Two Commonwealth Bank of Australia (CAB) staffers are facing legal action for their alleged role in some fraudulent transactions that involved AU$76 million. The employees allegedly ran a Ponzi scheme for five years. The allegation also hinted that the bank’s management was aware of it and did not take any early action. According to reports, the two staffers were getting secret commissions for their role in the fraud. Commonwealth Bank is Australia’s biggest lender.
Poker player Bill Jordanou and accountant Robert Zaia hinted that they would plead not guilty. There may be almost 100 fraud and deception offences as part of the scam, reports said. The duo will face court in February 2017, reports The Sydney Morning Herald.
The two employees allegedly used forged documents and borrowed millions of dollars in the name of property developments that were still on paper. They also siphoned off money from the accounts of clients without their knowledge or consent.
The scam was first reported by Jim and Debbie Barker from the Victorian city of Mildura. They notified the scam to the bank after AU$26,000 went missing from their account. They also cited the case of forged documents. In one of the supporting documents for an application for AU$1.5 million loan, Barker was shown as drawing an annual salary of $343,000. They alleged that the document was a forged one and made up with the complicity of the Commonwealth Bank staff. Andrew Rutherford, CBA assessment analyst, later confirmed that the document was indeed a forged one.
Melbourne property developer Nick Fotopoulos also lost more than $5 million. He launched a civil case against the bank. The CBA documents and emails in his possession revealed the extent of bank’s involvement in the alleged fraud, reports said.
The documents with Nick indicated that the alleged fraud had been going on since 2007. Though the bank was very much aware of the goings on, it did not report the matter to the police until 2011.
According to reports, some mobile lenders were also part of the scam. But none of them have been charged. One of the mobile lenders may be testifying against Jordanou and Zaia.
Responding to the scam, a spokesperson of CAB said the bank has “zero tolerance to bribery and corruption,” reports SBS News. The spokesperson also added that the bank would continue to “co-operate with the police and the legal process as this complicated issue unfolds in the courts.”