Senator Fawcett re Liquidators Senate Inquiry Engineered Defaults

8/18/2019 Senator Fawcett re Liquidators Senate Inquiry Engineered Defaults

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SUPPORTIVE RESIDENTS CARERS

ACTION GROUP INC

Registered with

Dept of Justice Victoria/ Consumer Affairs A0038178T ;

Founded: 1996

http://bankinfoline.com/chapter-19.html; bankvictims.com.au;

Submission to the Senate Inquiry

under Senator David Fawcett

into

Engineered Loan Defaults

& Liquidators, Valuers, Lawyers

http://bankinfoline.com/chapter-19.htmlhttp://bankinfoline.com/chapter-19.html


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Liquidators:

The Inquiry should ask ASIC if it is aware of liquidators spending sale money to extend liquidations, run up

fees, defer paying creditors and running up uncommercial fees for themselves, perhaps at the cost of the

ATO and creditors.

Is it a crime to structure things so the ATO is deprived of its rightful revenue? What are the penalties?

Senator Williams for example noted one case chased $28,000 at a cost up to $400,000. That might not

only enrich some while depriving creditors but it may also defer paying out pennies to desperate small

business creditors who are living on the high interest credit cards that Sen Lambie has raised. ASIC tells us

that liquidators owe a duty to all creditors, but does ASIC do anything about it, and what compensation is

due to the cheated creditors?


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The Inquiry should ask ASIC if it is aware of cases like this example:

1. Business owes the ATO $200,000 and creditors $100,000, and has a Heads of Agreement Sale for

say $400,000. Settlement Date is 60 days;

2.

The ATO worries the director will take the settlement money and run off;3. The ATO appoints a Liquidator in the expectation that a sale at $400,000 will pay Treasury in full

as well as creditors, with money left over for the liquidator.

4.

But the liquidator sells to the same buyer with settlement in 14 days for only $200,000, with

$100,000 as Immediately Released Deposit as fees. The remaining $100,000 is used to chase

nickel and dime debts and make the liquidator and lawyer richer. Treasury misses out, creditors

miss out.

Does the Liquidator and Lawyer owe duties to the ATO and to Creditors to not profit from selling “for half ” to

the same buyer on terms that cheat the ATO out of its money.

Does the ATO have protocols in place to see if it gets far less than it expected?

Should Liquidators be forced to make reasonable distributions to struggling small creditors who are

watching a liquidator feast on the crumbs they hope to salvage from sales to a con artist in liquidation?

Liquidation knock-on effects in small towns:

We have heard of butchers taken down for $20,000, coffee suppliers taken down for $50,000, and many

other stories. These are big bickies in a small business. Liquidators should be banned from gorging on the

left overs. Killing the small shops kills off employment and kills off the town, and property values. Then the

Loan to Value Ratio clauses cause foreclosures.


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Valuers/Realtors:

We have heard of realtors demanding (tax free) holidays in Hawaii as the price for referrals.

We have also heard that Agents require the lawyers to delete “subject to government dept permits” clause

so the sale is Unconditional. Then the commission is payable even though there’s a huge legal mess if apermit is refused. It’s the other lawyer ’s fault or the other side’s fault, people will hear. No it’s not: it the

shonky agent and the shonky lawyer.

Lawyers:

We hear that Agents and Valuers and Banks want gifts or entertainment or money for referrals to big firms.

Perhaps the lawyers need to recover money from battlers to pay the huge entertainment expenses like

Corporate Boxes at the Football.

Dr Barry Landa:

He didn’t get the $1m loan money: a bank agent took off with it. And they defaulted him. Barry fought the

Bank, paid out $4m, refused to sign a gag, and fought the bank to get his title deeds. Now he wants his

$4m back. Is this FOS part of the Engineered Default game?

FOS Comes To The Rescue ...... Of NAB

May 30, 2015 at 6:51am

NAB CEO Andrew Thorburn has not responded to our call yet. Dr Barry Landa has not

been reimbursed the $4 million he is owed. CEO Thorburn must think that an FOS form letter isall the protection the bank needs to avoid its obligations and responsibilities.

Dr Landa summed it up nicely after he asked FOS to help him get justice -

"I complained about two FOS members and their activities in my letter to Kemp Strang

lawyer Mathew Pike. Namely known unreported money laundering ........ and known breach

of banking protocols by the banking of large 3rd party cheques into a known forged

account. The jailed criminal broker's wife had a forged account with Perpetual. All this was

and is known by NAB who received my family's money. IS THERE NO REGULATOR TO

INVESTIGATE AND PROSECUTE KNOWN PROVEN BANK CRIMINALITY..!!??"

The FOS response? Just more of the babble that many of you have seen before (see the email

below).

Dr Peter Brandson. CEO Bank Reform Now

https://www.facebook.com/notes/bank-reform-now/fos-comes-to-the-rescue-of-nab/691449024297082https://www.facebook.com/notes/bank-reform-now/fos-comes-to-the-rescue-of-nab/691449024297082https://www.facebook.com/notes/bank-reform-now/fos-comes-to-the-rescue-of-nab/691449024297082


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Prevent Banks from hiding documents behind trusts and behind shell companies and faux

middlemen:

The Engineering is concealed. How can a Master Trust Deed be so confidential that the bank ’s barrister

cannot see it?

For example, this document says the bank managers are kept in the dark. Ergo the public are misled.


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The Engineering is so secret, your Inquiry has trouble getting to the truth.

In this case, it took the US Courts & Prosecutors to prove that the AUSTRALIAN Reserve Bank was being

defied by Amex-Australia and its parent. Amex misled shareholders, the SEC, everyone, pleadShareholders in New York’s Courts. Should banks be allowed to do that


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Goodness, the poor shareholders plead reliance on newpapers and SEC filings for information, while

people ask “Why do Australians know more?”


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Farmer Suicides:

In the Court of Public Opinion, we know the game was engineered.


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In the USA, “book-keeping laws” that jailed Al Capone are in Charges for 2nd degree murder. Did Australian

banks predatorily set upon distressed farmers, like Mr Dixon on 60 Minutes, and get him to sign ‘new’

documents that made him unable to pay the bank back? If so, what criminal laws could apply to the bank?


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Suicides from mortgage stress:

This poor teenager tried to help his family, but the strain got too much. God Bless him for trying.


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The “legal game” of obfuscation, delay and lies causes real damage, and suicides.

Families and communities are devastated!

Banks should compensate more than just the legally-proven loss. Treble Damages are the norm in the

USA. Let the shareholders sue the board …and the lawyers, valuers, liquidators too.

Bring back citizen-initiated grand juries.

Look at this case where a Grand Jury into old Al Capone Book-Keeping Laws resulted in book keeping

charges that carry life sentences because the cover up caused mass deaths. Think FIFA and how US laws

prosecute bankers. Sack ASIC and sub-contract to real corporate cops. Think Grand Juries too.


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Banks should be banned from getting legal and other costs from borrowers: ban the deep pocket syndrome

that robs shareholders. In this matter as Sen John Williams knows, a $28,000 dispute cost 13 times more!

Redraft Court Document Precedents so the average person can defend himself in Court. Put the Justice

back in the Legal System. (There’s only so much lay people can achieve, please help).

.


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Stop the Liquidator gravy train. Empower shareholders to claw back bonuses with backdated effect.

Prevent banks from selling dud schemes as the road to riches while betting the market will collapse: eg

Timbercorp.


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Case 2: Bank-mediated deals let them escape: a one way street, or a highway to Hell

The mediation agreements with banks have innocent looking escape clauses.

The reality is people are tricked into agreeing to default judgement on foreclosure orders + huge fees if the

bank uses technicalities to turn the nice looking deal into a bad one.

An example is the tide of cases known as NAB v Sgargetta.

He disputed $24,000:- the bank wouldn’t prove it re-lent to him expensive money it borrowed from the RBA

or the cheap $4.5b it got from the US Fed Reserve.

He thought the bank and its own panel mediator merely wanted the agreed $299,000 to discharge a

mortgage.

He didn’t think he was being set up with ‘minor’ preconditions to trigger default judgement for $1m to $1.3m

of mainly legal fees.

His American buyers arranged the funds, and he went to pay it to the bank’ lawyers.


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The bank lawyers refused it, according to 2 Judges in this extract.

The bank or its lawyers always ‘discovered’ they forgot an extra $15,000 here or an extra $24,000 therethat had to be paid to avoid foreclosure. Hmmm.

He huffed and puffed at Judges all over the land, to no avail. The fix was ‘in’. He was trapped.

The bank held their ground even after he went to Victoria Police. VicPol were unwilling to rely on 2 Judges’

findings that basically said the lawyers mis-spoke on oath and from the Bar Table when they said he didn’t

hand them a cheque at all. (A brave barrister said he saw it and the jig was up, except the pre-conditions

meant he was doomed to fail).

The Bank held their ground even when he went to the legal services commissioner with a complaint that

was dismissed. Somehow the bank lawyers were ethical, a fact that baffles everybody.

Oddly, the Commission wanted to know about people in photos at Treasury Place, and know what you

Senators may know.

In the background, some bank lawyers were looking into things while the FBI was looking into some things.

The legal ethics commission also deny blurting to people who published forecasts on David Murray’s Fsi


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Review. How much is 16% of $83 billion and 12% of $419 billion???


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The bank and its lawyers suddenly offered him $1,000,000 or more in Debt Relief …. right about the time

the American buyers were told to go to the FBI and to the US Office of Sean X McKessy.

Coincidentally there was a US/Australian Police Strike Force in the wings into a bank executive with the

same surname as the undisclosed secret American buyers.

Why would the shareholders of a bank write off $1m of interest and fees over an initial argument for a lousy

$24,000??? After all, the bank wasn’t worried about ASIC or FOS or Judges or the RBA. Perhaps you can

look into it.

CBA Spy Scandal:

The Engineering Inquiry should look into Secondments in places like ASIC, how FOS ’ terms were changed

to make brokers non-agents of the banks, and the infamous Spy Scandal.


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Case 2: Gag Clauses:

Please investigate if gag clauses on executives in international banking or in Bank-mediations with (say)

American-Australian dual citizens can validly stifle investigations.


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Please investigate if these internationally-engineered defaults breach foreign laws.

Please find out what’s the difference between gagging someone and Stifling a Prosecution?

Case 3: Shareholders v CEO, Audit Committee & Directors: Are Bank-Mediations a safety net for the

fallout from engineered defaults and asset-based predatory lending?

Our association supports or is affiliated with various disability groups. Why are we interested in engineered

defaults? We had 80 people seeking refuge from homelessness in carer homes for the aged poor under the

Victorian Health Department, all complaining about FOS and engineered defaults, falsified loan

applications, and one-sided dealings with the banks’ Mediation scheme.

We think you should investigate if these “Ombudsman” Schemes are rigged parts of the Engineered

Default Gameplan.

ASIC was disinterested in looking at its bank-run mediation scheme …. who disagreed with Reserve Bank

data, US Prosecutors and US Court cases on the Foreign Corrupt Practices Act and “book-keeping” laws

that nabbed Al Capone and FIFA and BHP Biliton, and many others.

Who disagrees with the RBA, Harvard & 18 Attorneys-General on extraditable white collar bank crimes???

Don’t these legal eagles watch cases like FIFA’s global arrests?


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Have you ever come across egregious defiance of laws that can jail people with multiple life sentences?

12% of $419 billion is a lot of money that these Australian “revolving door yes men’ played with”, no?

12% of $419billion sound like a lot of money these Ombudsman people ‘sided with the bank’ about. And

they lost! Please investigate if they paid off people who they feared might know too much.


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Case 3: Mrs K:

___________________

My annihilation by NAB:

I live in Sydney and have been a customer with NAB for 46 years (also - my husband was amanager with NAB decades ago). In 2010, my facility expired and as before, I expected torefinance my loans.

I had not missed a single payment of interest and had sufficient income together with $865,000Term Deposit which met a shortfall interest on a vacant property in Parramatta. This property isequal to the best in Parramatta in terms of location and size was subject to Council's changes to theDCP - which was but a matter of months away - and I expected to be allowed to wait for the DCP

to be tabled. Changes to zoning meant that my property would increase in value by at least $2Million.

For no better reason than I "was eroding the Bank'ssecurity" - the NAB foreclosed. The NAB froze my$865,000 in Term Deposit and then, instituted PenaltyInterest of 15.9% - which, of course, I couldn't fund.

They appointed Price Waterhouse receivers who refused to allow my tenants of over 20 years to

proceed with a signed, witnessed Contract of Sale to purchase another property which would thenhave meant that the remainder of my properties would not have to be sold.

Price Waterhouse then proceeded to sell my properties, including a magnificent block of Units inEdgecliff. They sold it for less than the NAB's valuation and allowed the purchaser, a developer, to put the units for sale the day following exchange of Contracts on 5% deposit. He sold 8 of the Unitson this first day - at extremely cheap prices; $480K compared to recent sale of comparable unit inadjoining block for $710K. Speed was the order of the day.

They also allowed him to continue with my Strata application under my Company name and by thetime settlement was due - 6 weeks later - the building was strata titled and sold - and the developer

made in excess of $2,000,000 profit. It was the same with the remaining properties.

Though the sales of my properties were completed in 6 months, Price Waterhouse didn't close thefile for 20 months. Eventually, with "losses" cited by Price Waterhouse, NAB then evicted me &sold my home for $1,640,000; the following sales in close proximity reached over $2,030,000. The NAB used up the $865,000 term deposit in penalty interest and now say I owe them approximately$120,000 for "losses." This is after humungous fees charged by Price Waterhouse over 20 months.


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Along with many others who have been annihilated by NAB and other banks, my health hassuffered dramatically. I have a relatively rare autoimmune disease which affects the veins in myhead - akin to walking around with a live hand grenade.

After working alongside my husband (deceased) for an average working week of 72 hours for most

of our lives - I am destitute. Price Waterhouse told me "start again." I'm nearly 70 years old andcompletely worn out.

How is it possible in Australia that the bank can prevent us from using our own funds to pay ourmortgage? _____________________________________________________________________________

Case 4: As seen across Australia and US media:

The television and media coverage about Ms Frankham at Bendigo Bank is always in the news. The

Victorian Napthine Government should hang its head in shame for allowing the next door neighbour to be a

quasi financial advisor + power of attorney! This must be predatory engineered dealing.


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Please adjust the onus of proof on bank executives.


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Basel Calculator

There is a 10 part series on youtube and the worldwide www.bankvictims.com.au network that is instructive

on the engineered defaults.

http://www.bankvictims.com.au/http://www.bankvictims.com.au/http://www.bankvictims.com.au/http://www.bankvictims.com.au/


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30 year mortgages for 80 year olds?

There are too many horror stories to mention, though the lending to 80 year olds on 30 year mortgages is

asset-lending/engineered to fail lending. We agree with Denise Brailey’s Banking & Finance Consumer

Support Association. Their tireless work is recommended reading.

Reverse Mortgages:

Have you looked into how much these reverse lenders get of your house in no-time? In 5 years a $350,000

loan for a nursing home bond becomes a 50% share in a house worth $1.5m. Then the healthy spouse

needs a nursing home bond too, there goes the rest of the assets.

This racket is a racket.

Ask the Actuaries.

Abuse of “Without Prejudice” Mediation Schemes:

A bank “ducked into” a bank-run “without prejudice” mediation scheme when we think they realized that

dots were being joined up on things that look very similar to the foreign corrupt practices cases that the

American SEC is using on foreign banks. We think the Banks are too willing to use “without prejudice”, gag


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clauses and ‘we reserve the right to get you if you go to Adele Ferguson ” clauses. There should be a law

against that, we think.


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Please improve Shareholder rights to investigate boards and claw back bonuses.

Too often the Business Judgement Rule reads like “Oh well, we got caught this time but its only

shareholders money”.

Is the Financial Ombudsman “Arbitration” Scheme “Ltd Liability LTD corporation) part of the

engineered default protection racket?


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We asked ASIC to look into their sub-agent mediation service, FOS, because ASIC should make sure that

Bank run Arbitration Schemes don’t side with the banks in the same way as US Prosecutors think their

bank arbitration schemes were.

We think FOS was infiltrated, “re interpreted” its Arbitration Clauses, “selects” judgements to use that are

pro bank, ….all like the US Prosecutors put as Amicus Curiae Intervention Parties in the case that allegedthe lawyers “seminars” were really a conspiracy to form the Mini Me of the InterState Dispute Resolution

Arbitrations in the Transpacific Partnership Treaty.

We also think you should investigate the “CBA Spy Scandal” and if the CBA is suing a confidante of the

whistleblowers on FOS’ internal decisions and “revised” terms of reference.

We think you should have laws to protect whistleblowers, especially now Mr Medcraft’s ASIC wants to

improve bank culture.

You should also pass laws that open up access to Arbitrations to make sure deals are legal and

transparent. There’s little arbitrations and then there’s the TPP Arbitration. We think you should make sure

the TPP Arbitration is not abused.


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The CBA Spy Scandal, and is the FOS’ a “stacked deck” to “side with the banks”?

The CBA Spy Scandal should be investigated especially as we think a bank is paying an executive to sue a

confidante consumer advocate in order to find out his whistleblower sources, like people that Senator John

“James Bond” Williams had at his function.

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FOS & COSL: Yes Senator Mark Bishop was right: you can apply the Civil Illegality Defence to

cases of loan fraud, engineered defaults, breaches of the (Contractual) Code of Conduct etc etc:

Why did the FOS disagree with Senators? Is it part of a bigger Engineered Plan to cover up their actions

with Fos?


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After all, every PR Executive must love to go an tellie to say “But FOS agreed with us (because we really

do own it).

We believe that FOS and farm debt mediation schemes should be investigated for stacking the deck as

part of a collusion racket that conceals the engineered defaults and other bad banking practices.

Yours,

Supported Residents Carers Action Group Inc.

'Engineered' defaults in the spotlightDate

June 4, 2015

Adele Ferguson

Business columnist

http://www.smh.com.au/business/by/Adele-Fergusonhttp://www.smh.com.au/business/by/Adele-Fergusonhttp://www.smh.com.au/business/by/Adele-Fergusonhttp://www.smh.com.au/business/by/Adele-Ferguson


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The slump in the big four banks' share price has fuelled a heated debate over the outlook for them. Photo: Jesse Marlow

On Thursday morning, a new parliamentary inquiry wasquietly unveiled with a set of bombshell terms that willsend shivers down the collective spines of the banks,

property valuers and liquidators.

The inquiry, to be headed by Senator David Fawcett, has put together a wide-ranging terms ofreference that will target loan defaults, and whether the banks deliberately engineered some ofthem to sell people up – people who had never missed an interest payment.

It is an allegation that has long dogged the Commonwealth Bank of Australia when it took overBankwest in 2008 during the global financial crisis. In a 2012 senate inquiry into post GFC banking, more than 150 submissions were received from Bankwest customers that told stories of a bank that "engineered" defaults.

Illustration: Kerrie Leishman.


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Indeed, earlier this year in a late-night speech to parliament, Liberal senator Alan Eggleston letloose on CBA and Bankwest and called for a public inquiry into its behaviour. He alleged CBA ofdeliberately defaulting some of Bankwest's business customers for its own commercial benefit.

He said information had been brought to his attention that could lead a court to conclude that

"CBA had a predetermined outcome it needed to achieve, and it opportunistically capitalised onBankwest's dire financial situation by manufacturing defaults on certain customers to engineer theresult that it wanted".

"If it is true that the CBA got a price reduction exactly equal to the gross value of impaired loans in2008, then this means CBA paid zero cents in the dollar for those impaired loans," SenatorEggleston said.

CBA has denied any wrongdoing. However, these allegations will undoubtedly resurface in thisinquiry, forcing senior bank executives to explain themselves and certain documents that will besubmitted to parliament.

Other banks, including ANZ, National Australia Bank, Westpac and others won't escape theinquiry's scrutiny. ANZ received attention over its treatment of farming families tossed off theirstations by the big banks. In some cases it is alleged that the prices the properties sold for were low ball.

It is why the terms of reference include a clause that says evidence will be taken on "the effect ofthe forced sale of property in depressed market conditions and drought, and comparisons betweenvaluations and sale price".

Veteran Liberal MP Philip Ruddock, one of the members of the parliamentary inquiry, said a key

focus of the inquiry would be constructive default. "At times it appears some financial institutionstake the view you can engineer or create a default and use it then to sell people up when in fact theyhave been repaying their interest and when they still have adequate security."

Ruddock said the inquiry would look into how the banks might use "constructive defaults" toimpair loans. This could include getting the loan revalued to change the loan to value ratio (LVR),the role of property valuers in this process and insolvency practitioners who are appointed to adefaulting business.

It is something Nationals senator John Williams has also been concerned about for years. SenatorWilliams said he was "extremely concerned when companies and businesses go under due to

extreme pressure from the banks and financiers when they have not missed an interest payment".

He said he was interested in section 420(a) of the Corporations Act, which refers to receiversselling up assets seeking the highest price. Senator Williams said there were too many cases whereassets are sold on the cheap. "Does this part of the act need to be changed? We will look at this,"he said.


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This will embroil the liquidation in the inquiry, an industry that has been accused through the yearsof being riddled with conflicts of interest, charging excessive fees, lacking transparency, prolonging liquidations to collect the fees and hiring property and other valuers to give them avaluation that is well below market value. The asset is then sold to another client.

Senator Williams has been leading the push for change in the insolvency industry and spearheadeda senate inquiry in 2010. Some profound recommendations were made but the then Ruddgovernment and now the Abbott government sat on them.

This parliamentary inquiry – and the evidence that will be heard – will hopefully push the Abbottgovernment to instigate some proper reforms – not a few tweaks, as is being proposed.

With so many problems and criticisms, it is not surprising liquidators have been the focus of atleast seven inquiries in the past 25 years.

But in terms of inquiries and investigations, the banks are in a league of their own. If it isn't

financial planning scandals, it has been a long-running investigation by the regulator into possiblerigging of bank bill swap rates.

In the process CBA, National Australia Bank and ANZ have had their reputations damaged bytheir treatment of customers of their financial planning divisions. It has prompted the regulator tostudy culture to try to find a way to rein in some of the problems that are rocking confidence in thesystem.

The latest inquiry, which will take submissions until July 24 and report next March, is another turnof the screw.

Senator Fawcett re Liquidators Senate Inquiry Engineered Defaults

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Transcript of Senator Fawcett re Liquidators Senate Inquiry Engineered Defaults