Auckland woman who used 4 names, plus relatives and associates, found guilty of $9.2 mln mortgage fraud involving 11 properties

Auckland woman who used 4 names, plus relatives and associates, found guilty of $9.2 mln mortgage fraud involving 11 properties

The Serious Fraud Office (SFO) has successfully prosecuted an Auckland woman, plus several relatives and associates, over an extensive mortgage fraud scheme.

The victims of the fraud included the ANZ National Bank, New Zealand Home Loans (Kiwibank), BNZ, ASB, ANZ, Westpac, and the Southern Cross Building Society which is now part of Heartland Bank.

This prosecution comes after Simon Lawrence Wood Turnbull was arrested upon arrival at Auckland International Airport and charged in the Auckland District Court in a separate case earlier this month. Another SFO case, the Turnbull one also involves alleged mortgage fraud. False loan applications were allegedly submitted to a fund management company to purchase 19 properties in and around Auckland between September 2006 and August 2007. Turnbull did not enter a plea and will next appear at the Auckland District Court on August 4.

Here's the SFO's full press release on today's 'Devoy' case and here's the 151 page court judgment 

An Auckland woman and a number of her relatives and associates have been found guilty of Crimes Act charges laid by the Serious Fraud Office (SFO) following a 10 week trial in the Auckland District Court. 

The principal defendant in the extensive mortgage fraud scheme is 47 year-old Eli Devoy (AKA Ellie Stone, AKA Eli Ghorbani, AKA Elaheh Ghorbani Sar Sangi). 

Mrs Devoy conducted a series of property sales and purchases between July 2007 and December 2010 which deceived lending institutions into approving mortgage applications that contained false information and supporting documents. 

The six additional defendants who participated in Mrs Devoy’s scheme are Mehrdad Ghorbani (AKA Mohammad Ghorbani Sarsangi), Mehrzad Ghorbani (AKA Mehdi Ghorbani), Hassan Salarpour, Nasrin Kardani, Mehran Ghorbani (AKA Massoud Ghorbani, AKA Ken Williams) and Javad Toraby. 

The fraudulent scheme involved 11 properties in the Auckland area and amounted to approximately $9.2 million. 

SFO Director, Julie Read said, “This is an important case for genuine buyers who are applying for mortgages as the cost of borrowing is increased by this sort of fraudulent conduct. We will continue to work with banks who are targeted with false information. Every lender should be monitoring this risk and people applying for mortgages should be aware that there are significant penalties for those who do not provide truthful information.” 

The defendants will reappear for sentencing on 17 August 2016. 

Background to investigation

Details of the verdicts are as follows:

Eli Devoy (AKA Ellie Stone, AKA Eli Ghorbani, AKA Elaheh Ghorbani Sar Sangi) – guilty of 20 charges, pleaded guilty to four charges prior to trial.

Mehrdad Ghorbani (AKA Mohammad Ghorbani Sarsangi) – guilty of six charges.

Mehrzad Ghorbani (AKA Mehdi Ghorbani) – guilty of four charges, pleaded guilty to one charge prior to trial.

Hassan Salarpour – not guilty.

Nasrin Kardani – guilty of three charges.

Mehran Ghorbani (AKA Massoud Ghorbani, AKA Ken Williams) – pleaded guilty to three charges prior to trial.

Javad Toraby – not guilty. 

Crimes Act offences
Section 228 Dishonestly taking or using document

(1) Every one is liable to imprisonment for a term not exceeding 7 years who, with intent to obtain any property, service, pecuniary advantage, or valuable consideration,—

(a) dishonestly and without claim of right, takes or obtains any document; or

(b) dishonestly and without claim of right, uses or attempts to use any document. 

(2) Every person is liable to imprisonment for a term not exceeding 3 years who, without reasonable excuse, sells, transfers, or otherwise makes available any document knowing that—

(a) the document was, dishonestly and without claim of right, taken, obtained, or used; and

(b) the document was dealt with in the manner specified in paragraph (a) with intent to obtain any property, service, pecuniary advantage, or valuable consideration. 

Section 240 Obtaining by deception or causing loss by deception

(1) Every one is guilty of obtaining by deception or causing loss by deception who, by any deception and without claim of right,—

(a) obtains ownership or possession of, or control over, any property, or any privilege, service, pecuniary advantage, benefit, or valuable consideration, directly or indirectly; or

(b) in incurring any debt or liability, obtains credit; or

(c) induces or causes any other person to deliver over, execute, make, accept, endorse, destroy, or alter any document or thing capable of being used to derive a pecuniary advantage; or

(d) causes loss to any other person. 

(1A) Every person is liable to imprisonment for a term not exceeding 3 years who, without reasonable excuse, sells, transfers, or otherwise makes available any document or thing capable of being used to derive a pecuniary advantage knowing that, by deception and without claim of right, the document or thing was, or was caused to be, delivered, executed, made, accepted, endorsed, or altered. 

(2) In this section, deception means—

(a) a false representation, whether oral, documentary, or by conduct, where the person making the representation intends to deceive any other person and— (i) knows that it is false in a material particular; or (ii) is reckless as to whether it is false in a material particular; or

(b) an omission to disclose a material particular, with intent to deceive any person, in circumstances where there is a duty to disclose it; or

(c) a fraudulent device, trick, or stratagem used with intent to deceive any person. 

Section 257 Using forged documents

(1) Every one is liable to imprisonment for a term not exceeding 10 years who, knowing a document to be forged,— (a) uses the document to obtain any property, privilege, service, pecuniary advantage, benefit, or valuable consideration; or (b) uses, deals with, or acts upon the document as if it were genuine; or (c) causes any other person to use, deal with, or act upon it as if it were genuine. 

(2) For the purposes of this section, a document made or altered outside New Zealand in a manner that would have amounted to forgery if the making or alteration had been done in New Zealand is to be regarded as a forged document. 

Section 66 Parties to offences

(1) Every one is a party to and guilty of an offence who—

(a) actually commits the offence; or

(b) does or omits an act for the purpose of aiding any person to commit the offence; or

(c) abets any person in the commission of the offence; or

(d) incites, counsels, or procures any person to commit the offence. 

(2) Where 2 or more persons form a common intention to prosecute any unlawful purpose, and to assist each other therein, each of them is a party to every offence committed by any one of them in the prosecution of the common purpose if the commission of that offence was known to be a probable consequence of the prosecution of the common purpose. 

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I often wonder how many undiscovered scams are going on in our banking sector and who might be involved. This is an old case that has gone on for some time but there's got to be others waiting to fall apart.

Yes I often think as I walk around Auckland, who can really afford these multi million dollar homes? Given that NZ salaries are so small?

CJ, they probably didn't used to be multi million dollar homes a few years back and now as they get sold they probably go into foreign ownership or are purchased by people trading up or down.
because yeah, your right, working class kiwis can't support or participate in this market.

So if these fraudsters are immigrants will we now send them home like the Ausies are doing with our criminals. I hope so, that's a good way to treat immigrants who abuse there hosts law system.

would love that law here might kill some of the corruption and black market that nobody thinks happens in NZ.
wont happen though left will jump up and down and national don't have the kahonees to bring it in

there is more to this story than has been told, looks like an investment scam, someone paid the price and does not look like it was the banks

http://www.philstockworld.com/2016/06/28/the-crackdown-begins-chinese-ba...

Chinese buyers in vancouver getting loans in China (and defaulting) while buying multi million dollar houses in Vancouver where houses have boomed and the average home is in the millions (sound familiar?)

The IRD test only screens foreign buyers who buy in their own name with their own IRD no, I do not think it accurately captures foreign money buying through companies, trusts or other corporate entities...

Paying nearly $1million in Auckland for a 3bed house when household income is still around $80-$120k pa is pure lunancy and still rated in the top 5 least affodable cities in the developed world

Major issues are
1) Record immigration bringing 800-900 people every month into Auckland when we are only building houses for 300
2) Easy credit from banks lending >5x household income (considered seriously unaffordable by worldwide standard) for an 'affordable' home in Auckland that still costs >$650K
3) Not tracking foreign money affecting local markets closely enough - as evidenced by simple 1960's brick houses on 1100sqm in greenlane selling for $2.2million +, it increases the cost of housing for everyone either directly through higher home prices or indirectly through rates and rents affected by home prices