ASIC imposes 10 year ban on broker for loan fraud

ASIC has banned a Sydney finance broker from the credit market for 10 years. 

Mrs Shashi Kanta Prasad was convicted of fabricating loan documents for seven of her clients. She intentionally did so in an effort to secure home loans totalling more than $3.6 million, almost half of which were granted. 

ASIC alleges that Mrs Prasad committed the fraud whilst working at Premium Financial & Retirement Solutions. The company received more than $11,000 in commission as a result of Mrs Prasad’s fraud.

ASIC’s investigation led to four separate charges of fraud against Mrs Prasad. She was charged with making false or misleading statements and using false documents and instruments with the intention to defraud and obtain a financial advantage. 

In total, Mrs Prasad pleaded guilty before the NSW District Court to creating 41 fake documents and instruments and making seven false statements.

Although her offences carried a maximum penalty of five to 10 years in prison, Mrs Prasad’s punishment was to enter into a 18 month good behaviour bond in addition to her 10 year ban from the financial services market. Judge Maiden stated that Mrs Prasad’s co-operation with the ASIC investigation contributed to the leniency in her sentencing.

ASIC has operated as the national regulator of consumer credit since 2010 and in this time has banned 29 individuals or companies, 15 of which were permanent bans. The Deputy Chairman of ASIC, Peter Kell, said: 

 “Removing unscrupulous operators like Ms Prasad from the industry will protect consumers and help ensure borrowers have trust and confidence in the lending sector. ASIC will continue to pursue those who engage in this type of conduct, but it is also our policy to encourage and recognise cooperation from those we investigate. This case illustrates the potential benefits available to those who provide full and timely cooperation to ASIC and plead guilty to their offending at the earliest opportunity.” 

Bransgroves submits that a ban for 10 years sends the wrong message. It tells brokers that this sort of behaviour earns them time in the sin bin but is otherwise acceptable. A broker is in a position of great trust. They know exactly how to manipulate documents and information so that the wrong loans are advanced to people who cannot afford them.

Falsifying documents for loan applications strikes at the heart of the integrity of the mortgage lending industry. Just as solicitors who steal their clients’ money earn lifetime bans, so should brokers who forge documents be banned from the industry for life.

Matthew Bransgrove is author of Avoiding Mortgage Fraud in Australia(2015) LexisNexis.

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