Devoy guilty of conceiving complex mortgage fraud

Devoy guilty of conceiving complex mortgage fraud

An Auckland woman and a number of her relatives and associates have been found guilty of Crimes Act charges laid by the Serious Fraud Office (SFO) following a 10 week trial in the Auckland District Court.

The principal defendant in the extensive mortgage fraud scheme is 47 year-old Eli Devoy (AKA Ellie Stone, AKA Eli Ghorbani, AKA Elaheh Ghorbani Sar Sangi).  

Mrs Devoy conducted a series of property sales and purchases between July 2007 and December 2010 which deceived lending institutions into approving mortgage applications that contained false information and supporting documents.

The six additional defendants who participated in Mrs Devoy's scheme are Mehrdad Ghorbani (AKA Mohammad Ghorbani Sarsangi), Mehrzad Ghorbani (AKA Mehdi Ghorbani), Hassan Salarpour, Nasrin Kardani, Mehran Ghorbani (AKA Massoud Ghorbani, AKA Ken Williams) and Javad Toraby.    

The fraudulent scheme involved 11 properties in the Auckland area and amounted to approximately $9.2 million. 

SFO Director, Julie Read said, "This is an important case for genuine buyers who are applying for mortgages as the cost of borrowing is increased by this sort of fraudulent conduct. We will continue to work with banks who are targeted with false information. Every lender should be monitoring this risk and people applying for mortgages should be aware that there are significant penalties for those who do not provide truthful information." 

The defendants will reappear for sentencing on 17 August 2016.

ENDS

For further media information

Andrea Linton
Serious Fraud Office
027 705 4550

Note to editors

Background to investigation

Details of the verdicts are as follows:

• Eli Devoy (AKA Ellie Stone, AKA Eli Ghorbani, AKA Elaheh Ghorbani Sar Sangi) - guilty of 20 charges, pleaded guilty to four charges prior to trial.
• Mehrdad Ghorbani (AKA Mohammad Ghorbani Sarsangi) - guilty of six charges.
• Mehrzad Ghorbani (AKA Mehdi Ghorbani) - guilty of four charges, pleaded guilty to one charge prior to trial.
• Hassan Salarpour - not guilty.
• Nasrin Kardani - guilty of three charges.
• Mehran Ghorbani (AKA Massoud Ghorbani, AKA Ken Williams) - pleaded guilty to three charges prior to trial.
• Javad Toraby - not guilty.

Crimes Act offences

Section 228 Dishonestly taking or using document
(1) Every one is liable to imprisonment for a term not exceeding 7 years who, with intent to obtain any property, service, pecuniary advantage, or valuable consideration,-
(a) dishonestly and without claim of right, takes or obtains any document; or
(b) dishonestly and without claim of right, uses or attempts to use any document.

(2) Every person is liable to imprisonment for a term not exceeding 3 years who, without reasonable excuse, sells, transfers, or otherwise makes available any document knowing that-
(a) the document was, dishonestly and without claim of right, taken, obtained, or used; and
(b) the document was dealt with in the manner specified in paragraph (a) with intent to obtain any property, service, pecuniary advantage, or valuable consideration.

Section 240 Obtaining by deception or causing loss by deception
(1) Every one is guilty of obtaining by deception or causing loss by deception who, by any deception and without claim of right,-
(a) obtains ownership or possession of, or control over, any property, or any privilege, service, pecuniary advantage, benefit, or valuable consideration, directly or indirectly; or
(b) in incurring any debt or liability, obtains credit; or
(c) induces or causes any other person to deliver over, execute, make, accept, endorse, destroy, or alter any document or thing capable of being used to derive a pecuniary advantage; or
(d) causes loss to any other person.

(1A) Every person is liable to imprisonment for a term not exceeding 3 years who, without reasonable excuse, sells, transfers, or otherwise makes available any document or thing capable of being used to derive a pecuniary advantage knowing that, by deception and without claim of right, the document or thing was, or was caused to be, delivered, executed, made, accepted, endorsed, or altered.

(2) In this section, deception means-
(a) a false representation, whether oral, documentary, or by conduct, where the person making the representation intends to deceive any other person and-
  (i) knows that it is false in a material particular; or
  (ii) is reckless as to whether it is false in a material particular; or
(b) an omission to disclose a material particular, with intent to deceive any person, in circumstances where there is a duty to disclose it; or
(c) a fraudulent device, trick, or stratagem used with intent to deceive any person.

Section 257 Using forged documents
(1) Every one is liable to imprisonment for a term not exceeding 10 years who, knowing a document to be forged,-
(a) uses the document to obtain any property, privilege, service, pecuniary advantage, benefit, or valuable consideration; or
(b) uses, deals with, or acts upon the document as if it were genuine; or
(c) causes any other person to use, deal with, or act upon it as if it were genuine.

(2) For the purposes of this section, a document made or altered outside New Zealand in a manner that would have amounted to forgery if the making or alteration had been done in New Zealand is to be regarded as a forged document.

Section 66 Parties to offences
(1) Every one is a party to and guilty of an offence who-
(a) actually commits the offence; or
(b) does or omits an act for the purpose of aiding any person to commit the offence; or
(c) abets any person in the commission of the offence; or
(d) incites, counsels, or procures any person to commit the offence.

(2) Where 2 or more persons form a common intention to prosecute any unlawful purpose, and to assist each other therein, each of them is a party to every offence committed by any one of them in the prosecution of the common purpose if the commission of that offence was known to be a probable consequence of the prosecution of the common purpose.

About the SFO

The SFO was established in 1990 under the Serious Fraud Office Act in response to the collapse of financial markets in New Zealand at that time.

The SFO's role is the detection, investigation and prosecution of serious or complex financial crime. The SFO's focus is on investigating and prosecuting criminal cases that will have a real effect on:

• business and investor confidence in our financial markets and economy
• public confidence in our justice system and public service
• New Zealand's international business reputation.

The SFO operates three operational teams; the Evaluation and Intelligence team along with two investigative teams.

The SFO operates under two sets of investigative powers.

Part 1 of the SFO Act provides that it may act where the Director "has reason to suspect that an investigation into the affairs of any person may disclose serious or complex fraud."

Part 2 of the SFO Act provides the SFO with more extensive powers where: "...the Director has reasonable grounds to believe that an offence involving serious or complex fraud may have been committed..."

In considering whether a matter involves serious or complex fraud, the Director may, among other things, have regard to:

• the suspected nature and consequences of the fraud and/or;
• the suspected scale of the fraud and/or;
• the legal, factual and evidential complexity of the matter and/or;
• any relevant public interest considerations.

The SFO's Annual Report 2015 sets out its achievements for the past year, while the Statement of Intent 2014-2018 sets out the SFO's strategic goals and performance standards. Both are available online at www.sfo.govt.nz