Westpac CEO Brian Hartzer has been asked to explain why one of the bank’s former employees was recently jailed for defrauding mortgage customers.
During his appearance in Canberra yesterday before the House of Representatives economics standing committee, Mr Hartzer was asked to explain the background of David St Pierre, a former Westpac home finance manager who was last month sentenced to three years' jail after pleading guilty to dishonest misuse of his position.
“David St Pierre is in jail and we believe that’s where he belongs,” Mr Hartzer said.
“He committed very terrible fraud against a number of customers, which involved falsifying documents and applying for loans that they couldn’t afford. In some of those cases the people were quite elderly and it was a very sad and terrible case,” he said.
The issue was brought to the bank’s attention prior to Mr Hartzer’s joining the company in 2011. ASIC alleged that between July 2008 and June 2010, Mr St Pierre dishonestly used his position and submitted loan applications for approval when he knew they contained false information and false documents.
According to the corporate watchdog, Mr St Pierre obtained over $2.5 million for Westpac customers, that they invested with a now failed Tasmanian property development scheme.
“There was a complaint to the CEOs office and we launched an investigation,” Mr Hartzer said, adding that Mr St Pierre resigned from Westpac once the investigation began.
“We reported it to ASIC and have been working on it for a number of years. Thankfully he was found guilty and jailed,” he said.
“Since that time, we have looked into what went wrong and what was it about [the] processes that allowed him to take advantage of that situation. We’ve made changes in our income verification and suitability assessments as a result of that.”
Mr Hartzer added that Mr St Pierre’s files were reviewed and customers have been compensated up to $8 million.
In March 2014, ASIC permanently banned Mr St Pierre from engaging in credit activities and providing financial services.
[Related: Major bank in court over home lending]
James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.
He has a sound pedigree to cover the business of mortgages and the converging financial services sector having reported for leading finance titles InvestorDaily, InvestorWeekly, Accountants Daily, ifa, Mortgage Business, Residential Property Manager, Real Estate Business, SMSF Adviser, Smart Property Investment, and The Adviser.
He has also been published in The Daily Telegraph and contributed online to FST Media and Mergermarket, part of the Financial Times Group.
James holds a BA (Hons) in English Literature and an MA in Journalism.
The major brokerage has reported a record increase in home loan p...
The social media giant has commenced processing applications for ...
Purple Circle Financial Services has reported a record increase i...