A group of former Auckland Barfoot & Thompson agents who engaged in mortgage fraud have been banned from the real estate business for life.
The Real Estate Agents Licensing Board has cancelled the sales certificates of three agents who have subsequently been granted name suppression.
Barfoot director Peter Thompson
said he did not know of another agent who had suffered such a severe penalty.
"These people won't ever be able to apply for a real estate salesperson's certificate again. They are permanently banned," Mr Thompson said.
In October, the authority ruled the three were all unfit to be agents but reserved its penalty.
Yesterday, Real Estate Institute president Mike Elford announced the decision, saying he welcomed it and that having the certificates cancelled was the worst thing that could happen to agents.
In August, Steve Haszard of the Crown Law Office, acting for the institute, told the board how the agents had capitalised on the then-rising Auckland housing market by using a "pass-the-parcel" scam which made $330,000 for them as they bought and sold properties they were meant to be selling as agents.
They bought the properties or sold them to friends at inflated prices. That technique tricked banks into granting more mortgage finance than the properties were worth.
The agents then on-sold the houses for huge gains, pocketing the profits.
Bank of New Zealand, ANZ and Westpac were all named as easy and sometimes "familiar" sources of finance for the agents and associates.
When the case was heard, only Niall appeared before the board in Newmarket.
Mr Thompson said yesterday that Niall was "nowhere near as involved as the other two".
The Real Estate Agents Act due to come into effect on November 17 next year will impose much tougher financial penalties on agents and give consumers more protection.
Mr Elford said the institute was pleased its members identified and reported the former Barfoot agents.
"That is the only way we are able to stamp out the few rogues that bring the profession into disrepute.
"It was the co-operation and support we were afforded by Barfoot & Thompson and all of the other witnesses that enabled us to deal with this matter."
