World Money Laundering Report - back issues 1999 - 2016.
A former "Home Finance Manager" (mortgage salesman) with a bank was jailed for three years after pleading guilty to abusing his position to make a dishonest gain for himself and others. He submitted for approval fraudulent applications, knowing they were untrue, for applicants to borrow money that they would then "invest" in a developer with which he had a connection.
The case arose out of an investigation by Australia's Securities and Investments Commission which found
between July 2008 and June 2010, Mr David St Pierre.:
* submitted loan applications to Westpac for approval when he knew they contained false information and were supported by false documents
* failed to prepare an authority that accurately identified the payee of a cheque with the result that a customer cheque for AUD215,000 was paid into the personal trading account of a non-office holder of CGIC, and
* enabled and encouraged customers to borrow funds from Westpac and earned a financial advantage in the form of cash bonuses on the loans, in addition to his base salary, despite knowing that they were either elderly, a pensioner, a carer or suffering from a disability, and would not be able to repay the loan if the scheme failed.
St Pierre obtained over AUD2.5 million for Westpac customers, that they (mostly) invested with a now failed Tasmanian property development scheme, operated by Capital Growth International Club Pty Ltd (CGIC) and All About Property Developments Pty Ltd (AAPD)
In delivering the sentence, Judge Kent QC remarked that Mr St Pierre's behaviour was described accurately in his opinion by the Crown as calculated, elaborate, determined and not a fleeting mistake.
ASIC's investigation found that the customers to whom the loan applications related were elderly and vulnerable and with limited financial means, yet in spite of this, Mr St Pierre encouraged them to borrow against their homes, some of which were unencumbered, to invest with CGIC and AAPD, which promised returns of 12–20% per annum.
The customers received monthly interest payments from CGIC and AAPD after they invested, however the interest payments stopped shortly before a liquidator was appointed on 28 February 2011. This left customers without sufficient income with which to repay their loans to Westpac.
St. Pierre was banned from the financial services industry in 2014. He was sentenced to three years in jail to be released after six months on a "recognisance order." This is a little like a combination of probation and bail. His recognisance is AUD1,000.
This is an amazing example of someone who specifically and callously set out to obtain funds by way of fraud but committed the fraud against several disparate parties so that no one had the whole picture.
The penalty is appallingly low. This was a systematic attack on the elderly and vulnerable. That they have not suffered substantial losses is due to the fact that his former employer, Westpac, has compensated his victims.
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