Guilty pleas to SFO mortgage fraud charges

Published

Guilty pleas to SFO mortgage fraud charges

Three defendants in a Serious Fraud Office (SFO) prosecution have today pleaded guilty in the Auckland District Court to Crimes Act charges for their roles in a complex series of mortgage frauds.

Mehrdad Ghorbani, Mehran Ghorbani and Mehrzad Ghorbani are three of seven individuals charged in May in relation to a $9.2 million prosecution alleging that a series of false documents or information was supplied to banks by the group.

The three men are related to another defendant who it is alleged conducted a series of property sales and purchases between July 2007 and December 2010 which deceived various banks into approving mortgage applications.

SFO Acting Chief Executive, Simon McArley said, "Economic growth cannot be sustained in a market where there is financial crime. Offending of this type increases the cost of credit for all New Zealanders. SFO needs to maintain a strong response in order to support New Zealand's economic aspirations."

The next appearance for all seven defendants is scheduled for 24 September.

The remaining four defendants Eli Devoy, Nasrin Kardani, Hassan Salarpour and Javad Toraby have entered not guilty pleas to all charges and will be committed for trial.

ENDS

For further information

Andrea Linton
Serious Fraud Office
027 705 4550

Note to editors

Background to investigation

Mehrdad Ghorbani - Male born 3 March 1967 aka Mohammad Ghorbani Sarsangi (pleaded guilty to three charges).
Mehran Ghorbani - Male born 19 April 1978 aka Massoud Ghorbani and Ken Williams (pleaded guilty to two charges).
Mehrzad Ghorbani - Male born 27 January 1972 aka Mehdi Ghorbani (pleaded guilty to three 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