Report A Fraud

Defrauding banks to obtain lending on property distorts the lending market and increases the risk of the loaned funds being lost. Such fraud affects everyone in the property market as it increases borrowing costs.

In the case of two large-scale mortgage fraud schemes that the SFO recently investigated, rising property prices meant direct losses to the banks were minimal. Had a market correction occurred, a considerable amount of money would likely have been lost.

EMILY PROJECTS LIMITED

Leonard John Ross and Michael James Wehipeihana were each sentenced to more than four years’ imprisonment in September 2018 after being convicted of mortgage fraud. The two men were found guilty by a jury of making false statements and using forged documents to obtain a $41-million credit facility from ANZ to allow their company to develop an apartment block.

The banks were only willing to lend to Emily Projects Ltd if pre-sales of the apartments had already been secured and deposits paid. As the developer could not meet these criteria, Mr Ross and Mr Wehipeihana registered the names and details of people as purchasers without their knowledge and procured false undertakings from a solicitor about deposits being held on trust for the bank’s security.

KANG HUANG AND OTHERS

Gang (Richard) Chen, a defendant in this $54-million-dollar mortgage fraud case, recently had his appeal against his conviction dismissed. The former solicitor also appealed his sentence, in which he challenged the imposition of a minimum period of imprisonment (MPI) and its scale. This resulted in his MPI being quashed. Mr Chen did not challenge his head sentence of six years’ imprisonment. His co-defendant, Zhongliang (Charly) Jiang, appealed his sentence claiming it was manifestly excessive and his MPI. Mr Jiang’s head sentence was upheld but his MPI was quashed.

Mr Chen was convicted last year of obtaining by deception and facilitating payment of bribes to bank employees. As a conveyancing lawyer, Mr Chen was the middleman in the scheme mastermined by the property developer, Kang Huang. The scheme relied on false documents and other information to deceive banks into lending monies at a residential mortgage rate rather than a more expensive commercial rate.