AUSTRAC probes $4B CBA mortgage fraud
- Financial authorities referred hundreds of industry professionals to police over $4 billion in suspected mortgage fraud.
- Commonwealth Bank shares declined 1.44% to $162.63 amid the expanded regulatory investigation.
- Regulators stated the primary strategy is tightening loan controls to block illegitimate foreign funds from entering Australia.
Financial regulator AUSTRAC investigated Commonwealth Bank (ASX:CBA) and other lenders regarding $4 billion in suspected loan fraud.
The internal review initially flagged $1 billion in irregularities before expanding across five major Australian lenders.
"We've not identified evidence of professional money laundering through home loans," said Commonwealth Bank CEO Matt Comyn.
AUSTRAC stated it received 1,800 suspicious matter reports and issued 200 formal referrals to enforcement agencies.
Anticipating further regulatory scrutiny, following the announcement, the Commonwealth Bank share price was down at $162.63.
The bank previously alerted authorities in February after discovering questionable foreign income verification documents within its network.
National Australia Bank (ASX:NAB) and Westpac Banking Corporation (ASX:WBC) also reviewed similar third-party lending syndicates recently.
