Two families have lost their homes and eight others are paying higher mortgage payments than they should after falling victim to a $3.9 million mortgage scam.
Ramni Kumar, who was at the centre of the fraud, was sentenced in the Auckland District Court on Wednesday to one year of home detention and 250 hours' community service.
Judge Russell Collins said the 46-year-old woman and an associate controlled a company that would buy up cheap residential properties. Kumar would then set about inflating the prices with valuations and on-sell the properties - usually to first-home buyers.
But in order to get finance for the buyers, she used fake documents intended to fool the banks into believing that deposits had already changed hands and that the lending was safer than it actually was.
The court was told how Kumar kept some of the money for herself on each of the sales and over the 10 deals made $163,000. The bank ended up paying out more than $3.9 million for the mortgages.
Judge Collins said the fraud was only brought to an end when the BNZ made a complaint to the Serious Fraud Office.
Kumar later pleaded guilty to 10 charges of fraudulently using a document.
SFO prosecutor Paul Mabey QC said the BNZ has to deal with documents at face value and has to be able to trust people.
According to a victim impact statement filed by the bank, two first-home buyers have not been able to keep up with their mortgage payments. One property has been sold at a $33,000 loss; the other is about to be settled with a likely loss of $20,000.
Judge Collins said those two victims have suffered a tragic loss as a result of Kumar's greed. He said the other eight buyers are paying far more in mortgage payments than they should because their properties were overvalued.