ASIC targets accountants in fraud investigation

Fintel Alliance’s Operation Claw also uncovered offshore or third-party funds were used to complete settlements and make mortgage repayments, which demonstrated how false income streams and funding arrangements can facilitate access to the Australian market.

“The scale of this activity should be a wake-up call for every lender,” AUSTRAC’s CEO Brendan Thomas said.

“The same warning signs were found across banks that cover the vast majority of Australia’s mortgage market.

“While 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.”

Mortgage lenders have been urged to examine their books for signs of fraud, implement strong controls, and report suspicious activity.

Given recovering money becomes “significantly harder” once the loan is established, and the funds have been distributed, Thomas told these lenders to take immediate steps before it reaches the approval stages.

He added it was not something an institution “can afford to ignore”.

In addition to banks, ASIC, the ATO, and NSW Police, AUSTRAC has worked closely with the NSW Crime Commission, Australian Criminal Intelligence Commission, and APRA.

Bringing these forces together allows patterns to become “clear”, Thomas said.

“Mortgage fraud succeeds when those fragments remain disconnected,” he said.

“Public-private information sharing allows government, banks and law enforcement to identify threats earlier and take co-ordinated action.”