Real estate industry bans agent over scam

Xue Yan Zhu

A real estate agent in a top Auckland firm has been banned from the profession after taking part in a $100,000 mortgage scam against ASB Bank.

Xue Yan Zhu (also known as Tina Zhu), formerly a Barfoot & Thompson agent in Remuera, had her salesperson's certificate cancelled by the Real Estate Agents Licensing Board, which fined her the maximum $750.

The Real Estate Institute yesterday released details of the case as part of its new campaign to convince the public and the Government that it intends to crack down hard on agents who break the law.

The board found Ms Zhu was involved in a loan application on a Meadowbank house for $100,000 more than the property actually sold for.

Ms Zhu was the listing agent for 14 Houghton St in Meadowbank which sold at auction last year at Barfoot's Kitchener St offices for $460,000 to Tim Mycock, who the board said "was known to Ms Zhu and was either at the time or had previously been involved in a romantic relationship with Ms Zhu".

But a false purchase price of $560,000 was entered on the sales agreement and the board found Ms Zhu then applied to ASB's Manukau City branch for a loan at the higher amount.

The $100,000 discrepancy was soon discovered but the board said that if her actions had not been discovered, ASB could have lost a considerable amount of money.

Officials involved in the case likened it to a pyramid scheme and said the larger loan was sought but not intended to be repaid.

"Ms Zhu did not disclose to the vendors that she had paid the deposit or that she had a personal relationship with the purchaser," the board found. "Instead, she encouraged the vendors - whose interests she was employed to protect - to become unwitting participants in a scheme of deception and fraud," it said, noting she was the principal protagonist in that scheme.

Ms Zhu worked at Barfoot between June and November last year. The board said that before she left she admitted she was in a relationship with Mr Mycock and that she had applied for the ASB loan.

The inflated purchase price was submitted so a portion of the money could be paid to Mr Mycock, it found.

Barfoot director Peter Thompson yesterday described Ms Zhu's actions as "despicable" and said the firm had released her immediately on discovering details of the case.

"This is the worst offence we've seen," he said, adding his firm had encouraged the institute to take the case against Ms Zhu.

The former relieving manager at the Remuera office, Paul Dempsey, was also suspended from practising for nine months for not intervening to stop Ms Zhu's actions, although Mr Thompson said yesterday that he hoped Mr Dempsey would return to the firm soon.

He said Mr Dempsey had co-operated fully and had worked at the firm for about 30 years.

The institute is flexing its muscles against its own members by taking disciplinary action against firms and agents it finds have broken the law.

Institute president Murray Cleland said the industry's reputation was being tarnished by a few people. To reverse the public's perception, his organisation was taking a harder line.

More stringent behaviour standards and a harsher penalty regime were being ushered in, he said.

The institute had applied to the board for the suspension or cancellation of a group of agency licences or agents' certificates.

"These are the ultimate punishments available to us because it results in the removal of someone's livelihood," Mr Cleland said of the cases.