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A former Aussie Home Loans broker has been charged with breaching an ASIC banning order, with the regulator alleging that he continued to engage in credit activity despite being permanently banned from doing so.
Shiv Prakash Sahay, a former credit representative of Aussie Home Loans, has been charged by ASIC for engaging in credit activity in relation to 38 credit contracts between 8 October 2015 and 2 October 2018, despite being permanently banned from doing so by ASIC on 6 October 2015.
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The 38 loans reportedly administered by Mr Sahay over the course of his ban totalled more than $17 million, ASIC alleges, and led to Mr Sahay earning $111,064 in commissions.
As such, ASIC has charged Mr Sahay with two contraventions of the National Consumer Credit Protection Act 2009, and Mr Sahay’s solicitor has advised the court that the defendant would plead guilty to both charges.
If convicted, Mr Sahay could face up to two years in prison, a fine of up to $18,0000, or both for the first offence, and a maximum of two years in prison, a fine of $21,000, or both for the second offence.
The current matter is being prosecuted by the Commonwealth Director of Public Prosecutions and will be heard at Downing Centre Local Court on 7 April 2020 for sentencing.
Commenting on the new charges, a spokesperson for Aussie Home Loans told The Adviser: ”In August 2013, Aussie identified potential breaches of its strict code of conduct and legal, credit and compliance obligations by Shiv Prakash Sahay. Aussie immediately suspended Mr Sahay’s contract, which was then terminated on 9 August 2013 after serious breaches were confirmed.”
“Aussie proactively assisted ASIC in providing documentation and supporting evidence to assist them in their investigation. Aussie supported Mr Sahay’s permanent banning by ASIC and is pleased to see action being taken regarding Mr Sahay continuing to provide credit assistance services,” the spokesperson said.
“Aussie continues its zero-tolerance policy to any infringements and prides itself on upholding some of the most stringent compliance processes in the industry. As part of its governance activity, Aussie proactively and voluntarily reports any serious breaches of broker conduct to ASIC.”
Background to the banning order
Mr Sahay was permanently banned from engaging in credit activity in 2015 after pleading guilty to, and later being sentenced for, three charges of fraud.
The court found that Mr Sahay had falsified loan documents and statements, resulting in $4.796 million being loaned to his clients.
The ASIC investigation in 2015 found that between 14 November 2011 and 6 August 2013, Mr Sahay made false statements in loan applications, and created and utilised fake bank statements for 17 of his clients, in an attempt to secure home loans totalling approximately $7 million.
Ask Consultancy Services, a company owned and controlled by Mr Sahay, reportedly received $5,500 in upfront commissions in addition to ongoing commissions, as a result of his fraudulent behaviour.
At the time, he was sentenced to 350 hours of community service, in addition to being permanently banned by ASIC.
Mr Sahay’s fraudulent loan activity was highlighted as a case study for the misconduct of mortgage brokers, during the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
[Related: ASIC bans convicted broker]
