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Broker banned for overstating borrower savings

by Reporter2 minute read

A mortgage broker has been banned from engaging in credit activities for three years after submitting false or misleading information on loan applications.

The Australian Securities and Investments Commission (ASIC) has banned mortgage broker Michael Wilkins, from Watanobbi, NSW, from engaging in credit activities for three years after the regulator found that he had “deliberately” filed loans with “false or misleading” information.

An ASIC investigation into several companies and people operating under The Heritage Group found that on five occasions in June and July 2010, Mr Wilkins submitted loan applications on behalf of clients in which he deliberately overstated their savings by between $130,000 and $179,000.

The Heritage Group advised its clients to set up self-managed superannuation funds (SMSF) and buy property with their superannuation. However, concerns were raised about the way The Heritage Group structured the loans and property ownership within its clients’ SMSFs.

The financial services regulator has also:

  • permanently banned Mr John Dimitropoulos from providing financial services or engaging in credit activity (an appeal is pending);
  • cancelled the credit licence of a company formerly called Heritage Financial Solutions Australia Pty Ltd and Heritage – Freedom & Security Pty Ltd;
  • cancelled the credit licence of a company formerly called Sunpac Finance Pty Ltd on its own application; and
  • cancelled the credit licence of Smithson & Baye Pty Ltd. This cancellation is currently subject to a decision on appeal to the AAT.

ASIC has advised that investors who obtained advice or finance from people associated with this group should contact their lender and, if necessary, obtain independent professional advice to ensure that the loans to their SMSFs and their property ownership have been structured in compliance with the trustees’ superannuation law obligations.

[Related: Regulator cancels credit licence of Queensland group]

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