Fintel Alliance Finds Coordinated Mortgage Fraud Across Major Australian Banks
AUSTRAC’s Fintel Alliance has identified coordinated mortgage fraud and systemic weaknesses across Australia’s lending sector after analysing data from 10 major banks.
According to AUSTRAC, the joint project — known as Operation Claw — identified potentially hundreds of millions of dollars in suspected fraudulent loans, with most of the activity linked to properties in Sydney.
False income and complex funding arrangements
The analysis found mortgage applications supported by inflated income figures, misrepresented employment and fabricated or unverifiable business activity. AUSTRAC also identified cases in which offshore or third-party funds were used to complete property settlements or make mortgage repayments.
Recurring indicators appeared across participating banks rather than being confined to a single lender or borrower group. These included falsified or misleading documents and the repeated use of the same mortgage brokers, accountants and law firms across multiple loan applications.
AUSTRAC said the project did not identify evidence of widespread money laundering. However, the weaknesses uncovered could be exploited by criminals seeking to place illicit funds into the Australian property market or create apparently legitimate income and financing arrangements.
Referrals and control improvements
Fintel Alliance has provided names of individuals and entities potentially involved in submitting false documents to agencies including the Australian Securities and Investments Commission, Australian Taxation Office and Tax Practitioners Board for intelligence purposes.
Participating banks have used the intelligence generated through Operation Claw to identify potentially fraudulent loans, investigate suspicious activity and strengthen internal controls. AUSTRAC said some banking relationships have already been terminated and further action is expected.
The project also involved the Australian Taxation Office, NSW Police Force, NSW Crime Commission, Australian Criminal Intelligence Commission, APRA and ASIC. AUSTRAC has issued multiple threat alerts setting out mortgage-fraud indicators and is urging lenders to review mortgage books, report suspicious activity and strengthen preventive controls.
The findings are particularly relevant as Australia expands its AML/CTF framework around real estate and professional services. Mortgage fraud is not automatically money laundering, but false income evidence, opaque third-party funding and repeated use of professional intermediaries can create channels that also support the movement or concealment of illicit funds.
