AUSTRAC, the government agency that monitors financial crime in Australia, has urged brokers to be on guard as it rates the nation’s risk level as ‘high’ in its latest report.
Major banks were rated as the highest possible level of risk, with their large numbers of customers and high exposure to cash listed as their main weaknesses to financial crime.
The report sent major bank stocks tumbling, with more than a point shaved off CBA and Westpac stocks in response to its publication.
AUSTRAC specifically mentioned the role of mortgage brokers in fraud, and cited hundreds of loans placed with major banks and lenders that they had identified as being fraudulent and involved with money laundering.
“In one instance, a syndicate of lending managers and mortgage brokers was suspected of altering information provided by home loan applicants across the banking sector,” read the report.
“This resulted in hundreds of fraudulent loans, most of which were held with major banks. In another instance, partner agencies identified a large-scale loan application fraud operation that was enabled by a number of mortgage brokers.”
“This operation involved high-level document forgery and was believed to be orchestrated by a serious and organised crime group.”
“During consultations, another partner agency told AUSTRAC that it had identified a number of mortgage brokers helping known criminals obtain home loans. The brokers knowingly allowed the loans to be repaid with illicit funds. In some instances, brokers even deposited illicit cash for these customers.”
Nicole Rose, CEO of AUSTRAC, said that the agency were ramping up risk assessments to help customers and banks.
“Criminals will exploit any gaps and use sophisticated methods for their own personal greed,” she said.
“We are navigating a rapidly changing financial system and advances in technologies and platforms. That is why government, law enforcement and the finance sector must continue to work together to protect Australia’s financial system and Australians from serious and organised crime.”
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