The Commonwealth Bank of Australia (CBA) has alerted authorities to a possible fraud racket that obtained approximately $1 billion in illegitimate home loans, including through the use of artificial intelligence.<\/p>\n
In what could be the largest fraud case against Australia\u2019s biggest bank, CBA is reviewing how many suspicious loans were fraudulently obtained.<\/p>\n
The bank reported itself to police and the corporate watchdog after two whistleblowers last year lodged complaints via CBA\u2019s fraud-reporting platform \u2018SpeakUp<\/a>\u2019, as reported by the Australian Financial Review<\/a> (AFR).<\/p>\n These complaints accused a mortgage broker and a lender in CBA\u2019s private banking division of forging income statements.<\/p>\n One of the whistleblowers reportedly suggested the pair \u201cengaged in document forgery in order to secure home lending approvals\u201d.<\/p>\n Neither the bank or authorities have publicly disclosed how AI may have been used in the suspected fraud racket.<\/p>\n Following an internal review of its compliance practices, CBA called in authorities to determine which loans involved shell companies or were based on fraudulent documents and suspicious deposits.<\/p>\n A spokesperson for NSW Police told Information Age the State Crime Command\u2019s Financial Crimes Squad intends to \u201cmeet representatives from the CBA\u201d sometime this week.<\/p>\n The Australian Securities and Investments Commission (ASIC) declined to comment.<\/p>\n NAB fraud spurs CBA to action<\/p>\n Though CBA was reviewing its loan book as early as July last year, it intensified efforts after news of an alleged $150 million fraud against National Australia Bank (NAB).<\/p>\n Members of the syndicate \u2013 including lenders, brokers and realtors \u2013 allegedly used insider knowledge to acquire loans for luxury properties and other purposes.<\/p>\n The operation, dubbed the Penthouse Syndicate, was allegedly headed by former CBA and NAB banker Andrew Hu.<\/p>\n Though CBA\u2019s first whistleblower reportedly reached out in February 2025, the AFR reported that NSW Police were informed of issues within CBA\u2019s loan book sometime between October and November.<\/p>\n The bank has since updated its loan referral program \u2013 which historically offered commissions to real estate agents and other partners in exchange for customer leads \u2013 to no longer accept referrals from clients who have not already held a loan with the bank for at least six months.<\/p>\n Westpac, ANZ report fraud to police<\/p>\n Though CBA\u2019s latest loan scandal has not been publicly linked to the Penthouse Syndicate, an investigation of the syndicate has reportedly expanded to include the other remaining big banks Westpac and ANZ.<\/p>\n