The bank and the visa scheme
- Leonie Wood
- November 27, 2007
- Page 1 of 2
RAJ NARAD must have made lots of friends through his business dealings. Easy finance was his specialty: home loans, business loans, low-doc loans. And from his office in Melbourne's West Footscray, he also ran a surprisingly strong trade in extending a helping hand to hopeful immigrants from the Indian subcontinent.
At least 227 young men and women from India appear to have called on Mr Narad in the past 18 months, all desperate to vault that last hurdle in their immigration applications: each needed just five more points of qualification to secure a residency visa under the Federal Government's general skilled migration program.
One way of garnering those extra points was to secure a letter of reference or other evidence showing the visa applicant had been employed for at least six months in Australia. And as the journalist Heather Ewart revealed on The 7.30 Report in November last year, there were a few migration agents in Melbourne's western suburbs who, for several thousand dollars, could organise fake employer documentation.
Another option was to provide immigration authorities with evidence the visa applicant had invested $100,000 for at least 12 months in an approved government security, such as treasury bonds. Never mind that $100,000 may have been a fortune to some aspiring migrants; Mr Narad was an agent who could help them out for a relative pittance.
Conveniently, his friend and business associate Akshay Batra was a lending manager at National Australia Bank's Moorabbin East business banking centre. Loans could be arranged, treasury bonds bought, and if all else went well Indian nationals could soon be flashing residency visas in their passports.
Documents before the Federal Court show Mr Batra set up quasi-overdraft facilities called Flexi-plus and Business-plus accounts for the visa applicants.
With little or no documentation, Mr Batra allegedly approved the loan facilities, then drew down sums in multiples of $100,000, drafted bank cheques for those amounts and used the cheques to buy bonds from state-based treasury corporations in NSW, South Australia, Queensland and the Northern Territory.
In less than 15 months, 227 of Mr Narad's immigration clients had become the nominated holders of $22.7 million of treasury bonds, all financed with NAB's funds.
Yields on the 12-month bonds would mostly cover the interest rate on the loan accounts, but some of Mr Narad's clients also deposited several hundred dollars a month into NAB accounts set up by Mr Batra. Funds would be routinely shuffled from one loan account to another to ensure none went into arrears.
This artfully simple scheme began to unravel just weeks after Mr Batra flew to India in late August for what NAB thought was extended unpaid leave.
In October an NAB colleague noticed that several loan accounts supervised by Mr Batra had fallen into arrears and mail related to those loan accounts had been returned to the bank undelivered. The alarm bells went off when the bank's fraud investigators realised there were almost no documents supporting the loans - no applications and no titles or bond certificates relating to the assets that secured the loans.
NAB's fraud investigators were called and on November 2, with several of the 12-month treasury bonds due to mature, the bank obtained court orders freezing the treasury bonds.
A week later the bank returned to the Federal Court and secured orders allowing its lawyers to search Mr Narad's home and offices. It seized manila folders and files relating to loan accounts, handwritten notes, photocopies of bank cheques and documents relating to treasury bonds.
In the Federal Court tomorrow, Justice Mark Weinberg is scheduled to hear if Mr Narad or Mr Batra want to make any claim over the documents seized.
Victoria Police's fraud squad has been alerted, as have investigating officers from the Department of Immigration and Citizenship and the Australian Federal Police.
Earlier this month, Justice Weinberg warned NAB's lawyers they should be alert to the possibility Commonwealth immigration laws may have been breached and criminal charges may eventually be laid.
NAB's investigations are continuing, but so far it has not lost track of any of the $22.7 million.
The bank believes it has isolated all of the accounts operated by Mr Batra in relation to the visa scheme and identified all the bonds he purchased. It is also examining if any of its lending officers elsewhere in Australia had a similar propensity for acquiring treasury bonds with no-doc loans.
At this stage, NAB is not accusing Mr Batra of anything higher than breaching his duty as an employee.
As for the 227 visa applicants, not all have received residency visas yet, but government officials believe the people behind the treasury bonds visa scheme may be associated with at least some of the agents who engineered the immigration rort identified by The 7.30 Report a year ago.
Mr Narad did not respond to requests for comment.
Mr Batra remains in India. He did not respond to a request for comment and his lawyer, Paul Galbally, of Galbally & O'Bryan, declined to comment.
http://www.businessspectator.com.au/bs.nsf/Article/NAB-slammed-in-227m-visa-fraud-94KFB?OpenDocument
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