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A Melbourne lawyer will spend at least three years behind bars after conducting a five-year mortgage fraud involving $1.8 million of loans.
Brian Francis Maloney, aged 59, pleaded guilty to 16 charges of obtaining financial advantage by deception, 13 of which involved false mortgages and loan documents.
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Chief Justice Marilyn Warren said the victim of the fraud was Tony Gatt, who first engaged Mr Maloney in 2004 to act for him in the sale of some properties and a business.
Justice Warren, in sentencing Mr Maloney, said the fraud began when he asked Mr Gatt what he would do with the sale proceeds and learned that he planned to live off the interest.
"You explained to Mr Gatt that your practice had a mortgage lending component. You told Mr Gatt that you could invest the monies through your firm," Justice Warren said.
"You told him the monies could be lent to some of your clients and would be secured by mortgages. You also said your clients were willing to pay a higher interest rate."
Justice Warren told Mr Maloney that he received $1.8 million from Mr Gatt in 13 separate transactions between 2007 and 2012.
"You did not forward the money lent by Mr Gatt to the third party. You falsified a number of documents to establish the loan and to facilitate the fraud," she said.
"Using false documents for the transactions, you represented to Mr Gatt that the loans were legitimate, thereby deceiving him into providing funds.
"Moreover, you used the names of both employees and family members as bogus third parties in these transactions."
Mr Maloney used the loans for personal and business expenses. Mr Gatt didn't suspect the fraud because he received monthly repayments, eventually totalling $1.1 million. He lost $650,000 in the fraud, the court found.
Justice Warren said that matters came to a head in late 2012 when Mr Gatt asked for overdue monies.
A remorseful Mr Maloney planned to commit suicide so that Mr Gatt could benefit from his life insurance. However, the suicide was prevented and the fraud was reported to the police.
Justice Warren said that Mr Maloney fully admitted his guilt, cooperated with the investigation and accepted that he deserved to be punished.
Mr Maloney received a five-year sentence with a non-parole period of three years, after facing a maximum sentence of 20 years.
[Related: Broker jailed, more charges may follow]
