schofields and Castle Hill.
NSW Fair Trading appointed managers over Quakers Hill Property Management Pty Ltd on 9 January 2015.
On 5 November 2015, NSW Fair Trading cancelled Crockford’s real estate agent’s licence and disqualified him from holding a licence for 15 years. He is also disqualified from being involved in the direction, management or conduct of the business of a licensee for 15 years.
 
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NSW real estate agent gets two-year jail term for fraud 

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Former Sydney finance broker, Jennifer Mary Farias, pleaded guilty to three charges of loan fraud which resulted in her receiving more than $100,000.
Farias was the director of finance broker, Mortgage Finance &amp; Insurance Pty Ltd trading as Up N Riding (MFI). MFI arranged finance for vehicles such as motorcycles, cars and jet skis on behalf of clients.
Appearing in the NSW Local Court at the Downing Centre in Sydney, Farias admitted to having received $96,270 in loan funds and $10,349.26 in commissions from a credit provider as a result of submitting 10 loan applications, through MFI, which contained false information and false invoices.
The invoices contained false information relied on by the credit provider when approving loans. Farias admitted the relevant loans would not have otherwise satisfied the credit provider's lending policies or would have been subject to more stringent lending policies. The false information contained in the invoices included:
<ul>
<li>a Mercedes Benz car had been sold by a dealer for $20,000 when in fact it had been a private sale for about $9,000;</li>
<li>a customer had bought a 2012 Toyota Landcruiser Prado with 62,036 kilometres on the odometer for $48,000 with a $25,000 deposit when in fact a 2006 Toyota Landcruiser Prado with 192,036 kilometres on the odometer was purchased for $21,500 with no deposit;</li>
<li>customers had bought on-road registrable motorcycles when in fact they bought off-road four wheel quad bikes; and</li>
<li>a customer had bought a jet ski for $15,000 with a deposit of $6,250 when in fact the jet ski had been purchased for $10,750 with a deposit of $2,000.</li>
</ul>
The false invoices also stated that approved loan funds should be deposited into bank accounts controlled by Farias rather than into those of the vehicle suppliers entitled to the proceeds of the loan funds.
One loan application was also supported by a false payslip purporting to show a customer had earned year to date income of $30,857.86 when in fact he had only earned $8,496.04.
An additional $20,000 in loan funds and $4,675.80 in commissions received as a result of fraudulent invoices were transferred by Farias to independent referrers or others who benefited from the supply of the false information.
The matter has been held over to May 10, 2016.
The Commonwealth Director of Public Prosecutions is prosecuting the matter.
<h2>Background</h2>
Since becoming the national regulator of consumer credit on 1 July 2010, ASIC has banned 62 individuals or companies from providing credit services or had their credit licences revoked (including 27 permanent bans and 17 cancellations or suspensions) in relation to false loans. Since July 2010, ASIC has also brought criminal prosecutions against 11 credit service providers.
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Former Sydney finance broker pleads guilty to loan fraud: ASIC

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Cymon Fontaine, a consultant for Wyndham Vacation Resorts, has been charged by the ASIC with seven charges of fraud and appeared in the Southport Magistrates Court. The Australian Securities and Investments Commission alleges that Fontaine defrauded six clients for a total of $105,910.10 and caused a loss of $4,500 to another client.
Fontaine has been charged under sections 408C(1)(d) and 408C(1)(e) of the Criminal Code 1899 (Qld). The maximum penalties under these sections is between five and 12 years imprisonment.
Between 28 June 2011 and 1 July 2013, Fontaine was an authorised representative and Corporate Upgrades Consultant for Wyndham Vacation Resorts South Pacific Limited (Wyndham), a financial services company selling time share interests in resorts and hotels.
Between April 2013 and October 2013, Fontaine exploited the credibility and contacts gained from his position as a Corporate Upgrades Consultant to contact existing clients. He then offered to assist them with upgrades and the purchase of second hand credits at a cheaper rate than what was being offered by Wyndham.
Fontaine used these funds for his own purposes, never purchasing the agreed second-hand credits for the clients. Upon learning of his behaviour, Wyndham terminated Fontaine's employment on 1 July, 2013. However, Fontaine continued to defraud some clients after his employment was terminated.
"This kind of dishonesty is not tolerated by ASIC or the community," ASIC deputy chair Peter Kell said.
This matter is being prosecuted by the Commonwealth Director of Public Prosecutions.
<h2>Background</h2>
Wyndham is a developer and marketer of flexible, points-based holiday ownership products. Clients buy into different levels of memberships with Wyndham by buying "points" or "credits" from Wyndham. Depending on a client's level of membership (determined by the number of credits the client has) they are allowed different levels of privileges and benefits, including using their credits to stay at Wyndham's resorts and hotels or partner resorts or hotels.
The matter was before the court on March 21 and is again listed for mention in Southport's Magistrates Court on April 18, 2016. Fontaine applied for and was granted bail on his own undertaking.
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Wyndham Vacation Resorts consultant charged by ASIC with defrauding clients

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A former Sydney financial adviser has been handed a six-year jail sentence over a <a href="https://www.smartcompany.com.au/legal/45007-melbourne-lawyer-jailed-for-12-years-over-calculated-and-complex-ponzi-scheme">23-year-long Ponzi</a> scheme that saw her swindle close to $6 million from more than 150 clients.
Melinda Scott operating her own financial planning and advisory business, Roach Graham Scott, between January 1989 and December 2012 and between February 2004 and May 2012, was an authorised representative of Millennium 3 Financial Services, a wholly-owned subsidiary of ANZ Bank.
The Australian Securities and Investments Commission began investigating Melinda Scott in 2011 and banned her from managing a business in 2012.
This week Scott was convicted on three charges of dishonest conduct and four charges related to making and using false documents involving $5.9 million of her clients’ money.
ASIC said in a statement Scott’s misconduct largely involved long-term superannuation and annuities products.
Scott was found to have made regular payments to some clients who were expecting pension payments, and so ASIC estimates the net benefit of the scheme to Scott was approximately $2.9 million.
The $2.9 million was reportedly spent on home renovation, holidays and school fees, as well as managing the costs of her business.
Scott pleaded guilty to deceiving her clients in December 2013, with the court hearing she convinced clients, including close friends, to have their financial documents sent directly to her. She was accused of doctoring statements to hide her client’s depleting bank balances.
A spokesperson for ANZ told SmartCompany the bank immediately suspended Scott’s authorisation to deal with clients while her conduct was investigated, and later revoked her authorisation with Millennium 3.
“A large team of people both from within ANZ and from Clayton Utz and Ernst &amp; Young have worked tirelessly to conduct a thorough investigation into Ms Scott’s files,” the spokesperson says.
ANZ has compensated 140 of Scott’s clients who were found to have been affected by her scheme. A total of $5.715 million has been paid to date and ANZ is addressing some tax issues with the ATO to compensate a remaining 17 clients affected by the scheme.
“We have also completed a thorough review of our processes and the circumstances surrounding the incident,” says the ANZ spokesperson.
“We are committed to strong compliance and have worked to ensure we have robust processes in places across our advisory network."
Andrew Morgan, forensic services partner at BDO Australia, told SmartCompany the scheme shows how much trust individuals and business owners place in their financial advisers.
“Ordinarily you would expect to send your financial statements to your adviser and they would review is reasonably consistently,” Morgan says.
“But in this case, the clients trusted the adviser too much, which allowed them to keep on going.”
Morgan says small business owners must understand every transaction their advisers make on their behalf and although the ASIC has been taking an increasingly high-profile role in educating mum and dad investors about the risks around financial advice, the same risks apply to business owners, especially when it comes to insurance and superannuation products.
“The same rules apply as with any investment scheme,” he says.
“It’s not too different to starting a small business … you are putting a lot of faith and trust in people.”
Deborah Kent, national president of the Association of Financial Advisers, told SmartCompany small business owners should equate finding a financial adviser with hiring an employee.
“You should do reference checks, do your homework,” Kent says.
“Find out who they are licensed to, whether they are independent. Check out their education and qualifications and if they are a member of a professional association. If they are, they will be working under a code of conduct.”
While Kent says ASIC will soon oversee a register of financial advisers, often the best way to find a reputable adviser is to get a referral from a previous client or your existing accountant or lawyer.
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
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Former ANZ financial adviser jailed for $6 million Ponzi scheme

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The Melbourne man arrested after an alleged $110 million mortgage fraud, Aizaz Hassan, was writing loans until his accreditation was stopped this week.
Hassan held his credit licence through several lenders since 2011, currently with Australian Finance Group, one of the country's largest mortgage brokerage networks.
His credentials were listed on <a href="https://www.linkedin.com/profile/view?id=118590288&amp;authType=NAME_SEARCH&amp;authToken=6a7k&amp;locale=en_US&amp;srchid=1644771001420581775102&amp;srchindex=1&amp;srchtotal=1&amp;trk=vsrp_people_res_name&amp;trkInfo=VSRPsearchId%3A1644771001420581775102%2CVSRPtargetId%3A118590288%2CVSRPcmpt%3Aprimary" target="_blank">linkedin</a>.
The allegations relate to loans between 2008 and 2011, so do not relate to his recent employment. 
 <img src="/images/2015/01/07/Picture%2021.png" alt="">
<img src="/images/2015/01/07/Picture%2022.png" alt=""> 
An AFG spokesperson advised Hassan had been suspended, according to Fairfax Media.
His position was as a finance and operations manager at Cigna Financial, which is part of the AFG network.
Hassan and another Melbourne man, Najam Shah, have been arrested and charged following an ASIC investigation into the alleged use of false documents in support of loan applications valued at about $110 million.
Shah and Hassan have been charged with one count each of common law conspiracy to defraud, according to an ASIC release.
The charges relate to the men’s roles at a Footscray company, Myra Home Loan Pty Ltd trading as Myra Financial Services (no longer trading).
It is alleged that between April 2008 and December 2011, Shah and Hassan conspired to defraud 12 lenders, banks and other financial institutions, by creating and using false documents to support loan applications submitted on behalf of Myra clients.
The false documents included bank statements, payslips, citizenship certificates and statutory declarations. These were predominantly used in support of applications for home loans for house and land packages as well as for the purchase or refinance of existing homes. 
<a href="/expert-insights/finance/arrests-follows-after-12-lenders-caught-in-alleged-110-million-myra-home-loans-fraud">At least 350 loans valued at $110 million were submitted and approved</a> on behalf of Myra clients.
The alleged conspiracy involves submission of false documents for more than 300 loan applications to numerous banks and financial institutions, including the Commonwealth Bank of Australia, Westpac Banking Corporation, St George Bank, Bankwest, Adelaide Bank, ANZ, Bank of Queensland, Choice Home Loans, Citibank, National Australia Bank, Pepper Homeloans and Suncorp Bank.
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AFG suspends mortgage manager after $110 million Myra Home Loans fraud arrest

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Two Melbourne men, Najam Shah, 55 of Glen Waverley, Victoria and Aizaz Hassan, 34, of Truganina, Victoria have been arrested and charged following an ASIC investigation into the alleged use of false documents in support of loan applications valued at about $110 million.
Shah and Hassan have been charged with one count each of common law conspiracy to defraud, according to an ASIC release.
The charges relate to the men’s roles at a Footscray company, Myra Home Loan Pty Ltd trading as Myra Financial Services (no longer trading).
It is alleged that between April 2008 and December 2011, Shah and Hassan conspired to defraud 12 lenders, banks and other financial institutions, by creating and using false documents to support loan applications submitted on behalf of Myra clients.
The false documents included bank statements, payslips, citizenship certificates and statutory declarations. These were predominantly used in support of applications for home loans for house and land packages as well as for the purchase or refinance of existing homes. 
At least 350 loans valued at $110 million were submitted and approved on behalf of Myra clients.
The alleged conspiracy involves submission of false documents for more than 300 loan applications to numerous banks and financial institutions, including the Commonwealth Bank of Australia, Westpac Banking Corporation, St George Bank, Bankwest, Adelaide Bank, ANZ, Bank of Queensland, Choice Home Loans, Citibank, National Australia Bank, Pepper Homeloans and Suncorp Bank.
Property Observer gleans the company was established in 2006 out of Whitehall Street premises.
The offence carries a maximum penalty of 15 years imprisonment.
Shah appeared at the Melbourne Magistrates’ Court and Hassan before a bail justice on 2 January 2015.
Shah and Hassan were bailed on conditions including that they report to police twice a week, surrender valid passports or any other valid travel documents and not apply for any other, not attend any points of international departure and not leave Australia.
Both men are to reappear at the Melbourne Magistrates’ Court on 17 April 2015.
Manija Zayee, Shah’s partner and former Myra director, has also been charged on summons in connection with this matter with one charge of obtaining a financial advantage by deception. Zayee is to appear at the Melbourne Magistrates’ Court on 27 January 2015.
It is alleged that Zayee submitted false documents in support of a loan application for a home loan, in her own name, in September 2009.
The matters are being prosecuted by the Commonwealth Director of Public Prosecutions.
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