Fraud

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The multi-national eight-month investigation by WA's major fraud squad, Australian Federal Police and authorities in South Africa and Nigeria has resulted in a year's jail for the convicted mastermind.
Ntuen Promise Ekenmini tried to sell a $780,000 home in the Perth suburb of Falcon using forged documents.
The Nigerian court heard the attempted fraud began when after a property manager of a Mandurah real estate agent was contacted in December 2012 by a man claiming to be the owner of a home managed by the agency.
He requested property documents, which were sent through by the property managers and contact details changed.
He used a Yahoo email address in the name of one of the real owners, who was a Johannesburg resident, and requested that all future correspondence be forwarded to this new email address and all phone contact to be made through a new mobile phone number.
The agency then received a request to sell the property and a sales agreement with false signatures was sent, along with copies of fake passports of the two owners and forged documents purporting to be from the Australian High Commission in Pretoria confirming their identity.
The agency staff became suspicious, WA's fraud squad was contacted and they pretended to go ahead with the sale to try to identify the fraudsters.
"It had generally been thought that people attempting to perpetrate frauds from Nigeria were beyond the reach of the law," Consumer Protection assistant commissioner Gary Newcombe said.
"This prosecution shows that, while difficult, prosecution is not impossible.
"The imprisonment of Mr Ekenmini should send a strong message to other potential fraudsters in Nigeria that they are not beyond the law."
Detective Senior Sergeant Dom Blackshaw of the Major Fraud Squad (WA Police) noted in 2013 the arrest represented a major breakthrough in the investigation of real estate fraud in Western Australia where there were two successful and five attempted frauds reported over the past five years.
“Six of the seven cases involved owners who live in South Africa, have investment properties in Perth which are rented and have had their identities stolen. There is now clear evidence of a link between criminals in South Africa and Nigeria," detective Senior Sergeant Dom Blackshaw said.
The first successful property fraud in Western Australia was reported in September 2010 when home owner Roger Mildenhall, based in South Africa, discovered his investment home in Karrinyup, Perth had been sold for A$485,000 in August 2010 without his knowledge or consent by the agent who was managing the property on his behalf.
In April 2011, a home in Ballajura, another suburb of Perth, owned by a couple who were living in Nigeria at the time, was sold for $410,000 allegedly by Nigerian fraudsters without the knowledge or permission of the real owners. The fraudulent sale was not reported until August 2011 when the owners returned to Perth wanting to inspect the property.
In both these cases the funds were transferred to bank accounts in China.
In November 2011, the Codes of Conduct for WA real estate agents and sales representatives and settlement agents (conveyancers) were strengthened to incorporate strict identity verification guidelines for all transactions, particularly involving overseas owners.
The Western Australian government’s land titles office, Landgate, has also put in place strict fraud prevention measures.
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Jail for Nigerian mastermind behind 2012 Perth property fraud

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Property fraud is one of the worst nightmares of home owners, with recent reports of unidentified third parties attempting to sell other peoples’ homes while the owner is abroad.
In July, an owner was living in South Africa and <a href="/news/act/absentee-macgregor-landlord-loses-act-home-to-south-african-fraudster">found that his Canberra house had been sold </a>after contacting his ACT property manager, having not received four expected rental payments.
The ACT Police became involved to rectifying the issue.
However, what can you do to ensure that things don't get that far for your property? The Office of Regulatory Services has 15 steps that all property owners can take to protect themselves.
They note that investment properties are generally more at risk than owner-occupied homes.
The 15 steps to take:
<ol>
<li>Before selecting an agent, ask questions about their procedures when dealing with overseas owners. 
</li>
<li>Keep in regular contact with your agent. 
</li>
<li>Pre-establish security questions with your property manager/agent, that only you will be able to answer, and requesting these security questions be used whenever the property manager/agent contacts you. The security questions should be established verbally and not written in an email, as emails may be compromised if the account has been hacked. 
</li>
<li>Regularly check that your property manager/agent has your current and correct contact details on file. 
</li>
<li>Ensure that your property manager/agent has a process in place to verify any requests to change your contact details, for example by sending notifications to both the old and new addresses, both electronic and postal. 
</li>
<li>Ensure that your property manager/agent has your correct signature on file and that they check all signed documents to confirm the signatures match. 
</li>
<li>If travelling overseas, ask a family member or close friend to keep an eye on your property and to keep in contact with your property manager/agent on your behalf. This person should be introduced to the agent by you and security questions should be established for them as well. 
</li>
<li>If possible, keep in touch with neighbours so they can advise you of any changes in the property. 
</li>
<li>Check rental statements regularly. 
</li>
<li>Protect personal information by using secured mailboxes for mail deliveries and shredding or burning letters before disposing of them. 
</li>
<li>Be wary of giving personal and/or financial information to third parties, either by phone or email. 
</li>
<li>When replying to an email, typing the known genuine email address rather than simply clicking the ‘reply’ button – an email may have a hidden address in it. 
</li>
<li>Regularly change passwords for email and banking accounts. 
</li>
<li>Never click on any links contained in emails from unknown sources. 
</li>
<li>Install anti-virus/anti-malware software on personal computers and keep it up-to-date.
</li>
</ol>
 Source: Office of Regulatory Services
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15 steps to avoid property fraud: Office of Regulatory Services

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Overseas scam artists who are targeting tenants under the guise of being international brands are increasingly catching renters in scams, says Certified Practising Real Estate Agents (CPREA) chairman Geoff Baldwin.
In the past week CPREA has received two reports of tenants who were asked to transfer money offshore into accounts they thought belonged to real estate agents.
The accounts were in fact owned by fraudsters looking to get their hands on the tenants’ funds.
The tenants had been responding to online advertisements, which had promoted a Perth property for rent. The owner had no knowledge of the advertisements.
“The fraudster simply chooses a property, usually an apartment in a larger complex and then promotes it at a drastically lower rent than others in that complex so as to attract maximum inquiry,” Baldwin warns.
“In both cases the respondents have been people who are doing it tough and who had found it hard to secure a rental property elsewhere hence are attracted by the lower rent.”
The modus operandi of the scammers is to request a wire transfer to an overseas account. After this point, communication ends, explains Baldwin.
“Sadly, in one of these incidences the tenants, a single mum with a four year old, transferred all of the money they had been saving for months to pay what they thought was the bond on a rental apartment,” he said.
Baldwin provides these tips for avoiding the scams:
<ol>
<li>Be wary of requests to transfer funds offshore 
</li>
<li>Poorly worded emails and misspellings are another bad sign 
</li>
<li>If you think it’s a reputable brand – check if they have an office 
</li>
<li>Email the office directly</li>
</ol>
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Offshore scam artists pretending to be international brands targeting tenants

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The Real Estate Institute of New South Wales is lending its voice to warnings from the New South Wales Minister for Fair Trading about the risk of property fraud. After an <a href="/news/act/absentee-macgregor-landlord-loses-act-home-to-south-african-fraudster">ACT landlord's home was sold</a> without his consent while he was overseas, NSW minister Matthew Mason-Cox advised real estate agents to remain aware of the risks of fraud. “Identity fraud and scams are increasingly common throughout the community and the property industry is not immune to this criminal activity," said Mason-Cox. “Once a fraudster has a target they will contact the managing agent, pretending to be the property owner, and request their address and contact details be changed, cutting the real owner out of future correspondence.
“Soon after this, the fraudsters are back in touch with the agent requesting the property be sold. The intention is that once the property is sold, the fraudsters intercept the settlement paperwork, steal even more of their victim’s identity and ultimately take the proceeds of the sale.”
NSW Fair Trading introduced guidelines for preventing fraud in real estate in 2012, including a proof of identity checklist for vendors.
Malcolm Gunning, president of the Real Estate Institute of New South Wales (REINSW), said the group supports NSW Fair Trading's guidelines. “We take matters of fraud and fraud prevention very seriously,” said Gunning.   “At our recent roadshow events across NSW we spoke to over 1,000 members about possible identity fraud and the key signs to watch for, including requests for contact details to be changed.”   “We have instructed our members to be vigilant and take the guidelines seriously," Gunning said.   “We need co-operation from the public who should be aware that Real Estate professionals will ask them for identification, they should not be offended if an agent seeks extra documentation.     “The NSW Police or NSW Fair Trading should be contacted if identity fraud is suspected," he advised.
YOU MAY ALSO LIKE TO READ: 
<a href="/news/14-anti-fraud-tips-for-investment-property-owners-and-vendors">14 anti-fraud tips for investment property vendors</a>
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REINSW lends support to minister's fraud warning

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A former real estate agent, Afif Shaba, has been banned from holding a real estate licence for eight years due to his part in a $50,000 trust account fraud.
Shaba authorised his business, Northern Real Estate Pty Ltd, to fraudulently use $50,000 of trust account money that had been received between January and November 2012 for their own purposes, found the Victorian Civil and Administrative Tribunal.
VCAT found Shaba guilty of conduct that made him unfit to hold a licence.
Shaba was the sole director and officer in effective control. The funds used was tenants’ rent that was owing to the investors, and it was found he breached the Estate Agents Act 1980 by knowingly authorising the business not to retain the funds.
He had withdrawn the trust money to pay business expenses in March 2012. This was due to a downturn leaving him in financial difficulty, and saw Shaba admit this to Consumer Affairs Victoria inspectors.
At one point it was noted that there was a $50,000 deficiency in the trust fund, reduced to $15,000 when he was inspected in November 2012.
Shaba looked to pay back the missing funds, have his accounts audited, sell the business and stop operating as a real estate agent. His agency’s licence was cancelled in March 2013.
He will be eligible for a licence after 9 July 2022.
Edit: The above story has been amended. Details provided by Consumer Affairs Victoria included inaccurate references to agency details.
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Victorian agent banned for eight years after $50,000 trust account fraud

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ACT police are investigating a real estate fraud after a Canberra home sold without the consent of the absentee landlord home owner.
The real estate scam at <a href="/news">Macgregor</a> has all the hallmarks of prior fraudulent sales by overseas fraudsters.
The owner, living in South Africa, discovered the north side house had been sold after contacting her local ACT property manager as she had not receive the past four rental payments. 
ACT Police has taken control of the investigation in consultation with police in South Africa. 
"Police will investigate a series of exchanges which led to the sale of the property without the owner’s knowledge or consent, and the disbursement of the funds generated by the deception," the statement said.
The ACT Attorney General Simon Corbell has warned home owners to be vigilant of scammers.
The details of the Macgregor scam have not been publicly released, but Property Observer notes sales over the period between last October and February this year ranged between $200,000 and $560,000. There was a $335,000 average sale price.
There have been similar cases in WA including two successful sales and six attempted real estate frauds.
The ACT Real Estate Institute CEO, Ron Bell told 2CC Capital Radio that agents and homeowners must be wary as the scammers tend to get through the web.
YOU MAY ALSO LIKE TO READ: 
<a href="/news/14-anti-fraud-tips-for-investment-property-owners-and-vendors">14 anti-fraud tips for investment property vendors</a>
 
 
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Absentee Macgregor landlord loses ACT home to South African fraudster

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A Sunbury man appeared in the Melbourne Magistrates Court after the Australian Securities and Investment Commission alleged that he fraudulently obtained more than $1 million from investors.
Barry John Patrick, a 71 year old from Sunbury, Victoria, allegedly obtained the money from 14 investors between 2007 and 2010, telling investors it was to be used to fund a property development.
The Australian Securities and Investment Commission (ASIC) allege that Patrick took some of the funds for personal use, and used some of the money to pay interest payments to past and existing investors and to make loan repayments. According to ASIC, investors were persuaded to refinance their self managed superannuation funds and homes, take out additional loans or use credit cards to pay Patrick.
Patrick has been charged with eight counts of obtaining property by deception, five counts of obtaining financial advantage by deception, one count or theft and one count of running a financial services business without an Australian financial services license.
The charges relate to the three-year period between 2007 and 2010, in which ASIC alleges Patrick formed companies to purchase properties for development and consequently persuaded investors to refinance their homes or self-managed super funds, or take out additional loans or credit cards.
“ASIC allege the funds raised by Mr Patrick were not used to develop the properties, instead, they were used to pay interest payments to past and existing investors and to meet repayments on loans as well as for personal use,” said the regulator.
But this is not the first time Patrick has fallen on the wrong side of the law.
In 2010, Patrick <a href="https://www.asic.gov.au/asic/asic.nsf/byheadline/10-257AD+Melbourne+director+sentenced?openDocument" target="_blank">received a four-month suspended jail sentence</a> and a five-year good behaviour bond after pleading guilty to one charge of carrying on a financial services business without holding an AFS license and three charges of managing a corporation while disqualified.
According to ASIC, during August 2003 and December 2006, Patrick persuaded 40 investors to invest in three companies: E.K.B Properties, Sandgrove Specialised Securities and Cardinia Specialised Securities.
During the time, E.K.B Properties raised approximately $4 million, Sandgrove Specialised Services raised approximately $1.5 million and Cardinia Specialised Services raised approximately $1 million.
<a href="https://www.moneymanagement.com.au/news/superannuation/2014/victorian-charged-with-smsf-property-fraud" target="_blank">According to Money Management</a>, ASIC alleged Patrick and his associate Karl Heinz Veljkovic were pushing investors to roll over their superannuation into self-managed funds and then invest those funds into the three companies.
However, the companies, which were controlled and managed by Patrick and Veljkovic, were placed into liquidation by the Federal Court in 2007 following investigations by ASIC. As of December 2010, ASIC said none of the investors had been repaid.
In 2007, both men consented to Federal Court orders banning them from carrying on a financial services business; parting with any funds that have come into their possession by issuing, selling or offering a financial product; and managing corporations for a period of 20 years.
Graeme Colley, director of technical and professional standards at the SMSF Professionals’ Association of Australia, said these kinds of cases arise from time to time, and are the result of a “failure of the independence between initial advice given to individuals and where the money ends up”.
Colley says cases like this don’t preclude investing your self-managed super fund in property, but says “the hotter it gets, the closer you are getting to the fire”.
As a general rule, Colley says investors should only consider advice from advisers with AFS licenses. This way, if something goes wrong, the investor potentially has some recourse against the licensee and can use formal complaints arrangements.
Colley says it is also important to do your own research and be as thorough as possible. “Make some investigations into who owns the business, the relationship between the adviser and the organisation, and if there are any other real investors,” says Colley.
Patrick is next due to appear in court on 16 September. He faces a maximum 10 years in jail for each of the deception and theft charges, and a maximum jail sentence of two years if found guilty of operating a financial services business without an AFS license.
Parts of this article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
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Melbourne property developer charged with $1 million fraud

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Real estate agents have been given an official warning to be on high alert for property scams by Attorney-General Simon Corbell after three people were arrested by South African Police over an attempted fraudulent sale of a Western Australian home.
Corbell, who said that it was one of the most serious types of scam, is calling for real estate agents to be on their guard.
"A property scam can result in a home being sold without the lawful owner's knowledge or permission. This type of scam traditionally occurs when the owner lives or is travelling overseas," Corbell said.
"Many professionals apart from those in the real estate industry are involved when a property is sold.”
Each of those professionals must be diligent in checking details, particularly when dealing with overseas transactions, he said.
"Independently confirm any change in contact details for the properties you manage to ensure you are dealing with the real owner.  Signatures should be checked with originals on file.  Have any doubtful documents verified by the issuing authority.”
"Home owners, particularly absentee owners, are also warned to be vigilant.  Have suitable protocols in place, for example, security questions, to prevent the possibility of your home being sold without your knowledge or permission."
Three people were arrested in Johannesburg earlier in the month following a five months investigation by the Major Fraud Squad of the Western Australia Police.
The trio allegedly emailed a <a href="/news">Mandurah</a> real estate agency, which was managing a property owned by a South African person, pretending to be the owner and managed to convince the agency to change the owner’s contact details to their own.
Forged signatures were used, and the <a href="/news/wa/three-arrested-in-south-africa-after-wa-home-sale-scam">property was put on the market before an offer being accepted by the trio</a>.
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Real estate agents put on alert after WA fraud case

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An ASIC investigation found that Shashi Kanta Prasad of Chipping Norton, New South Wales, had created false loan documents for seven clients to achieve loans totalling more than $3.6 million.
She pleaded guilty in the Downing Centre Local Court to making seven false statements, producing 41 fake documents and using those documents to obtain a financial advantage for her employer in the form of commissions.
She was employed by <a href="https://www.rajprasad.com.au/contact" target="_blank">Raj Prasad &amp; Co Pty Ltd</a>, trading as <a href="https://www.platinumaccountants.com.au/" target="_blank">Premium Financial &amp; Retirement Solutions</a>.
She faces a maximum imprisonment of five years for one offence of obtaining a financial advantage by false or misleading statements, a maximum penalty of five years for one offence of intention to defraud by false or misleading statement, a 10 year maximum penalty for one offence of using false instruments, and  a maximum penalty of 10 years for one offence of using false documents.
The Commonwealth Director of Public Prosecutions is prosecuting the case, with sentencing at the Sydney District Court on 18 July 2014.
A previous July 2012 MFAA notice said: "The MFAA Tribunal has expelled Mrs Shashi Prasad from MFAA membership on the basis that she engaged in, or was vicariously liable for conduct of a misleading, deceptive, dishonest or fraudulent nature. The Tribunal had before it four allegations of such conduct."
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Financial advisor found guilty of $3.6 million of loan fraud

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A Melbourne man who claimed to be a financial planner faced the Magistrates’ Court this week, charged over his involvement in a <a href="https://www.smartcompany.com.au/legal/42108-business-group-swindled-out-of-800-000-through-fraud" target="_blank">fraud</a> scheme said to be worth $100 million over 10 years.
<a href="https://www.theage.com.au/victoria/poker-pro-faces-142-charges-over-100m-fraud-20140528-394ev" target="_blank">Fairfax reports</a> Bill Jordanou, 55, faces 142 charges relating to 40 incidents between 2004 and 2013, including more than 100 charges of “obtaining a financial advantage”, often in the form of home loans and electronic transfers into home loan accounts.
Jordanou is also facing charges related to obtaining property by deception, conspiring to defraud the Commonwealth Bank, ANZ Bank, Bankwest, Bank of Melbourne and Bank of Queensland, conspiring to pervert the course of justice, and the theft of a Mercedes-Benz.
Prosecutor Luke Excell told Fairfax Jordanou is “alleged to have drawn funds using false client approvals and invoices … then used it across various property developments as well as maintaining a lifestyle.”
Excell said Victoria Police became aware of Jordanou’s activities, and those of his associates, when the Commonwealth Bank discovered a number of loan applications lodged on behalf of Jordanou’s clients were supported by false documents, including ATO documents, letters of employment and financial statements.
The bank lodged complaints against accounting firm Zaia Arthur &amp; Associates, where Jordanou was working as a “financial adviser” at the time.
SmartCompany attempted to contact Zaia Arthur &amp; Associates this morning but the phone number listed for the firm has been disconnected.
Jordanou’s lawyer, George Defteros, told Fairfax his client has “been waiting for these charges for two-and-a-half years … and we welcome these charges because Mr Jordanou wants to get on with his life”.
Mark Rantall, chief executive of the Financial Planning Association of Australia told SmartCompany there are a number of rules individual investors and small business owners should follow to safeguard themselves against unsound financial advice.
Rantall says the "golden rule" is to always check the qualifications of the person giving the advice and to make sure they are a member of the FPA, which is the national professional association for financial planners.
“The second golden rule is that if something sounds too good to be true, it usually is,” says Rantall. “If you are being offered a get-rich-quick scheme, the risk associated with that scheme will be extraordinarily high.”
“The third rule is that your financial planner should spend more time talking about you and your investments, than themselves and the products they may be offering,” says Rantall.
Rantall says it is also important to make sure your financial plan matches your own personal risk profile, and that your investments are diversified across different products and different asset categories.
“The final thing would be to make sure you keep you to date with your portfolio and that you always feel comfortable with the investments being recommended,” says Rantall. 
A spokesperson for the FPA told SmartCompany individuals and business owners who are concerned about receiving sound financial advice can use the <a href="https://fpa.com.au/find-a-planner" target="_blank">“Find a Financial Planner” function</a> of the FPA’s website to find an expert, as FPA members are held to higher professional standards. 
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
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