The Australian Transaction Reports and Analysis Centre’s Fintel Alliance has published findings from Operation Claw identifying potentially hundreds of millions of AUD in suspected fraudulent loans and systemic weaknesses across Australia’s lending sector. Analysis of data from 10 major banks found activity spanning multiple lenders and borrower groups, mostly linked to properties in Sydney. While the project found no evidence of widespread money laundering, it concluded that the weaknesses could be exploited by criminals. Suspected fraud involved inflated incomes, misrepresented employment, fabricated or unverifiable business activity, and offshore or third-party funds used for settlements and mortgage repayments. Recurring indicators included false or misleading documents and repeated use of the same mortgage brokers, accountants and law firms across applications. Names of potentially involved individuals and entities have been provided to law enforcement and regulatory agencies for intelligence purposes, while participating banks have investigated suspicious activity, strengthened controls, made referrals and ended some banking relationships. AUSTRAC urged all mortgage lenders to review their loan books for fraud indicators, strengthen preapproval controls and report suspicious activity. It has also issued threat alerts and worked with participating banks to develop controls for preventing, detecting and disrupting mortgage fraud, with further action expected.

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