A spectacular arrest at one of Sydney’s most glamorous addresses has exposed what is allegedly one of the largest fraud and money-laundering syndicates in Australian history.
One of Australia’s “big four” banks has allegedly been defrauded of more than $150 million with the help of “corrupt” employees on the payroll of a Sydney crime syndicate that police say built a luxury property empire with the tainted funds.
Several National Australia Bank employees are under investigation for allegedly facilitating home and business loans for the so-called Penthouse Syndicate, which police believe is one of the largest fraud and money-laundering syndicates in Australia’s history.
The syndicate’s alleged ringleader, Shanghai-born 38-year-old Bing “Michael” Li, was in July arrested in the $18 million penthouse of the Crown’s residential tower at Barangaroo, from where police say he directed the syndicate.
His arrest and the investigation into the NAB fraud has brought police scrutiny to professionals working on the outskirts of the finance industry, including corrupt solicitors, mortgage brokers and real estate agents who have allegedly helped the syndicate buy tens of millions of dollars worth of Sydney property over the past two years.
The alleged frauds have raised serious concerns about the banking sector’s regulation and what powers watchdogs have to investigate and prosecute corruption within financial institutions, and cast doubt on reform of the banking sector since the scathing royal commission into the conduct of the country’s finance giants.
The NAB employees, working at several branches across Sydney, are suspected of receiving bribes from the syndicate to approve the loan applications, which were submitted with allegedly fraudulent documents, including company records, tax returns and financial statements over the past two years. None of the employees have been charged.
“The worst thing is that they’re violating their position of trust,” Detective Superintendent Gordon Arbinja, commander of NSW Police’s financial crimes squad, told this masthead.
Authorities believe the syndicate continues to operate and have not ruled out further fraudulent loans being facilitated through NAB and other major banks as investigations continue. NAB customers have not been targeted in the alleged fraud.
Detectives have charged 14 alleged syndicate members over $107 million worth of fraud, $15 million of which is linked to NAB. While police believe many syndicate members are yet to be charged, detectives investigating the group have identified more than $150 million worth of allegedly fraudulent NAB mortgage and business loans they say were paid to the syndicate.
Beyond NAB, hundreds of millions of dollars worth of fraud, including against other major banks, has been linked to the syndicate, which police allege recruits “complicit mules” to buy properties with fraudulent home loans on behalf of the group, allowing the group to launder millions through the properties.
Chris Sheehan, head of NAB’s group investigations and fraud business unit, said the employees suspected of being involved had been suspended “pending the outcome of the internal and police investigations” and that the bank was working with detectives investigating the fraud.
“NAB takes any allegation of wrongdoing extremely seriously and has zero tolerance for employees who engage in conduct that doesn’t align with its values,” he said.
“When notified, NAB acted swiftly to investigate and took appropriate internal action.”
NAB’s previous woes
Separately, NAB has previously come to the attention of the federal government’s anti-money laundering and financial crimes watchdog, the Australian Transaction Reports and Analysis Centre (AUSTRAC), which opened an investigation into the bank’s anti-money laundering compliance.
After a five-year AUSTRAC investigation into suspected breaches of anti-money laundering laws, NAB in April 2022 entered into an enforceable undertaking with the regulator. The bank, which was spared a multimillion-dollar fine, agreed to improve its compliance of anti-money laundering and counter-terrorism financing laws.
The enforceable undertaking was finalised in July this year.
“Through a transparent and constructive process with AUSTRAC and the external auditor, NAB has transformed our approach to managing financial crime,” NAB chief executive Andrew Irvine said at the time.
In a statement on the same day, AUSTRAC chief executive Brendan Thomas said NAB had demonstrated a commitment to ongoing compliance and to tackling the risks and harms posed by serious and organised crime.
But this masthead can reveal allegations that syndicate members secured millions of dollars worth of home and business loans while the enforceable undertaking was in place after submitting legitimate identification documents through the KYC process.
In late November 2024, an alleged syndicate member, Hanna Karliana, electronically provided a “selfie-style” image of herself, her Australian passport, phone number, email and signature as part of an application for a $6 million home loan, according to court documents obtained by this masthead.
As a direct result of the identification documents and allegedly falsified financials provided, a NAB employee unconditionally approved the home loan application, according to the court documents.
Under its powers, AUSTRAC can fine banks hundreds of millions of dollars, issue infringement notices or enter into an enforceable undertaking with financial institutions if it finds the company did not have adequate systems and controls in place to prevent corruption. AUSTRAC is aware of the fraud, but has not yet taken any action against NAB.
Last month, detectives charged Karliana, 61, and her partner Indra Hari Nurkianto, 60, with a number of offences over their alleged roles as mules for the Penthouse Syndicate. Police allege the couple bought $15 million worth of property on behalf of the syndicate using fraudulent documents. The more than $12 million mortgages on the properties, as well as three business loans worth more than $2.3 million were allegedly approved by a corrupted NAB employee. Their cases, and other charges related to the syndicate, remain before the courts and are yet to be tested.
Banking sector employees are obligated to submit a suspicious matter report if they suspect a customer is involved in money-laundering, dealing with the proceeds of crime or tax evasion, according to AUSTRAC. NAB did not comment on whether employees had submitted suspicious matter reports related to syndicate members.
“A lot of loans out there in the banking industry, unfortunately, are still being serviced by tainted funds,” Arbinja said, speaking generally.
“If they know, and they suspect, that loans are being serviced when there are question marks of how they’re servicing that loan, that loan needs to be stopped and those financial institutions need to contact police and say ‘I think we’ve got a problem here’.”
Separately, in 2018, the banking royal commission heard evidence NAB staff had falsified documents and a fraud ring had abused the bank’s introducer home loan program.
Police have charged Li, the alleged Penthouse Syndicate head, with 87 offences, including knowingly directing the activities of a criminal group and dealing with the proceeds of crime. At the time of his arrest, Li had rented the $37,000 per month Crown penthouse for about a year. His alleged fellow ringleader, Yizhe “Tony” He, was charged with 107 offences. Both remain in custody before the courts.
Detectives this month arrested Li’s wife, Zhouyao Chen, and charged her with 11 counts of dishonestly obtaining financial advantage by deception, participating in a criminal group and contributing criminal activity. Li and Chen, who bought and sold almost $17 million worth of property across Sydney between 2019 and 2023, are expected to be charged with a raft of other offences as investigators unravel the syndicate’s alleged frauds.
Police allege the syndicate defrauded NAB using a number of steps that are commonly used by large-scale money-laundering operations, including purchasing an existing company registered with the Australian Securities and Investments Commission (ASIC), registering a new director – often one of the syndicate’s paid mules – and preparing fraudulent financial records for the companies.
Police say the syndicate has purchased several companies, which typically have a minimum of two years’ trading history and are often referred to as “shell companies”, for between $5000 and $10,000. The purchasing of the shell company is regarded as the most crucial step for the syndicate, which police say relies on the companies to facilitate fraudulent loans. Detectives allege the syndicate has used a shell company to purchase each of the properties linked to the frauds.
Investigators have linked at least 10 allegedly fraudulent companies to the NAB frauds, which were discovered after detectives from NSW Police’s financial crimes squad started investigating a $10 million fraud scheme involving the purchase of non-existent luxury cars in Sydney’s west. ASIC, the corporate watchdog, does not control the buying and selling of registered companies, nor does it prosecute individuals over the practice. There are more than 3.4 million companies currently registered with ASIC.
An ASIC spokesperson said the agency was aware of the alleged NAB fraud and had shared information with other regulators and law enforcement agencies.
“ASIC will review any evidence provided to us to support allegations that a company or its officeholders, or anyone is breaking laws overseen by ASIC,” they said.
ASIC can deregister a company if made aware that it has failed to meet the requirements set out under the Corporations Act. None of the companies police say are linked to the syndicate have been deregistered.
The NSW Crime Commission has seized $60 million worth of property, cars and luxury goods linked to the syndicate. The total alleged fraud linked to the Penthouse Syndicate is expected to grow as detectives discover more fraudulent loans. Police believe the syndicate’s mules are currently living in properties purchased through the frauds.
Li, 38, has been charged over $12.9 million worth of fraud, but police allege he was heavily involved in orchestrating a large portion of the alleged NAB fraud and has, through mules hired by the syndicate, bought several properties in the past two years.
Court documents detail how a senior banking manager at NAB allegedly approved a $2 million mortgage application and a business loan worth almost $500,000 after advising Li and other alleged syndicate members which documents would be needed to secure the loan. The mortgage was used to purchase Bondi Junction beauty salon, Beauty Pavilion.
Detectives allege Thi Ngo Hao Vu, the salon’s owner, submitted doctored financial records for her company, Prolific Path Pty Ltd, which holds Beauty Pavilion and a second salon, Bondi Nails. The fraudulent documents were used to inflate the company’s income, detectives allege.
According to court documents, to secure the business loan, Vu submitted fraudulent documents showing Prolific Path, and a second company she is director of, CF Group Global Pty Ltd, earned more than $2.1 million in 2022 and 2023. Records held by the Australian Taxation Office show CF Group Global recorded a loss of $276 in 2022, and did not lodge a tax return in 2023, according to court documents.
Via encrypted messages with Li, Vu and her husband, Ibnu Pratama, the banking manager, who cannot be named for legal reasons, advised the trio which documents were required to secure the loan and specific amendments to make to the proposed application. When he approved the $486,750 business loan, detectives allege, the banking manager knew the documents were fraudulent.
In August, Vu was charged with three counts of dishonestly obtaining advantage by deception, two counts of knowingly dealing with the proceeds of crime with intent to conceal and eight counts of using a false document to obtain financial advantage related to $3.2 million worth of allegedly fraudulent mortgage and business loans.
Pratama left Australia in December 2023, a week after detectives raided the home of one of he, Li and Vu’s business partners. He has not returned to the country. A warrant for his arrest was issued this month.
Chasing the money
While property linked to the syndicate, which is believed to have grown to dozens of members, continues to be seized, detectives believe it is unlikely the millions allegedly stolen by the group will be recovered.
In some instances, mortgages were allegedly taken out for properties that never existed, meaning the banks have no physical asset to repossess. Other times, detectives allege, real estate agents linked to the syndicate overvalued properties by millions of dollars to increase the mortgage syndicate members could take out, inflating the market in the process.
If NAB were to repossess the properties and sell them, Arbinja said, they would probably be left millions out of pocket.
While investigations into the NAB employees are ongoing, detectives are focusing on other “corrupted insiders”, including mortgage brokers, solicitors and real estate agents suspected of being on the syndicate’s payroll.
“There will be more people arrested,” Arbinja said.
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