Do we have a Secrets Commissions Act???

Probe into mortgage fraud widens

6:15 PM Tuesday Oct 4, 2016

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11722472

A probe into large-scale mortgage fraud widened yesterday, with charges laid alleging bank staff were paid hundreds of thousands of dollars in kickbacks to approve dozens of fraudulent property loans.

A total of 61 charges were yesterday laid in the Auckland District Court alleging three people who all have interim name suppression, including a lawyer and a bank staff member, breached the little-used Secret Commissions Act.

The charges allege that payments, ranging from $5000 to more than $30,000, were paid by and to bank staff in return for approving suspect mortgage applications.

The Serious Fraud Office said total kickbacks paid exceeded $500,000 , with one accused lawyer alleged to have paid a bank staff member $253,303 over an eight-month period.

Court documents said the trio, who have yet to plead on the charges, "corruptly gave consideration to an agent as an inducement or reward for having done an act in relation to the principal's affairs or business." At a callover hearing, prosecutor Todd Simmonds said the investigation was complex, involving more than 100 charges in total, and a request would soon be made to transfer the case to the High Court.

“It is a very large Serious Fraud Office prosecution of large-scale mortgage fraud," Simmonds said.

The three charged with paying kickbacks are part of a quartet charged last month on 78 charges of obtaining by deception relating to information provided to secure more than $40 million of mortgage finance on dozens of Auckland and Hamilton properties.

According to documents, those charged included a lawyer, a banker, a manager and a company director.

Lawyers acting for the quartet yesterday said they were seeking to keep their names from becoming public, with an urgent hearing set for October 19 to consider a request to extend interim suppression.

Simmonds yesterday indicated the Crown opposed this extension, but would not stand in the way of requests by two banks, former employers of two of the accused, to keep the banks' names out of the headlines.

Not all of the defendants are accused of all of the alleged offending and it is not apparent from available court documents how much of the alleged total relates to each of them.

The SFO alleges, according to court documents, that false salary payments were made as part of the applications for some of the loans in the case. Banks were also allegedly provided with false income and employment information.

A bank staffer, also accused of taking more than $250,000 in secret commissions, processed and approved loan applications to buy properties that he knew "were not true purchases, or was reckless as to whether they were", the SFO alleged.

The offending is said to have taken place between the end of 2011 and October 2015.

Lawyers for two of the accused told the Herald last month their clients would plead not guilty to the charges they face.