Westpac says NAB is hindering Forum fraud probe

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As the Forum Finance bloodbath continues, the big banks are now turning on each other. Westpac has accused National Australia Bank of stymying investigations into the alleged $400 million scam reportedly orchestrated by Forum Finance and its chief, football club owner Bill Papas.

Westpac accused Forum Finance last month of scamming the bank by impersonating its customers, according to a report by The Sydney Morning Herald. Federal Court Justice Michael Lee described the scheme as “a long-running, calculated and elaborate fraud which would rank high in the catalogue of corporate malfeasance.”

Now, Westpac is claiming that NAB is frustrating its efforts to investigate the alleged fraud due to NAB’s longstanding relationship with Papas’ company. Westpac said in court documents that one of its Financial Crime and Fraud Prevention team members contacted NAB on June 22 to report the scam. The Westpac employee asked NAB to halt transactions on a Forum Finance account, the Herald reported.

“At this time, [the Westpac employee] was advised by NAB that the account was ‘stopped’ and that they would question their customer in relation to the transaction,” Westpac said.

However, three days later, a senior Westpac employee found that NAB had not fulfilled the request, the Herald reported.

“[The Westpac staffer] informed me that NAB had told him that [the] account was in the name of Forum Finance Pty Limited, that NAB had a long-standing customer relationship with Forum Finance, had not placed a hold on that account and would need an email with particulars of the fraudulent transactions to place a hold on the account,” Westpac’s lawyer said in court documents.

Read more: Westpac to brief regulator on alleged Forum fraud

NAB sources told the Herald that the bank believed it had to protect its customers. They said the bank had previously demanded that fraud victims of its customers detail the exact transactions at issue and details of the alleged fraud before considering halting transactions on an account.

It is not clear why NAB initially assured Westpac it would place a hold on the Forum account and then failed to do so. Sources at NAB said the bank disputed Westpac’s allegations that it gave those assurances, the Herald reported.

NAB was the bank of choice for Forum Finance, Papas, and Papas’ business partner, Vincenzo Tesoriero, and provided credit cards and loans to secure Forum’s property, according to the Herald.

Ryan SmithRyan Smith is currently an executive editor at Key Media, where he started as a journalist in 2013. He has since he worked his way up to managing editor and is now an executive editor. He edits content for several B2B publications across the U.S., Canada, Australia, and New Zealand. He also writes feature content for trade publications for the insurance and mortgage industries.
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