SFO charges multiple suspects in mortgage fraud

SFO charges multiple suspects in mortgage fraud

The Serious Fraud Office (SFO) has today laid 48 Crimes Act charges against a group of individuals allegedly involved in a complex series of mortgage frauds.

The primary defendant is 44 year-old Eli Devoy (who now goes by the name of Ellie Stone). SFO alleges Mrs Devoy conducted a series of property sales and purchases between July 2007 and December 2010 which deceived various banks into approving mortgage applications. The applications were based on false documents or information supplied to the banks.

Other defendants are six individuals related to, or associated with, Mrs Devoy. These individuals are alleged to have participated in her scheme.

The total value of the alleged fraud under prosecution by SFO amounts to approximately $9.2 million.

Acting Chief Executive for SFO, Simon McArley said, "Financial crime in lending markets increases the cost of credit to all borrowers and has a direct impact on economic growth. SFO is keen to work with lenders to reduce offending in this area and augment the deterrent effects of SFO's prosecution functions with improved lending practices and procedures."

The complaint about Mrs Devoy and her associates was originally received in November 2011 and a Part II investigation commenced in December 2011.

ENDS

For further information

Andrea Linton
Serious Fraud Office
027 705 4550

Note to editors

Background to investigation

• Eli Devoy - Female born 11 December 1968 aka Ellie Stone (26 charges) 
• Mehrdad Ghorbani - Male born 3 March 1967 aka Mohammad Ghorbani Sarsangi (6 charges) 
• Mehran Ghorbani - Male born 19 April 1978 aka Massoud Ghorbani and Ken Williams (3 charges)
• Nasrin Kardani - Female born 17 June 1979 (3 charges) 
• Mehrzad Ghorbani - Male born 27 January 1972 aka Mehdi Ghorbani (5 charges)
• Hassan Salarpour - Male born 25 June 1977 (3 charges) 
• Javad Toraby - Male born 1 May 1971 (2 charges)

Crimes Act offences

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.

(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.

Role of SFO

The Serious Fraud Office (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.

SFO operates three investigative teams:

• Evaluation & Intelligence;
• Financial Markets & Corporate Fraud; and
• Fraud & Corruption.

SFO operates under two sets of investigative powers.

Part I 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 II of the SFO Act provides 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..."

SFO's Annual Report 2012 sets out its achievements for the past year, while the Statement of Intent 2012-2015 sets out the SFO's three year strategic goals and performance standards. Both are available online at: www.sfo.govt.nz(external link)