KEY POINTS:
The Serious Fraud Office is investigating what could be one of New Zealand's biggest mortgage scams, involving bank employees and lawyers in deals worth up to $22 million.
The suspected fraud involves up to 50 transactions based on apparently false home valuations that added $300,000 to $600,000 per
property.
The case is the latest in a series of alleged property frauds the SFO is prosecuting or has under investigation.
SFO director Grant Liddell says the alleged frauds are worth "tens of millions of dollars".
Experts warned late last year that scams uncovered at that stage could be "just the tip of the iceberg".
Liddell says fraudsters have taken advantage of a booming property market to cover their tracks but the present slump was starting to make people "squeal".
The SFO has several cases under investigation or making their way through the courts. One of the key features emerging is the involvement of real estate industry "insiders".
In the latest case, dishonest lawyers and bank employees are believed to be involved. A separate, ongoing court case over a $7 million home-loan scam in South Auckland similarly involves insiders. Real estate agent Ranjeet Prasad has pleaded guilty to 23 fraud charges, and former Westpac mortgage manager Amar Singh has admitted two charges. Both are yet to be sentenced.
Westpac said about Singh: "It was Westpac which initiated the complaint to the Serious Fraud Office following an internal investigation. As a result of that internal investigation, Mr Singh was dismissed from the bank some time ago. We can't comment any further until the matter is fully dealt with through the courts."
Depositions in another property fraud case will be heard in the Auckland District Court in August, and another mortgage fraud case is scheduled for trial at the Manukau District Court in February.
Auckland property developer Dan Ping Wu was sentenced in December to 12 months home detention after conning more than $10 million from major banks in a home-loan scam that ran for four years.
The SFO appealed against Wu's sentence, but without success.
Last year the president of the Institute of Valuers, Blue Hancock, blew the whistle on a multimillion-dollar property valuation scam in Auckland, and subsequent investigations by the Herald on Sunday uncovered several others.
The methods used by Wu and Prasad and Singh were different, though both scams relied on fraudulent practices to convince banks to lend more money than they normally would have.
Wu used more than 150 bank accounts and credit cards and created fictitious documents on his home computer to convince banks to lend him millions of dollars on properties, which he then sold at a profit.
In the $7 million South Auckland case, the SFO alleges a number of people worked together using loan applications and supporting documents dishonestly to get mortgages from banks. According to the SFO, Ranjeet Prasad told the buyers he "knew a man at the bank" who would approve the loans.
Liddell said the $22 million case would require three months work before he could decide whether charges should be laid.
