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Sentence handed down in SFO mortgage fraud prosecution

2 April 2014

Sentence handed down in SFO mortgage fraud prosecution

Ramni Kumar (46) was sentenced in the Auckland District Court today to 12 months’ Home Detention and 250 hours of Community Work for the role she played in a $3.9 million mortgage fraud scheme.

In January this year, Ms Kumar pleaded guilty to 10 charges of dishonestly using a document. The charges related to 10 property transactions undertaken during the second half of 2010. The charges were brought by the Serious Fraud Office (SFO).

Ms Kumar used false documentation to obtain mortgage finance for low income families who would not otherwise have been able to obtain finance. Ms Kumar benefited by arranging for her (and allegedly, her associate’s) contacts to make the initial purchase of the properties and then on-sell them to the mortgage recipients, thus generating a profit.

SFO Director, Julie Read said, “The SFO is pleased to have brought the prosecution of Ms Kumar to a successful conclusion. The manipulation of mortgage lending systems is a serious form of fraud. Banks need to be able to rely on documents submitted in support of mortgage applications to ensure that costs are contained for all borrowers.”

Ms Kumar’s associate Vicki Ravana Letele (33) still faces 11 charges of dishonestly using a document and will go to trial on 18 August.

Background to investigation

Crimes Act Offences

Section 228 Dishonestly taking or using document
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.

About the SFO
The Serious Fraud Office (SFO) was established in 1990 under the Serious Fraud Office Act in response to the collapse of financial markets in New Zealand at that time.

The SFO’s role is the detection, investigation and prosecution of serious or complex financial crime. The SFO’s focus is on investigating and prosecuting criminal cases that will have a real effect on:

• business and investor confidence in our financial markets and economy
• public confidence in our justice system and public service
• New Zealand’s international business reputation.

The SFO operates three investigative teams:
• Evaluation and Intelligence;
• Financial Markets and Corporate Fraud; and
• Fraud and Corruption.

The SFO operates under two sets of investigative powers.

Part I of the SFO Act provides that it may act where the Director “has reason to suspect that an investigation into the affairs of any person may disclose serious or complex fraud.”

Part II of the SFO Act provides the SFO with more extensive powers where: “…the Director has reasonable grounds to believe that an offence involving serious or complex fraud may have been committed…”

The SFO’s Annual Report 2013 sets out its achievements for the past year, while the Statement of Intent 2013-2016 sets out the SFO’s three year strategic goals and performance standards. Both are available online at: www.sfo.govt.nz

ENDS

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