The fraud racket, which the bank was first alerted to after two whistleblowers lodged complaints via CBA’s “Speak Up” fraud reporting platform, reportedly obtained roughly $1 billion in illegitimate home loans, with AI partially playing a part, according to a report by The Australian Financial Review (AFR).
The two complaints reportedly accused a lender and a mortgage broker within the bank’s private banking division of forging income statements. According to one whistleblower, the two “engaged in document forgery in order to secure home lending approvals”.
After an investigation into its internal processes, CBA reported the alleged incident to the police to determine which loans were involved in the fraud and which involved shell companies.
While neither the police nor CBA disclosed how AI was involved, a spokesperson for NSW Police told Information Age that the State Crime Command’s Financial Crimes Squad will be meeting with CBA representatives this week.
CBA’s investigation began in July last year, but it was ramped up after rival big four bank National Australia Bank (NAB) reportedly faced $150 million worth of fraud.
In the case of NAB, a number of brokers, realtors, and lenders allegedly acquired loans for luxury properties and more using insider knowledge.
While CBA’s first whistleblower reportedly submitted their complaint in February last year, NSW Police were reportedly told of CBA’s loan issues between October and November, according to the AFR report.
The fraud operation, referred to as the Penthouse Syndicate, was allegedly led by former NAB and CBA banker Andrew Hu.
While CBA’s fraud incident has not yet been publicly linked to Penthouse Syndicate, the investigation has been expanded to include both Westpac and ANZ, both of which have reportedly now contacted NSW Police regarding loan-related fraud.
Daniel Croft