Australia's crimes agency regulator flags systemic mortgage fraud

They uncovered inflated incomes and fabricated business activity to support loan applications.

Australia’s financial crimes agency, AUSTRAC’s Fintel Alliance, discovered coordinated mortgage fraud and systemic weaknesses in the country’s lending sector.

This involved inflated incomes, misrepresented employment and fabricated business activity used to support loan applications.

The investigation identified cases where offshore or third-party funds were used to complete property settlements and make mortgage repayments.

The regulator also uncovered falsified or misleading documents and the repeated use of mortgage brokers, accountants and law firms across multiple loan applications.  

AUSTRAC CEO Brendan Thomas said the findings exposed vulnerabilities across the lending sector that could not be addressed by individual institutions acting alone.

“Whilst this project did not identify evidence of widespread money laundering, the weaknesses it exposed could be exploited by criminals seeking to abuse Australia's financial system,” Thomas said.

Fintel Alliance has already provided the names of individuals and entities potentially involved to law enforcement and regulatory agencies.

AUSTRAC is now working with participating banks to identify practical controls that lenders can use to prevent, detect and disrupt mortgage fraud.