A former Western Sydney NAB branch manager has been sentenced to 12 months imprisonment – to be served by way of Intensive Corrections Order – for making false and misleading statements to NAB in relation to 24 home loan applications.
Mathew Alwan had previously pleaded guilty to an “intention to defraud by false or misleading statement” charge after he told NAB that an introducer had referred borrowers to make loan applications.
However, it was found that the NAB introducer was actually Mr Alwan’s uncle, operating under the business name Suit Club.
According to an ASIC investigation, between 23 October 2013 and 19 September 2015, Mr Alwan dishonestly made false and misleading statements to NAB in relation to 24 mortgage applications.
These resulted in NAB paying Suit Club $56,995 in commissions.
Mr Alwan, who was permanently banned from engaging in credit activities and providing financial services last year, will now serve his prison sentence in the community by way of an Intensive Corrections Order (ICO), a court order that requires the offender to perform up to 32 hours of community service per month.
As part of the ICO, Mr Alwan will undertake 200 hours of community service and ongoing rehabilitation treatment.
In delivering the sentence, Magistrate Atkinson remarked that there had recently been a royal commission into the banking industry in which there had been very strong statements made with respect to the need for accountability.
ASIC said that the judge outlined a need for strong general deterrence so that people in the industry understood the importance of compliance.
Speaking after the sentencing, ASIC deputy chair Daniel Crennan QC commented: “ASIC’s action against Mr Alwan now comes to a close, but its civil enforcement case against NAB itself demonstrates the broader litigation efforts ASIC is undertaking in respect to the NAB Introducer Program.”
A NAB spokesperson told The Adviser: “We welcome the conclusion to this case. Mr Alwan’s actions were completely unacceptable and as a result, his employment at NAB was terminated in November 2015 and we reported him to ASIC.”
For example, further action regarding the NAB introducer program has also been taken against former NAB branch manager Rabih Awad.
Introducer fraud highlighted at the royal commission
While NAB has been operating a “spot and refer” introducer program since 2000 (which reportedly generated $24 billion dollars worth of loans between 2013 and 2016 alone), it announced in March of this year that it would be terminating the program as of 1 October this year.
The decision follows on from NAB overhauling its introducer program last year, when it reduced its introducer network from 8,000 to just over 1,000.
The NAB spokesperson added: “The case relates to the NAB Introducer Program, which we announced in March would cease given the program had inherent risks and ultimately fell short of customer and community expectations.
”We have run a remediation program for impacted customers and will continue to make changes to earn the trust of our customers and the community.”
NAB last year also ceased accepting referrals from introducers who operate outside the professional services industries.
This came after NAB reported to ASIC that it had uncovered several of its bankers, including Mr Alwan, were engaged in fraudulent misconduct in Greater Western Sydney.
This misconduct was later featured in the first case study before the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
The role of introducers in mortgage lending was referred to repeatedly over the royal commission, as it looked at intermediated relationships and its impact on lending.
[Related: NAB to ‘carefully assess’ ASIC allegations]