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Monday 9 October 2017

17-337MR Melbourne man sentenced to 5 years jail for role in hundred-million dollar home loan fraud conspiracy

Mr Najam Shah, 58, of Victoria, has been sentenced to 5 years jail after pleading guilty to one charge of conspiring to defraud financial institutions. Mr Shah must serve 3 years and 3 months before being eligible for parole.

The sentencing follows an ASIC investigation into Footscray-based finance broking company Myra Home Loans Pty Ltd, which traded as Myra Financial Services (Myra).

The charge relates to Mr Shah's role at Myra and the creation and use of false documents to support loan applications valued at a total of approximately $170 million.

On 13 February 2017, Mr Shah entered the guilty plea during an appearance at the County Court of Victoria. Mr Shah’s plea followed his arrest and charge in January 2015. By pleading guilty, Mr Shah admitted to conspiring to defraud financial institutions.

In sentencing Mr Shah, Judge Gucciardo noted that mortgage fraud of this nature damages the integrity of the lending system and that Mr Shah's well organised deception enabled such corruption. He further noted that Mr Shah was motivated by greed.

ASIC Deputy Chair Peter Kell said, "ASIC will continue to ensure that mortgage brokers who provide false documentation are held to account. Today's sentencing reflects both the severity of Mr Shah's actions and the consequences facing those who do not abide by the law."

The matter was prosecuted by the Commonwealth Director of Public Prosecutions. 

ASIC's investigation is continuing.

Background

Mr Shah's charge relates to conspiring with others to defraud financial institutions through the provision of false documents in support of loan applications submitted on behalf of Myra clients between about March 2008 and August 2010.

The misconduct involved the submission of false documents for more than 500 loan applications valued at approximately $170 million to numerous banks and financial institutions, including the Commonwealth Bank of Australia, Westpac Banking Corporation, St George Bank, Bankwest, Adelaide Bank, Bank of Queensland, Choice Home Loans, Citibank, National Australia Bank, Pepper Homeloans and Suncorp Bank.

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.

ASIC's MoneySmart website has guidance for consumers using a mortgage broker, which includes:

  • always checking ASIC Connect's professional registers to make sure the person or company they're dealing with is licensed
  • never signing blank forms or leaving details for the broker to fill in later
  • complaining if they suspect misconduct or are unhappy with the product or service they receive.

Since becoming the national regulator of consumer credit on 1 July 2010, ASIC has investigated in excess of 100 matters relating to loan fraud and has achieved many enforcement outcomes against the offenders. The outcomes range from undertakings by persons to voluntarily leave the industry, to bans and prosecutions.      

To date, ASIC has banned, suspended or placed conditions on the licence of 83 individuals or companies from providing credit services (including 35 permanent bans). Through the Commonwealth Director of Public Prosecutions, ASIC has brought criminal prosecutions against 14 credit service providers; with 13 having been convicted of fraud or dishonesty offences relating to the provision of false and misleading information or documents to lenders in client loan applications.

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Last updated: 09/10/2017 01:41