KEY POINTS:
Details of an alleged home loan scam targeting unsophisticated buyers in South Auckland have emerged at a depositions hearing in Manukau District Court.
Senior crown prosecutor Christine Gordon, representing the Serious Fraud Office, told Judge Ajit Singh that those involved included a "self-styled" property developer, Stephen D'Villiers, real estate agent Ranjeet Prasad, and former Westpac mortgage manager Amar Singh.
Miss Gordon said that there were 27 dishonest home loan applications for more than $7 million.
Singh has pleaded guilty to two representative charges of fraud and is due to be sentenced next month.
D'Villiers faces 20 charges, his partner Boni Roy (formerly Bornali Karmakar) faces three counts, while his niece Jenifer Lacurtz (formerly Ranjini Naidu) is accused of 14 offences
Prasad faces 23 counts.
A fifth accused, Sattar Mohammed, has left the country.
Miss Gordon told the judge that in one deal, D'Villiers pocketed over $67,000 and Prasad received a $10,000 commission.
By contrast, Miss Gordon said, the purchaser "received a sub-standard property in need of substantial repairs and a mortgage he couldn't afford".
Over eight months D'Villiers allegedly obtained $396,000, Roy $82,000, Lacurtz $105,000, Mohammed $327,000 and Prasad $44,000 as well as his real estate commissions.
The SFO alleges that the group was working together, submitting banks and other lending institutions fraudulent loan applications with dishonest supporting documents to obtain finance for properties in South Auckland.
Typically properties would be bought by D'Villiers and then on-sold at a substantial profit the same day to buyers arranged by Prasad.
In one case D'Villiers bought a house for $255,000 which was sold the same day for $340,000 though the bank was told that the sale price was $378,000 and that the purchaser had put in a deposit of $38,000.
In fact the purchaser had only a couple of hundred dollars to contribute.
Miss Gordon said the scheme could only succeed if the buyers were able to obtain loans "and that was done by fraud".
The banks believed they were funding around 80 per cent of the purchase price, when in fact they were financing 100 per cent.
Miss Gordon said that many of the loan applications were submitted to Westpac and were processed by Singh, a mortgage manager, who was introduced to the scheme by Prasad.
"He became aware that the applications contained false and forged documentation," Miss Gordon said.
Prasad allegedly told buyers he "knew a man at the bank who could approve loans".
"Many buyers had no significant savings and could not afford the standard deposit required by mortgage providers. Mr Prasad told the buyers that this did not matter and that he would take care of everything," Miss Gordon said.
When the purchaser of the $340,000 house queried why the sale and purchase agreement showed the purchase price as $378,000 Mr Prasad allegedly told him not to worry - he would only have to pay the $340,000.
- NZPA
