Mortgage fraud guilty verdicts

Mortgage fraud guilty verdicts

The jury in the Serious Fraud Office (SFO) trial of Vicki Ravana Letele yesterday reached verdicts in the Auckland District Court.

Ms Letele faced 11 charges under Section 228 of the Crimes Act for dishonestly using a document. The charges related to 11 property transactions undertaken during the second half of 2010, the total value of the fraud being $3.9 million.

Ms Letele was found guilty on 10 charges and not guilty on one charge.

The SFO prosecution established that Ms Letele conspired with an associate, Ramni Kumar, to obtain mortgage finance for low income families who would not otherwise have been able to obtain finance, by using false documentation. This mortgage finance was used to purchases properties from interests related to Ms Letele and Ms Kumar, generating a profit for them.

SFO Director, Julie Read said, "Vulnerable investors are often targeted by those who are aware of their inexperience in dealing with significant financial transactions. It is important wherever possible to obtain advice from reputable advisers and institutions. The SFO hopes that this verdict demonstrates that nonetheless serious financial crime in the lending environment will be discovered and prosecuted."

Ms Kumar entered a guilty plea in January and was sentenced to 12 months on home detention and 250 hours of community work.

Ms Letele has been remanded on bail and will be sentenced on 3 November.

ENDS

For further information

Andrea Linton
Serious Fraud Office
027 705 4550

Note to editors

Background to investigation

Vicky Ravana Letele was the sole director/shareholder of Focus Property Investment Ltd (Focus). On 9 July 2011 she resigned her directorship and the company was placed into liquidation on the 31 January 2012.

Focus was established to broker the selling and arranging of mortgages for first home buyers on low income.

The alleged offending for the charge Ms Letele was found not guilty totaled approximately $308,000.

Crimes Act offences

Section 228 Dishonestly taking or using document
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.

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 2014 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