Broker convicted over false loan applications

by Phil McCarroll06 Sep 2016
A former Aussie Home Loans broker has been handed a good behaviour bond after being convicted of on 18 charges involving the submission of false or misleading information to banks.

Madhvan Nair was convicted of the charges in Downing Centre Local Court last week after previously admitting to providing documents in support of 18 loan applications to Westpac Banking Corporation, Australia and New Zealand Banking Group and National Australia Bank knowing that they contained false or misleading information.

The 18 loan applications ranged in value from $10,000 to $490,875.

On 5 July, Nair pleaded guilty to 18 charges under the the National Consumer Credit Protection Act.

An investigation by the Australian Securities & Investment Commission (ASIC) found that Nair submitted the 18 false applications between September 2012 and June 2014. Of the 18 loan applications,12 were approved and disbursed, totalling $3,256,684.

The applications contained documents which purported to be from the applicant's employer. Those documents were false and in most instances, the loan applicant had never worked for the particular employer.

The 18 loan applications ranged in value from $10,000 to $490,875.

Nair received a total financial benefit of $10,083.49 as a result of the approved loan applications, including $7,583.49 in commission and cash payments of $2,500 from two of the loan applicants upon approval of their loan applications.

For each and all eighteen charges, Nair was convicted and released upon entering into a recognizance in the amount of $1,000 on the condition that he is of good behaviour for three years.

In sentencing Nair, Magistrate Atkinson described the offences as serious, however factors such as Nair’s ill-health, along with his guilty plea and cooperation with ASIC helped him escape prison time.

In a statement, Aussie Home Loans said it welcomed the decision. 

"Aussie fully cooperated with ASIC in its investigation, including providing ASIC with results of detailed internal investigations as well as loan files, supporting documentation and other evidence to assist ASIC in its prosecution," the statement said.

"Aussie has a zero tolerance policy to any infringements and believes it has one of the most stringent compliance processes and policies in the industry. Aussie proactively and voluntarily reports any terminated brokers to ASIC and to lenders as part of its governance activity."