Mortgage broker jail time suspended

Former Aussie Home Loans adviser Shiv Prakash Sahay’s nine-month prison term was suspended.

The commission found that on three out of four occasions, Aussie Home Loans had not reported fraudulent behaviour to either the corporate regulator or the police. Picture: AP

A financial planner at the centre of the banking royal commission has dodged time behind bars despite pleading guilty to a slew of financial fraud offences related to loans totalling more than $17m.

Former Aussie Home Loans adviser Shiv Prakash Sahay offered a guilty plea in a NSW Local Court for providing ongoing credit services, even though the corporate regulator had permanently banned him from engaging in credit activity.

Mr Sahay was sentenced to a nine-month prison term that was wholly suspended immediately upon entering into a good behaviour bond of $1000.

Mr Sahay was charged on two counts relating to consumer credit protection laws, after the Australian Securities and Investments Commission revealed he had provided credit advice on 38 loan contracts between October 8, 2015 and October 2, 2018.

ASIC previously barred Mr Sahay from providing financial advice in July 2015, for falsifying documents on behalf of clients in order to get them an approved home loan.

On the 38 credit contracts, he had earned $111,064 in commissions.

The court found Mr Sahay had communicated and received documents from consumers regarding credit applications, and had submitted applications to loan providers via another individual who was a certified mortgage broker.

ASIC had initially probed Mr Sahay’s fraudulent behaviour regarding financial misconduct on $7m worth of home loans, where he was the assigned mortgage broker.

While working as a broker for Aussie Home Loans, he falsified client documents for loan applications at either Bankwest or Suncorp.

The fraudulent documents included bank statements and loan application details.

Mr Sahay’s conduct as a mortgage broker at Aussie was one of the key pieces of evidence brought to the Hayne royal commission, which revealed that the wholly owned Commonwealth Bank subsidiary had failed to report financial misconduct to ASIC.

The commission found that on three out of four occasions, Aussie had not reported fraudulent behaviour to either the corporate regulator or the police.

In the commission’s findings: “Three of the four brokers were ultimately charged with criminal offences as a result of their conduct. Aussie did not report the conduct of any of the four brokers to the police.”