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Broker sentenced for breaching banning order

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Annie Kane 9 minute read

A former broker that had been banned for various fraud-related offences has been sentenced after breaching his banning order.

Shiv Prakash Sahay, a former credit representative of Aussie Home Loans, was sentenced on Tuesday (16 June 2020) on two charges of breaching section 82(2) of the National Consumer Credit Protection Act 2009 (Cth).

Mr Sahay had previously pleaded guilty to the offences of breaching his banning order and was this week sentenced to nine months imprisonment by the Downing Centre Local Court.

However, the period of imprisonment was wholly suspended immediately upon Mr Sahay entering into a nine-month good behaviour bond to the amount of $1,000.

Background to the case

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Mr Sahay had previously been banned from engaging in credit activity on 6 October 2015, following his conviction on 7 July 2015 for various fraud-related offences totalling several million dollars.

ASIC later alleged that he had engaged in credit activity between 8 October 2015 and 2 October 2018, despite being permanently banned from doing so.

The court found that between 8 October 2015 and 2 October 2018, Mr Sahay continued to engage in credit activity in relation to 38 credit contracts for loans totalling over $17 million.

While banned, Mr Sahay provided the following credit services:

  • communicated with consumers about prospective credit applications;
  • requested and received documents from consumers in support of their credit applications;
  • prepared and submitted applications and supporting documents to credit providers;
  • communicated with credit providers, during which he asked for updates on the status of loan applications and discussed the particulars of loans, and on multiple applications represented that he was another individual who was a credit representative at the time;
  • provided supporting documents to a credit representative so they could be submitted under that credit representative’s authority; and
  • provided information to a credit representative so it could be submitted to credit providers.

Mr Sahay earned $111,064 in commissions on these loans.

The matter was prosecuted by the Commonwealth Director of Public Prosecutions after an investigation and referral of a prosecution brief from ASIC.

Mr Sahay’s fraudulent loan activity was highlighted as a case study for the misconduct of mortgage brokers during the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.

Aussie supports ASIC action

Speaking of the sentencing, Aussie issued a statement outlining that the brokerage had identified potential breaches of its "strict code of conduct and legal, credit and compliance obligations by Mr Sahay" in August 2013.

"Aussie immediately suspended Mr Sahay’s contract, which was then terminated on 9 August 2013 after serious breaches were confirmed," the brokerage said.

It continued: "Aussie understands that Mr Sahay subsequently breached an ASIC banning order by engaging in credit activity. Such credit activity was not associated with Aussie.

"Aussie proactively assisted ASIC in providing documentation and supporting evidence to assist them in their original investigation which commenced in 2013. Aussie supported Mr Sahay’s permanent banning by ASIC in 2015 and is pleased to see action being taken by ASIC and the Commonwealth Director of Public Prosecution regarding Mr Sahay continuing to provide credit assistance services.

'Aussie continues its zero-tolerance policy to any infringements and prides itself on upholding some of the most stringent compliance processes in the industry. As part of its governance activity, Aussie proactively and voluntarily reports any serious breaches of broker conduct to ASIC," it concluded.

[Related: Banned broker charged by ASIC]

Broker sentenced for breaching banning order
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Annie Kane

Annie Kane

Annie Kane is the editor of The Adviser and Mortgage Business.

As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts. 

Email Annie at: This email address is being protected from spambots. You need JavaScript enabled to view it.

 

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