NZ Herald
  • Home
  • Latest news
  • Herald NOW
  • Video
  • New Zealand
  • Sport
  • World
  • Business
  • Entertainment
  • Podcasts
  • Quizzes
  • Opinion
  • Lifestyle
  • Travel
  • Viva
  • Weather

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • New Zealand
    • All New Zealand
    • Crime
    • Politics
    • Education
    • Open Justice
    • Scam Update
  • Herald NOW
  • On The Up
  • World
    • All World
    • Australia
    • Asia
    • UK
    • United States
    • Middle East
    • Europe
    • Pacific
  • Business
    • All Business
    • MarketsSharesCurrencyCommoditiesStock TakesCrypto
    • Markets with Madison
    • Media Insider
    • Business analysis
    • Personal financeKiwiSaverInterest ratesTaxInvestment
    • EconomyInflationGDPOfficial cash rateEmployment
    • Small business
    • Business reportsMood of the BoardroomProject AucklandSustainable business and financeCapital markets reportAgribusiness reportInfrastructure reportDynamic business
    • Deloitte Top 200 Awards
    • CompaniesAged CareAgribusinessAirlinesBanking and financeConstructionEnergyFreight and logisticsHealthcareManufacturingMedia and MarketingRetailTelecommunicationsTourism
  • Opinion
    • All Opinion
    • Analysis
    • Editorials
    • Business analysis
    • Premium opinion
    • Letters to the editor
  • Politics
  • Sport
    • All Sport
    • OlympicsParalympics
    • RugbySuper RugbyNPCAll BlacksBlack FernsRugby sevensSchool rugby
    • CricketBlack CapsWhite Ferns
    • Racing
    • NetballSilver Ferns
    • LeagueWarriorsNRL
    • FootballWellington PhoenixAuckland FCAll WhitesFootball FernsEnglish Premier League
    • GolfNZ Open
    • MotorsportFormula 1
    • Boxing
    • UFC
    • BasketballNBABreakersTall BlacksTall Ferns
    • Tennis
    • Cycling
    • Athletics
    • SailingAmerica's CupSailGP
    • Rowing
  • Lifestyle
    • All Lifestyle
    • Viva - Food, fashion & beauty
    • Society Insider
    • Royals
    • Sex & relationships
    • Food & drinkRecipesRecipe collectionsRestaurant reviewsRestaurant bookings
    • Health & wellbeing
    • Fashion & beauty
    • Pets & animals
    • The Selection - Shop the trendsShop fashionShop beautyShop entertainmentShop giftsShop home & living
    • Milford's Investing Place
  • Entertainment
    • All Entertainment
    • TV
    • MoviesMovie reviews
    • MusicMusic reviews
    • BooksBook reviews
    • Culture
    • ReviewsBook reviewsMovie reviewsMusic reviewsRestaurant reviews
  • Travel
    • All Travel
    • News
    • New ZealandNorthlandAucklandWellingtonCanterburyOtago / QueenstownNelson-TasmanBest NZ beaches
    • International travelAustraliaPacific IslandsEuropeUKUSAAfricaAsia
    • Rail holidays
    • Cruise holidays
    • Ski holidays
    • Luxury travel
    • Adventure travel
  • Kāhu Māori news
  • Environment
    • All Environment
    • Our Green Future
  • Talanoa Pacific news
  • Property
    • All Property
    • Property Insider
    • Interest rates tracker
    • Residential property listings
    • Commercial property listings
  • Health
  • Technology
    • All Technology
    • AI
    • Social media
  • Rural
    • All Rural
    • Dairy farming
    • Sheep & beef farming
    • Horticulture
    • Animal health
    • Rural business
    • Rural life
    • Rural technology
    • Opinion
    • Audio & podcasts
  • Weather forecasts
    • All Weather forecasts
    • Kaitaia
    • Whangārei
    • Dargaville
    • Auckland
    • Thames
    • Tauranga
    • Hamilton
    • Whakatāne
    • Rotorua
    • Tokoroa
    • Te Kuiti
    • Taumaranui
    • Taupō
    • Gisborne
    • New Plymouth
    • Napier
    • Hastings
    • Dannevirke
    • Whanganui
    • Palmerston North
    • Levin
    • Paraparaumu
    • Masterton
    • Wellington
    • Motueka
    • Nelson
    • Blenheim
    • Westport
    • Reefton
    • Kaikōura
    • Greymouth
    • Hokitika
    • Christchurch
    • Ashburton
    • Timaru
    • Wānaka
    • Oamaru
    • Queenstown
    • Dunedin
    • Gore
    • Invercargill
  • Meet the journalists
  • Promotions & competitions
  • OneRoof property listings
  • Driven car news

Puzzles & Quizzes

  • Puzzles
    • All Puzzles
    • Sudoku
    • Code Cracker
    • Crosswords
    • Cryptic crossword
    • Wordsearch
  • Quizzes
    • All Quizzes
    • Morning quiz
    • Afternoon quiz
    • Sports quiz

Regions

  • Northland
    • All Northland
    • Far North
    • Kaitaia
    • Kerikeri
    • Kaikohe
    • Bay of Islands
    • Whangarei
    • Dargaville
    • Kaipara
    • Mangawhai
  • Auckland
  • Waikato
    • All Waikato
    • Hamilton
    • Coromandel & Hauraki
    • Matamata & Piako
    • Cambridge
    • Te Awamutu
    • Tokoroa & South Waikato
    • Taupō & Tūrangi
  • Bay of Plenty
    • All Bay of Plenty
    • Katikati
    • Tauranga
    • Mount Maunganui
    • Pāpāmoa
    • Te Puke
    • Whakatāne
  • Rotorua
  • Hawke's Bay
    • All Hawke's Bay
    • Napier
    • Hastings
    • Havelock North
    • Central Hawke's Bay
    • Wairoa
  • Taranaki
    • All Taranaki
    • Stratford
    • New Plymouth
    • Hāwera
  • Manawatū - Whanganui
    • All Manawatū - Whanganui
    • Whanganui
    • Palmerston North
    • Manawatū
    • Tararua
    • Horowhenua
  • Wellington
    • All Wellington
    • Kapiti
    • Wairarapa
    • Upper Hutt
    • Lower Hutt
  • Nelson & Tasman
    • All Nelson & Tasman
    • Motueka
    • Nelson
    • Tasman
  • Marlborough
  • West Coast
  • Canterbury
    • All Canterbury
    • Kaikōura
    • Christchurch
    • Ashburton
    • Timaru
  • Otago
    • All Otago
    • Oamaru
    • Dunedin
    • Balclutha
    • Alexandra
    • Queenstown
    • Wanaka
  • Southland
    • All Southland
    • Invercargill
    • Gore
    • Stewart Island
  • Gisborne

Media

  • Video
    • All Video
    • NZ news video
    • Herald NOW
    • Business news video
    • Politics news video
    • Sport video
    • World news video
    • Lifestyle video
    • Entertainment video
    • Travel video
    • Markets with Madison
    • Kea Kids news
  • Podcasts
    • All Podcasts
    • The Front Page
    • On the Tiles
    • Ask me Anything
    • The Little Things
  • Cartoons
  • Photo galleries
  • Today's Paper - E-editions
  • Photo sales
  • Classifieds

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In
Advertisement
Advertise with NZME.
Home / New Zealand

The $15m property scam

By Cliff Taylor
6 Oct, 2007 04:00 PM5 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  Sign in here

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
Save

    Share this article

Four people are at the centre of an investigation into an elaborate real estate scam, which has fleeced banks of millions of dollars.

Four people are at the centre of an investigation into an elaborate real estate scam, which has fleeced banks of millions of dollars.

KEY POINTS:

Banks and real estate agents have been hit by a $15 million Auckland property valuation scam which insiders say is "becoming an epidemic".

An investigation is believed to be focusing on at least four people suspected of using fraudulent property valuation documents to rip off banks. Banks say
they are working with police.

One source told the Herald on Sunday the scam was thought to involve $15 million in money lost and false valuations. He said there was "no doubt" banks had been duped into handing over loans on fictitious valuations - and possibly even on entirely fictitious properties. "A couple of mortgage brokers and bank managers are looking a bit sad. The banks are deeply in a hole, because they have paid out much more than the value of the property."

One bank is understood to have taken out a "mareva injunction" to freeze the funds of one of the alleged fraudsters, none of whom have been arrested. Real estate experts say the crooks could use the money to renovate houses or buy other properties. They could pocket the money and flee from the debt.

The Herald on Sunday understands that two of the people being investigated are well-known in body-building circles. One source said the scam was known as "The Body Builder Case".

The fraudsters have targeted a South Auckland real estate agency for deals involving multi-million-dollar North Shore properties.

Able Realty First National, based in Papatoetoe, says its sale and purchase agreement forms have been used to present bogus valuations to banks.

A spokesman for Able Realty told the Herald on Sunday he was too scared to give his name. "There's too much money involved... multimillions. That frightens me. I don't want someone coming looking for me with a baseball bat."

The Herald on Sunday revealed last month that fraudsters had tried to scam more than $1 million from banks by submitting bogus valuations on two North Shore properties. The adjoining properties in Mairangi Bay sold last April for $1.7 million. The valuation presented to the banks - which they exposed as fictitious - was for $2.85m.

The Able spokesman said he found out the firm's documents were being used when he was called by Westpac, ASB and BNZ banks, querying the documents.

"It was a surprise. I thought, 'Somebody has done a deal here... There's going to be a big commission'. But the properties were in Mairangi Bay and Castor Bay... for two to three million dollars. You are looking at 10 times what we would sell places for.

"Why would they pick on us?... a small agency in the middle of nowhere?"

He said he had no idea how the fraudsters had got hold of the documents, some of which included his name and that of one of his sales people. He didn't believe anybody in his office had leaked them.

"In the past, we've had people coming in asking to buy forms from here. We've been offered money for them. I said to them, 'go to Whitcoulls'."

He said it was the first time he had heard of such a scam in 20 years.

He said he had contacted the Real Estate Institute which had sent a lawyer to investigate. The institute was satisfied the company was not involved in the scam. "The alleged fraud involved the use of a forged and altered agreements for sale and purchase of the real estate agency without the knowledge of the agent or the real estate agency," it said.

"The institute's preliminary investigations suggest the agreements were used to encourage banks to lend money on properties whose prices had been inflated. REINZ has been assisting the fraud units of two trading banks and will continue to assist them where possible."

It is believed the institute is meeting one of the banks this week to find out how serious the fraud is.

The banks themselves are remaining tight-lipped. Westpac spokesman Craig Dowling confirmed the bank was investigating more than one case of fraud.

"Our fraud unit is working with the police. It has been highlighted to our staff to be particularly vigilant about documentation. "

The ASB referred all inquiries about the case to the police.

The Able Realty spokesman said he believed the banks knew who was responsible. "Somebody went to the bank to apply for a loan. They know. Whether they press charges is another thing. Would they want to sully their reputation just to catch these guys?"

Blue Hancock from the Institute of Valuers believed the cases revealed in Auckland may be just the tip of a valuation fraud iceberg.

"If there is one out there, there are likely to be more."

How the scam works

* Fraudsters obtain sale and purchase agreement documents from a bona fide real estate agency - possibly by theft or by doing a previous property deal with an agency, then blanking out the details, leaving just the letterheads and other useful information.

* Bogus valuations are made on a selected property, inflating the price well beyond its real value. These are used to persuade banks to lend much more money than they would normally.

* It is also believed the scam has been used to obtain money on entirely fictitious properties.

* The money gained from the scam is used to do expensive renovations on properties, increasing their value even further, or to buy new properties. On fictitious properties, the fraudsters simply take the money and run.

Advertisement
Advertise with NZME.
Advertisement
Advertise with NZME.
Save

    Share this article

Latest from New Zealand

New Zealand

The Country: 2025 Young Farmer of the Year, Hugh Jackson

07 Jul 01:39 AM
Crime

Crown says murder victim removed knife from body, stabbed attacker before dying

07 Jul 01:23 AM
New Zealand

Controversial plan for future of Takapuna Golf Course confirmed

07 Jul 12:49 AM

From early mornings to easy living

sponsored
Advertisement
Advertise with NZME.

Latest from New Zealand

The Country: 2025 Young Farmer of the Year, Hugh Jackson

The Country: 2025 Young Farmer of the Year, Hugh Jackson

07 Jul 01:39 AM

Hugh Jackson, Antonia Watson, Stuart Nash, and Phil Duncan.

Crown says murder victim removed knife from body, stabbed attacker before dying

Crown says murder victim removed knife from body, stabbed attacker before dying

07 Jul 01:23 AM
Controversial plan for future of Takapuna Golf Course confirmed

Controversial plan for future of Takapuna Golf Course confirmed

07 Jul 12:49 AM
Covid-19 Inquiry: Kiwis detail crippling losses, lost schooling and farewelling dying family

Covid-19 Inquiry: Kiwis detail crippling losses, lost schooling and farewelling dying family

07 Jul 12:38 AM
Solar bat monitors uncover secrets of Auckland’s night sky
sponsored

Solar bat monitors uncover secrets of Auckland’s night sky

NZ Herald
  • About NZ Herald
  • Meet the journalists
  • Newsletters
  • Classifieds
  • Help & support
  • Contact us
  • House rules
  • Privacy Policy
  • Terms of use
  • Competition terms & conditions
  • Our use of AI
Subscriber Services
  • NZ Herald e-editions
  • Daily puzzles & quizzes
  • Manage your digital subscription
  • Manage your print subscription
  • Subscribe to the NZ Herald newspaper
  • Subscribe to Herald Premium
  • Gift a subscription
  • Subscriber FAQs
  • Subscription terms & conditions
  • Promotions and subscriber benefits
NZME Network
  • The New Zealand Herald
  • The Northland Age
  • The Northern Advocate
  • Waikato Herald
  • Bay of Plenty Times
  • Rotorua Daily Post
  • Hawke's Bay Today
  • Whanganui Chronicle
  • Viva
  • NZ Listener
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven Car Guide
  • iHeart Radio
  • Restaurant Hub
NZME
  • About NZME
  • NZME careers
  • Advertise with NZME
  • Digital self-service advertising
  • Book your classified ad
  • Photo sales
  • NZME Events
  • © Copyright 2025 NZME Publishing Limited
TOP