| | |
Homepage | login or create an account

Man guilty of elaborate mortgage deception

Read More:
Fuseworks Media
Fuseworks Media

Auckland, Nov 11 NZPA - A man has been found guilty of conducting an elaborate mortgage fraud scheme in which he paid other people to borrow millions of dollars for mortgages for him.

Raghu Aryasomayajula, 38, was convicted in the Auckland District Court today on two counts of using a document to obtain pecuniary advantage.

The charges, which were brought by the Serious Fraud Office, concerned a series of mortgage frauds totalling about $13 million.

Aryasomayajula, along with accomplice Phillip Cavanagh, solicited "trustees" to buy properties capable of being sub-divided so that he could on-sell them.

The trustees would purport to buy the properties from the Aryasomayajula and Cavanagh and also obtain finance in their own names.

The arrangement was that the trustees would hold the properties until they were sold while their financial commitments to the lenders, which included Bank of New Zealand and Westpac Bank, would be taken care of by Aryasomayajula and Cavanagh.

It was never disclosed in the mortgage application forms that the trustees were not really the purchasers, and the properties' prices were greatly exaggerated.

The banks were also given completely untruthful information about the trustees' incomes and assets.

For example, in May 2007, Aryasomayajula and Cavanagh's company Allwin Holdings sold one of their properties to a trustee for $960,000 and they paid the trustee a $20,000 fee in return.

However, Allwin Holdings had purchased the same property six months earlier for $740,000.

They did similar things with nine other properties in Auckland.

In his conclusion, Judge Roy Wade said he was completely satisfied that Aryasomayajula knew the banks were being provided with grossly erroneous information.

It was not clear to what extent any individual trustee knew about the deception, he said.

Aryasomayajula was been remanded in custody and is scheduled to be sentenced on February 3.

Cavanagh pleaded guilty to the same charges in October last year and was sentenced to two years' five months' imprisonment.

About : money

Find the latest money news and 'how to' guides on Guide2Money.

Ask our researchers your personal finance questions.

Your Questions. Independent Answers.