A fourth former National Australia Bank employee has been banned from working in financial services for his part in an alleged fraud ring that abused the bank's "introducer" home loan referral program.
Mathew Alwan was permanently banned from engaging in credit activities or providing financial services following an investigation by the Australian Securities and Investments Commission (ASIC).
ASIC is now considering whether to refer a brief for criminal charges to the Commonwealth Director of Public Prosecutions.
NAB believes about 2300 home loans since 2013 may have been submitted with inaccurate customer information and/or documentation such as payslips through its introducer program, where people outside the bank collect a fee for referring a customer.
NAB and other big banks have been rocked by an increase in so-called liar loans in recent times as people go to increasing lengths to secure a home loan amid soaring house prices. Analysts at UBS have estimated that Australia's pool of liar loans could be as big as $500 billion - 30 per cent of the $1.7 trillion home loan market.
A liar loan is a loan that has been issued to a borrower after a bank is supplied with false information about the borrower’s income and employment history. Such an approach means many people who would not otherwise be approved for a loan receive one.
In response to concerns from the royal commission and market watchers, the big four banks have tightened up their lending processes so that more customer information is verified before the bank approves a loan.
NAB reported a cabal of staff to police in 2015 after uncovering the alleged fraud.
Last month, a photocopier technician was convicted but avoided jail time for receiving commissions for referrals of loans that were supported by false loan documentation.
Other NAB staff linked to the scheme have been banned. Earlier this year, two other former NAB staff members, Danny Merheb and Samar Merjan (also known as Samar Awad), were banned permanently from providing financial services, while NAB branch manager Rabih Awad was banned for seven years.
NAB revealed the extent of the alleged fraud ring operating within its greater western Sydney branches at banking royal commission hearings in March. The commission heard that NAB staff had accepted envelopes stuffed with cash for under-the-table payments and commissions linked to the alleged fraud.
The banking royal commission has heard NAB was aware of a "significant breach" months before it was reported to the corporate watchdog.
Thousands of dodgy loan applications were processed by the bank after NAB employees filed fake information about the borrower. The alleged fraud ring claimed commissions on the loans by telling the bank they had been referred by introducers, such as gym instructors and property industry types.
The alleged fraud allowed staff within NAB to "smash" their sales targets for the year.
ASIC said in a statement on Monday that between 2012 and 2015, Mr Alwan told the bank 101 loans were the result of a referral to NAB by an introducer. As a result, $186,725 in commissions were paid to the former NAB branch manager.
ASIC found that 25 of the 101 loan applications contained false information and that Mr Alwan was aware that the information was false.
The allegedly fake introducer was a relative of Mr Alwan's. ASIC said Mr Alwan did not disclose this to NAB and later actively concealed the relationship when NAB quizzed him over it.
"ASIC found that Mr Alwan’s conduct was dishonest, deliberate and repeated," the regulator said in its statement.
Mr Alwan also personally lent money to a NAB staff member who reported to him and to a NAB customer while both were waiting for loan applications to clear. ASIC said this situation created an unacceptable conflict of interest.
Mr Alwan has the right to lodge an application for review of ASIC’s decisions with the Administrative Appeals Tribunal.
NAB, whose shares closed 1.25 per cent lower at $26.87, was contacted for comment.This article was first published by https://www.smh.com.au/