International Fraud News

Six, including solicitors and a surveyor, charged in £50m mortgage fraud

2010-01-05T22:22:57Z

The BBC reports that six people have appeared in court charged with taking part in a £50m mortgage fraud.

The accused, from London, Birmingham and Hertfordshire, include four former solicitors, a surveyor and a property developer. It is alleged several banks and building societies were defrauded in a series of false mortgage applications.

The suspects appeared at Southwark Crown Court charged with conspiracy to obtain a money transfer by deception.

The inquiry by the Serious Fraud Office was launched by West Midlands Police in March 2006 after a complaint from Cheshire Building Society.

The building society said mortgages were secured on six commercial investment properties but not repaid.

All six were released on bail until the next hearing on 1 March.

Those charged are Ian McGarry, 40, from Hertfordshire; Saghir Afzal, 47, Fatema Patwa, 47, Hardeep Sodhi, 33, all Birmingham; Laurence Ferrigan, 48, from Wanstead, east London and Simon Lawrence, 48, from Edgware, north London.

SOCA seizes assets of alleged IRA member - states they came from mortgage and benefit fraud

2009-11-12T23:17:06Z

The following article is reproduced, in its entirety, from the BBC website

The Serious Organised Crime Agency (SOCA) has frozen the assets of a leading republican in South Armagh.

It has been granted a court order to take control of properties and bank accounts belonging to Sean Gerard Hughes of Aghadavoyle Road, Dromintee.

The agency claimed the assets came from laundering the proceeds of mortgage fraud, tax evasion and benefit fraud.

In 2002, Mr Hughes was named in parliament as a member of the IRA’s Army Council, an allegation he denied.

The assets frozen include eight houses in south Armagh, an apartment in south Belfast, the proceeds of the sale of three other houses in south Armagh and a number of bank accounts.

Murder

The agency has also taken control of assets belonging to 10 other people in the south Armagh area, including six members of the extended Hughes family, among them Mr Hughes’ wife Annette.

SOCA also searched a number of properties in the south Armagh area.

On Tuesday, Sinn Fein MP for Newry and Armagh Conor Murphy criticised the operation.

Mr Murphy said: “The raids today on Sean’s home and those of a number of his relatives have caused deep anger in South Armagh.

“There is no justification for the deliberate targeting of Sean and his family today.”

Two years ago, Ulster Unionist peer Lord Laird used parliamentary privilege in the House of Lords to allege that Hughes was one of a number of senior IRA members who authorised the murder of Paul Quinn, who was beaten to death in a remote shed in County Monaghan.

Sinn Fein has said it does not believe there was any republican involvement in that murder.

‘Ruthless’

In 2002, the DUP leader Peter Robinson used parliamentary privilege to tell the House of Commons that Mr Hughes was linked to the 1996 South Quay bombing in Canary Wharf in which two citizens were killed.

Mr Robinson also alleged that Mr Hughes was also responsible for killing of 12 soldiers at Warrenpoint in 1979, a mortar bombing in Newry and the killing of Northern Ireland judge Maurice Gibson and his wife Cecily in 1987.

He said Mr Hughes was the most “ruthless killer and thug” in the ranks of the IRA.

Eight years ago Mr Hughes was convicted of fraudulently claiming income support and fined £1500 after pleading guilty to two charges.

Last year he gave an oration at the funeral of IRA commander Brian Keenan.

FSA bans three at Birmingham based mortgage broker in fraud allegations

2009-11-12T22:14:37Z

The Financial Services Authority (FSA) has banned Birmingham mortgage broker Mohammed Hanif for obtaining authorisation by giving the FSA false information to conceal his involvement in the running of the business.

The authorisation application stated that Hanif’s daughter-in-law, Zaneb Sarfraz, trading as Pak Property Centre, had the necessary competence, capability and business experience to be an authorised person, and that she would be involved in the management and control of Pak Property Centre. In fact, she had no knowledge of the financial services industry, she was not aware of the purpose of the authorisation application submitted in her name, and she had very little involvement in the running of the business. From the outset Hanif was the controlling mind of Pak Property Centre.

Having obtained authorisation on a false basis Hanif, together with the only mortgage adviser at Pak Property Centre, Anmbur Saddiq, submitted a mortgage application for Mrs Sarfraz based on false information about her earnings from the business. Saddiq also made false mortgage applications for himself and for a family member. He has also been banned by the FSA.

Press Release Hanif Notice Saddiq Notice Sarfraz Notice

Margaret Cole, the FSA’s director of enforcement and financial crime, said:

“Maintaining the integrity of the authorisation process is essential if we are to keep dishonest people out of the regulated financial services industry.

“This was a deliberate act of deception and exploitation by Hanif. He deceived the FSA by presenting sham governance arrangements during the authorisation process. In doing this seemingly he had no regard for the impact on the reputation of Mrs Sarfraz. This misconduct, which is very serious in itself, is compounded by the fact that he went on to use the authorised business to commit mortgage fraud.”

The permission of Zaneb Sarfraz trading as Pak Property Centre has also been cancelled.

Suspended Halifax franchise owner granted bail by High Court in N Ireland

2009-11-06T17:08:32Z

The following article is reproduced, in its entirety, from the BBC website

An unnamed firm of Newry solicitors is under investigation in connection with an alleged £7m fraud operation, the High Court has heard.

It was revealed police have established 116 “high risk lending transactions” linked to a former bank manager accused of being at the centre of the scam.

False identities were allegedly set up to make loan and mortgage applications.

Details emerged as bail was granted to financial adviser Damien Mallon, 52, of Drumconwell Road, Armagh. Mr Mallon, who ran Halifax franchises in Dungannon, County Tyrone, and Keady, County Armagh, was said to have made admissions about his role.

He is accused of two counts of fraud by abuse of position, six charges of converting criminal property, two counts of entering into an arrangement to acquire criminal property, and conspiracy to defraud on dates between 2002 and 2009.

He was arrested along with Peter Creegan, a former branch manager of the First Trust in Newry, after police received complaints from the bank and a third party.

Suspended

Mr Creegan, 43, from Tullydonnell Road, Silverbridge, County Armagh, remains in custody charged with multiple fraud and money laundering offences.

During Mr Mallon’s application for bail, a Crown lawyer claimed the operation involved authorising financial loans to people and businesses, sometimes with false names.

“At this stage police inquiries reveal there are some 116 high risk lending transactions authorised or associated with Mr Creegan. Of these six of them expose the bank to an estimated amount of £3.4m sterling and 3.9m euros,” she said.

The court heard that Mr Mallon, who has been suspended by the Financial Services Authority, admitted participation by making false applications, with one sum of £300,000 involved.

Although much of the multi-million pound fraud has been traced back to property, a considerable amount remains unaccounted for, it was claimed.

Defence counsel said Mr Mallon made confessions during 18 police interviews over the last week, but stressed his involvement with Mr Creegan was limited.

He told the court his client received a 2.5% cut on the £300,000, obtained from the First Trust Bank.

The barrister’s submissions that Mallon was only a “small fish” in the alleged scam were accepted by the prosecution.

Only five or six of 4,500 Halifax accounts he has opened in the last number of years are under investigation, the court heard.

Defence counsel also disclosed: “A prominent firm of solicitors in the Newry area appears to be the subject of a number of lines of questioning in this matter and appears to be on the police radar in relation to this matter.”

No names were given, but he added: “Mr Mallon would instruct he has never had any involvement with this firm of solicitors. Police investigations are focusing very much on transactions that were passed through this firm of solicitors.”

Mr Mallon’s wife Jennifer and some of their five children were in court as Mr Daly spoke of the huge consequences of his arrest on them and his business.

“He has been suspended by the FSA, he has been suspended by the Halifax and he can have no dealing with customers,” the barrister said.

Granting bail, judge Mr Justice Weatherup said Mallon appeared to be on the periphery of the main players.

Mallon was ordered to put up £5,000, lodge a £15,000 cash surety and surrender his passport before he can be released.

He was also curfewed, directed to have no contact with Mr Creegan and banned from operating any bank accounts other than in the family name.

9 members of drug gang sentenced, many for mortgage fraud

2009-10-26T15:24:55Z

In the following press release Kent Police (UK) announced that an Aylesford man was sentenced to nine years in jail at Maidstone Crown Court on Thursday 15 October for drugs related offences, money laundering and mortgage fraud.

Nicholas John Yates, a 37 year old engineer from Salisbury Road, Aylesford, Maidstone was found guilty on 12 August this year of conspiring to supply 22 kilos of amphetamine sulphate worth £1 million between 14 November 2007 and 11 November 2008. In addition, he pleaded guilty to two counts of money laundering, totalling £127,780, and a mortgage fraud valued at £807,500.

Yates was the Kent ringleader of a large, very sophisticated, international organised crime gang that has been dismantled by Kent Police.

Listen online

Kent Police Detective Superintendent Tim Smith talks about the investigation and the results.

Picture Gallery

Family members punished

Most of the 18 family members and criminal associates, from Kent and Teesside, have already been punished for a range of serious drug offences, money laundering and mortgage fraud. But like Yates, three others were sentenced on Thursday 15 October.

Three others sentenced

The three also sentenced were:

Richard Neil Wheeler, 43, builder, Calcroft Avenue, Ingress Park, Greenhithe who pleaded guilty to four counts of money laundering the proceeds of crime; three counts of possession with intent to supply more than £1 million worth of cocaine, ecstasy and amphetamine; the importation of 2.3 tonnes of cannabis resin worth £2.5 million and conspiracy to supply 22 kilos of amphetamine sulphate worth £1 million. He was sentenced to nine years four months in jail.
Neil William Hoban (Teesside ringleader), 40, shop manager, Tanwell Close, Stockton, Teesside who pleaded guilty to conspiracy to supply 22 kilos of amphetamine sulphate worth £1 million. He was sentenced to five years seven months in jail.
Martin Paul Lewis, 28, unemployed, Braid Crescent, Billingham, Teesside who pleaded guilty to conspiracy to supply 22 kilos of amphetamine sulphate worth £1 million. He was sentenced to 20 months in jail.

Five people sentenced

Those who were previously sentenced at Maidstone Crown Court include:

Martin Winter, 46, driver, Reddy Road, Erith pleaded guilty of conspiracy to supply ecstasy, cocaine and amphetamine sulphate. He was sentenced to five years in jail.
Mizelli Friend (girlfriend of Yates), 29, unemployed, Queen’s Road, Gravesend pleaded guilty to a mortgage fraud valued at more than £142,000. She was sentenced to a year in jail suspended for two years.
Helen Louise Friend (sister of Mizelli), 24, sales rep, Queen’s Road, Gravesend pleaded guilty to a mortgage fraud valued at £152,000. She was sentenced to a year in jail suspended for two years.
Delvinna Sylvester (partner of Richard Wheeler), 38, unemployed, Calcroft Avenue, Ingress Park, Greenhithe pleaded guilty to a mortgage fraud valued at £200,000. She was sentenced to a 12 months supervision order and 150 hours of community service.
Dean Austin, 32, plumber, Olivers Mill, New Ash Green, pleaded guilty to possession of cocaine. He was sentenced to a two year conditional discharge at Dartford magistrates’ court.

Multi-agency investigation

Kent Police led the multi agency investigation, which began in November 2007, into the gang members who smuggled drugs into Kent from Spain and other European countries via France. A complex web of family members and criminal associates in both Kent and Teesside underpinned the large-scale drugs enterprise that also included money laundering and mortgage fraud.

Since the investigation began 31 men and women have been charged - nearly half of them from Kent - and this sentencing brings the trial phase of the investigation to an end.

Sixteen people have been sentenced to a total of 70 years and one month in jail.

Head of Major Crime at Kent Police, Detective Superintendent Tim Smith, said: ‘It’s hugely rewarding to see these tangible results after such a long, complicated and multi-faceted investigation.

‘We’ve taken out the ringleaders of a very organised and dangerous crime gang whose members stopped at nothing to fuel their greed for money and the high life through the illegal drugs trade.

‘But they seriously underestimated the determination and resources of Kent Police and the other law enforcement agencies that worked with us both in the UK and overseas.

‘Our work isn’t over because we’re pursuing the gang’s money and assets but the sentences mean we’ve broken the back of what has been one of the biggest operations ever led by Kent Police.

‘But the most satisfying thing of all is that we have saved some people from certain death and enhanced the quality of life of others by taking these gang members out of the community and allowing the criminal justice system to punish them.’

Items seized

The investigation peaked last November when 270 enforcement officers and detectives from Kent, Teesside and London arrested 31 people and searched 50 residential, commercial and rural locations. Among the many items they seized were:

£262,000.00 in cash
six kilos of almost pure cocaine (£500,000
three tonnes of cannabis (£2.5 million)
22 kilos of amphetamine sulphate (£1 million)
4,130 ecstasy tablets (£20,000)
one kilo of crystal MDMA (£25,000)
two handguns (one linked to an attempted murder)

Head of Crime Operations for Cleveland Police, Detective Chief Superintendent Mark Braithwaite, said: ‘Organised drug cartels wreak massive harm on vulnerable individuals, on families and on communities both in Teesside and elsewhere.

‘The higher level players are greedy, very often violent and devoid of social conscience. All they are bothered about is making a fast buck on the back of other people’s misery.

‘There are some who argue that enforcement interventions are not the answer. To those people I say go and live next door to a dealer and see what impact it has on your quality of life.

‘There is a responsibility on all agencies to tackle this complex problem through education, treatment and support but there is also a public expectation that law enforcement should do just that - disrupt supply networks, enforce the law and protect communities.

Kent Police is now actively pursuing the gang’s money and assets through the legal system so that the proceeds of their criminal activity can be ploughed back into fighting crime. So far £2.375 million has been confiscated.

FSA bans another East London mortgage broker

2009-10-21T15:27:41Z

The Financial Services Authority (FSA) has banned Barking-based mortgage broker, Tomilola Omolola Ogunmoye for knowingly submitting false and misleading information about her income to four lenders to obtain mortgages for herself.

As well as submitting fraudulent mortgage applications, Ogunmoye failed to co-operate with the FSA by refusing to provide a sample of mortgage client files or deal with the investigators. Ogunmoye operated as a mortgage adviser in Barking, East London and was a director of various companies, such as Excel Mortgage Limited, Excel Property Limited and Array Mortgage Solution Limited.

Press Release Final Notice

Margaret Cole, FSA director of enforcement and financial crime, said:

“With help from some lenders, we are continuing to focus our enforcement and intelligence activity on mortgage fraud hot spots around the country, including East London.

“Our work on mortgage fraud continues as a priority in our campaign against financial crime. We have banned nearly 70 mortgage brokers over the last three years and we will continue to name and shame mortgage brokers that knowingly giving false and misleading information to prospective lenders.”

FSA sets out proposals for wide ranging change in mortgage market

2009-10-20T15:20:52Z

The Financial Services Authority (FSA) today sets out proposals for the major reforms required in the UK mortgage market to ensure that it works better for consumers and is sustainable for all market participants.

The proposals, published in the mortgage market review discussion paper, reflect the FSA’s changed approach to a more intrusive and interventionist style of regulation.

The review’s key features are:

Imposing affordability tests for all mortgages and making lenders ultimately responsible for assessing a consumer’s ability to pay; [It proposes that in each case a lender should assess the consumer’s ability to repay, i.e. calculate the free disposable income a consumer has to pay for the mortgage].
Banning ‘self-cert’ mortgages through required verification of borrowers’ income; [it proposes requiring verification of income for all mortgage applications]
Banning the sale of products which contain certain ‘toxic combinations’ of characteristics that put borrowers at risk; [It discusses whether a type of product regulation likely to be more effective in protecting consumers would be to prohibit loans to borrowers that exhibit certain multiple high-risk characteristics, such as prohibiting loans to credit-impaired borrowers that are also at high loan-to-income].
Banning arrears charges when a borrower is already repaying and ensuring firms do not profit from people in arrears;
Requiring all mortgage advisers to be personally accountable to the FSA;
Calling for the FSA’s scope to cover buy-to-let and all lending secured on a home.

Press Release Discussion Paper (2.8mb)

Jon Pain, FSA managing director of supervision, said:

“The mortgage market has seen extraordinary upheaval over the last 18 months and whilst it has worked well for the vast majority of borrowers, some have suffered great financial distress. We recognise that we need to bring about a step change in regulation and we need to act now to address the issues we have identified.

“The paper sets out the main findings of the FSA’s comprehensive analysis of the mortgage market. It clearly shows a rapid explosion in mortgage products; the emergence of high risk lending strategies which typically focused on higher risk borrowers; relaxed credit standards; and a mutual assumption by too many borrowers and lenders that the good times could not end.

“The FSA needs to ensure that firms only lend to people who can afford to pay the money back. The reforms that we have announced today will ensure that the mortgage market works better for consumers and that it is sustainable for firms.”

The review has also identified that the irresponsible lending practices seen in the market until recently will be curtailed by the FSA’s existing work on capital and liquidity.

The proposals are designed to tackle the problems identified while maintaining a vibrant and sustainable market. But the FSA has not ruled out further change if the initial proposals do not have sufficient effect, including caps on loan-to-value, loan-to-income or debt-to-income.

The discussion paper is out for discussion until 30 January 2010 and the FSA will be actively seeking views from consumer groups and industry. A feedback statement will be published in March. Implementation will be phased, with the focus on speed for areas of high detriment, such as arrears.

Silvertown mortgage broker banned for making fraudulent applications

2009-10-20T15:17:03Z

The Financial Services Authority (FSA) has banned East London based mortgage broker, Ayodele Olubunmi Thomas, for knowingly submitting false and misleading information about his income to obtain mortgages and loan advances. Her Majesty’s Revenue and Custom’s (HMRC) records of Thomas’ earnings, as declared for tax purposes, were substantially less than the amounts that he declared to lenders.

Press Release Final Notice

Despite claiming his income was genuine, with some coming from overseas investments and schemes, Thomas failed to satisfy the FSA that the evidence of this additional income was reliable. In any case, when he applied for the various loans, he did not provide the lenders with any indication that his income came from anywhere other than his mortgage business and from within the UK.

Combined with a fraudulent mortgage application for his wife and two joint mortgage applications where the incomes declared to lenders were also shown to be misleading, the FSA concluded that Thomas lacks honesty and integrity and is not fit to work in regulated financial services.

Margaret Cole, FSA director of enforcement and financial crime, said:

“The FSA is determined to remove from the sector any approved persons found to be making fraudulent applications.

“Thomas’s representations to the FSA about his income sources were at best unreliable. In his loan applications, he decided to rely on irregular and unaccountable income from overseas. It was plain to see that he had misled the lenders about the sources and amount of his income.

“Consequently, he has lost his individual approval and has been banned from performing functions in authorised firms. These sanctions are consistent with our ongoing drive to crack down on financial crime and instil confidence in the mortgage market.”

Thomas was an approved person and the director of Atom Associates, a mortgage intermediary based in Silvertown, East London. Thomas also conducted business as Divine Mortgages, a trading name for Atom.

Sydney mortgage broker charged again with further $1.1 million fraud

2009-10-13T15:33:52Z

The following report was taken from News.com.au

A mortgage broker already accused of fraud involving up to $5 million has been charged with new offences involving a further $1.1 million. In Sydney’s Central Local Court on Tuesday, Samer Hraiki, 33, faced five new charges of obtaining money by deception.

In July, his lawyer told the court Mr Hraiki had encountered financial difficulties while developing a property in Kings Cross that would have realised tens of millions of dollars in profit.

At the time, Magistrate Allan Moore commented that at one point there had been $5 million worth of dishonest activities.

The new charges cover dates between September 2006 and April this year.

Mr Hraiki is accused of obtaining $39,999, $41,500 and $550,000 from different people by deception. He allegedly used false documents to entice the victims into thinking they were engaging in a legitimate investment.

He also is charged with using false documents to obtain a $300,000 mortgage on a Lake Illawarra South property and a $722,000 second mortgage on a South West Rocks property.

Bail was again formally refused and his case adjourned to the same court on December 8.

Four men arrested in City of London police mortgage fraud investigation

2009-09-25T15:25:38Z

In the following press release the City of London Police announced:

“Forty City of London Police officers have been involved in an operation across South East England and have arrested four men in connection with a £9 million mortgage fraud against a major insurance company.

In co-ordinated searches early this morning six teams entered four houses, the business unit of a gaming company and a solicitor’s office in North West London, Surrey, Hertfordshire, Milton Keynes and Northampton.

Officers seized a host of documents and arrested a 56-year-old and a 31-year-old in Watford, a 46-year-old in Wembley and a 39-year-old in Surrey.

They were also in position at the business unit to meet employees of the gaming company as they arrived for work and inform them about the police investigation.

Detective Chief Superintendent Steve Head:

“The work this morning was a significant step forward in this complex investigation. The size of the police operation was evidence of the scale of this suspected fraud.”

The Economic Crime Directorate has seen a sharp increase in reported cases of mortgage fraud in the past eighteen months.

Typically a criminal gang, often including surveyors and solicitors, use false valuations and tenancy agreements to persuade lenders to provide loans far exceeding the worth of their properties.

Ch Supt Head added:

“It is not just the lenders that are being hit by the fraudsters. Individuals are losing millions and millions of pounds through a range of mortgage frauds, with much of this money being paid into the coffers of criminal networks.

“We have a number of significant investigations ongoing and as lenders and borrowers continue to scrutinise their finances I anticipate many more cases being referred to us in the near future.

“I would ask anyone who has fallen victim to mortgage fraud to contact CoLP. The more we know the more difficult we can make it for those committing this highly damaging crime.”

The Solicitors Regulation Authority (SRA) has expressed their support for the actions being taken by CoLP to combat mortgage fraud.

A spokesperson said: “The SRA works closely with police and other law enforcement organisations to tackle mortgage fraud.

Since the start of 2009 the SRA has stepped up its work in relation to mortgage fraud, both through advice and warnings to the profession, and by increasing its detection and investigation resources to prevent, deter and tackle fraud.”