Former major bank manager banned for fraud

According to the financial services regulator, a breach report lodged by NAB alleged that bank employees in the Greater Western Sydney area were accepting false documents in support of loan applications and falsely attributing loans as having been referred by NAB introducers in order to obtain undue commissions.

Following an investigation, ASIC found that Mr Awad “recklessly gave NAB information and documentation in loan applications that was false or misleading”.

Specifically, Mr Awad was found to have given NAB false payslips and letters of employment and entered false referee contact details in NAB’s lending systems in multiple home loan applications.

A majority of the false documentation submitted to NAB by Mr Awad was found to have been provided to him by a real estate agent who was previously registered as a NAB introducer.

ASIC also found that:

• Mr Awad received the false documents directly from the NAB introducer rather than the customer, in violation of NAB’s Introducer Program.
• On occasion, Mr Awad received false documents from the NAB introducer via email to his personal email account, before forwarding the documents to his NAB email account and subsequently attaching them to various customers loan applications.

Two other former NAB employees banned

The banning comes just days after ASIC banned two other former NAB employees for similar offences.

Former NAB employees Danny Merheb and Samar Merjan (also known as Samar Awad) were permanently banned from engaging in credit activities and providing financial services following an ASIC investigation. The ban commenced on 29 June 2018.

Mr Merheb, who later went on to become a mortgage broker, was found to have recklessly given NAB false payslips, letters of employment, bank statements and statutory declarations in respect of home loan applications.

Ms Merjan, who later went on to become a bank manager and personal banker at Westpac, was found to have “knowingly and recklessly” given NAB false payslips and letters of employment in respect of personal loan and credit card applications.

ASIC also found that:

• Mr Merheb falsely attributed a loan as being referred to NAB by an introducer who was a friend in order for the friend to receive commissions dishonestly.
• Ms Merjan assisted the third person in the creation of two false documents, which she subsequently provided to NAB in support of lending applications.
• Ms Merjan was twice offered cash by the third person to process lending applications.

All parties have the right to lodge an application for review of ASIC’s decision with the Administrative Appeals Tribunal.

On 16 November 2017, NAB announced a remediation program for home loan customers after an internal review, prompted by whistleblower reports it had received which found that some home loans may not have been established in accordance with NAB’s policies.

NAB identified that around 2,300 home loans since 2013 may have been submitted with inaccurate customer information and/or documentation, or incorrect information in relation to NAB’s Introducer Program.

Royal commission uncovers fraud

The bannings come after several instances of fraud were found to have occurred at the bank in the past few years.

Appearing before the Royal Commission into Misconduct into Banking, Superannuation and Financial Services Industry during its first round of public hearings in March, NAB’s executive general manager of growth and partnerships, Anthony Waldron, was questioned over the bank’s failure to adequately disclose instances of fraud in its Introducer Program prior to 2015.

Documents released to the commission, along with testimony from Mr Waldron, revealed that several NAB employees were allegedly “bribed” by third-party introducers.

In its submission to the commission, NAB also addressed misconduct in its Introducer Program, conceding that there was a lack of accountability, “governance gaps”, over-reliance on banker behaviour, practices that “reduced the probability of misconduct coming to light” and a “lack of due diligence oversight”.

However, the lender claimed that by October 2017, it had “commenced ‘triangulated reporting’ to monitor unusual changes in banker and introducer performance and behaviour”.

NAB noted that triangulated reporting serves as a “mechanism to monitor the relationship” between customers, bankers and introducers by linking “sudden changes in volumes between banker and introducer” and detecting “unusual loan performance”.

*It should be noted that another former NAB employee named Rabih Awad, who is now a mobile lender at CBA, is not the same Mr Rabih Awad as mentioned above, according to a CBA spokesperson.

[Related: Former Perth finance broker sentenced to jail]