Analysis
39The evidence of the lenders' director, Mr Michael Foy, was that he had met the Accused in 2008 when their children were playing soccer for the same club. The Accused had introduced himself as a mortgage broker and an association developed whereby the Accused offered Mr Foy better returns on funds than Mr Foy has been earning on his investments. The first transaction involved short term lending for a principal sum of $70,000 with an interest rate of 6% per month. Apparently, the Accused produced a loan agreement prepared by lawyers retained by him, which had already been executed by the borrowers, and Mr Foy executed the documents and arranged for the transfer of funds into the Accused's business account, WC Financial Services, there being a verbal agreement that the Accused would attend to providing the funds to the borrowers himself. Mr Foy conceded that it was this transaction that set the precedent for the three loans, the subject of the charges, which followed. I gathered from his evidence that since the Accused had been timely in repaying the principal and interest in the antecedent loan, Mr Foy was comfortable in dealing with him for the subsequent loans.
40The subsequent three loans were based on similar terms, except that Mr Foy, on behalf of the lenders, retained his own lawyer, Mr George Gourlas, to act for the lenders on those transactions. Whilst I accept that there is a market for short-term loans, the interest terms in the respective loans defy logic. There was no cogent evidence to suggest that the borrowers, mortgagors and guarantors purportedly involved in these transactions had any need for short-term finance or would have had difficulty obtaining finance from mainstream lenders.
41The Vaxavanis loan documents provided for a loan amount of $120,000 over a term of three months, security in the form of a second registered Mortgage over the family home, but in the interim a Caveat to be registered on title, an interest rate of 72% per annum accruing at 6% per month ($7,200 per month), and a margin of 3.5% per month over and above the monthly interest rate in the event that the loan was in default.
42The Azzam loan documents provided for a loan amount of $400,000 over a term of three months, security in the form of a second registered Mortgage over the family home, but in the interim a Caveat to be registered on title, an interest rate of 108% per annum accruing at 9% per month ($36,000 per month), and a margin of 3.5% per month over and above the monthly interest rate in the event that the loan was in default.
43The Abouhaidar loan documents provided for a loan amount of $70,000 over a term of three months, security in the form of a second registered Mortgage over the family home, but in the interim a Caveat to be registered on title, an interest rate of 96% per annum accruing at 8% per month ($5,600 per month), and a margin of 3.5% per month over and above the monthly interest rate in the event that the loan was in default.
44Notably, it was Mr Foy's evidence that in relation to the three loans the subject of the charges, no capital repayments have been made in reduction of the principal sums lent, although he did receive cash payments from the Accused representing the first month's interest payments required to be made by under the respective loan agreements up front. He gave evidence that he did receive a cheque in the sum of $20,000 from the Accused, drawn from the Accused's business account, which was to be for principal, but which was dishonoured.
45It was Mr Foy's evidence that of the 9% interest payable under the Azzam loan, 3% would be remitted to the Accused as payment by the lender for brokerage fees. It was not entirely clear whether the same proportion of interest was to be remitted to the Accused in respect of the Vaxavanis and Abouhaidar loans.
46Evidence was given by Ms Stella Kitson, the daughter and carer of, and donee under a Power of Attorney from, Mrs Frida Vaxavanis. Ms Kitson described her mother as being a 77-year-old lady who could not speak English very well, could not read or write English, suffers from diabetes and a heart condition, and is in a fragile state. As her mother's carer, her evidence was that her mother was significantly dependent upon her, with Ms Kitson attending to her banking needs, paying her bills, renewing insurance policies and looking after real estate owned by her mother. Ms Kitson gave evidence that her mother would not have been able to execute any of the Vaxavanis loan documents without her assistance and, having seen her mother sign documents many times over the years, the signatures and initials said to be her mother's on the Vaxavanis loan documents did not resemble her mother's true signature and initials.
47More relevantly, however, Ms Kitson gave evidence that her father, Mr Hercules Vaxavanis, passed away in 2006. The only rational inference to be drawn from the signatures and initials on the loan documents said to have been signed by Mr Vaxavanis in May 2009 is, plainly, that they are a forgery. It became apparent to Ms Kitson that a fraud had been perpetrated and "money had been obtained in my father's name". The Vaxavanis documents tendered into evidence as part of Exhibit 7 include a letter of demand dated 10 November 2009, forwarded by the lender's solicitor, Mr George Gourlas, to Mr and Mrs Vaxavanis, seeking repayment of the principal and interest, by that stage having reached $175,800, failing which the lender would exercise its power of sale.
48Another salient feature of the signatures of Mr and Mrs Vaxavanis on the Vaxavanis loan documents is that they purport to be witnessed by Mr Nick Manolios. Whilst there is evidence from Mr Abouhaidar that Mr Manolios was Mr and Mrs Abouhaidar's family accountant, there is no evidence that Mr Manolios was the accountant for Mr and Mrs Vaxavanis or that he was in any way associated with them. The irresistible, and indeed compelling, inference that flows therefrom is that the signatures of the witness, said to be Mr Manolios, are also forgeries.
49The evidence of Mr George Abouhaidar was that he met the Accused through a friend in 2008/2009. He and his wife were considering refinancing their home loan of $720,000 from their then lender to St George Bank, using the services of the Accused as mortgage broker. At about the same time, he was also seeking to borrow the sum of $70,000. It was not entirely clear from the evidence whether that was incorporated in the $720,000 refinance amount he was considering or in addition to it. I understood, from his evidence, that in addition to the first registered mortgage secured over his home in favour of his then mortgagee, he also had a loan secured by way of a Caveat registered on title in favour of Circuit Finance Australia Limited ("Circuit Finance"), in respect of which an amount of $20,000 remained outstanding and had he and his wife proceeded with the $720,000 loan from St George Bank, the refinance would have covered the $20,000 owing to Circuit Finance and would have left him with surplus funds with which to extinguish some other debts.
50At the time of these events, Mr Abouhaidar and his wife received from the Accused loan documents with Speedy Gantry Hire Pty Limited ("Speedy Gantry") listed as lender/mortgagee for a loan of $70,000. His evidence was that he did not want to obtain a loan through Speedy Gantry and, ultimately, after conferring with, and obtaining advice from, his accountant, Mr Nick Manolios, in relation to the Abouhaidar loan documents, he and his wife did not proceed with the refinance to St George Bank or the loan from Speedy Gantry. He emphatically denied signing the Abouhaidar loan documents and stated that none of the signatures appearing on those documents were his or his wife's. I accept his evidence on this point and conclude that the signatures purporting to be his and his wife's and the signatures purporting to be his accountant's, as witness, were forgeries. It became clear to him that something untoward had taken place when he discovered that a Caveat in favour of Speedy Gantry had been registered on the title to his family home.
51A remarkable feature of his evidence was that he readily conceded playing the part of interpreter in the Azzam documents said to have executed by Mr and Mrs Azzam as mortgagors and guarantors. There was no evidence to suggest that he was an accredited Arabic speaking interpreter. He accepted that he executed, as interpreter, a document entitled Interpreter's Certificate (part of Exhibit 5), which contained an acknowledgment that he translated, from the English language to the Arabic language, and explained to Mr and Mrs Azzam in Arabic, the Loan Agreement, Mortgage and Guarantee and Indemnity, and that they executed the documents in his presence and appeared to understand the nature and effect of the documents and their obligations thereunder. He frankly admitted that Mr and Mrs Azzam were not present when he translated the documents, despite the acknowledgment.
52The inference to be drawn, when reconciled with the evidence of Mr and Mrs Azzam, is that the documents bearing the signatures purporting to be Mr and Mrs Azzam's were forgeries and were not witnessed by Mr Abouhaidar in their presence. I do not believe that Mr Abouhaidar forged Mr and Mrs Azzam's signatures, nor was this suggested. I do, however, believe that the signatures appearing as witness on the Azzam loan documents are indeed Mr Abouhaidar's and that he did not witness Mr and Mrs Azzam execute any of the documents.
53Despite Mr Abouhaidar's admissions, his oral testimony was completed by asserting that he did not know, but had since become aware, what he was asked by the Accused to sign in relation to the Azzam loan, believing that he was simply executing a document to assist Mr Mark Anthony in obtaining a loan. I do not accept this part of his evidence.
54An inference that flows from Mr Abouhaidar's admission of impropriety, in the adoption of the clearly inconsistent acknowledgments in the Interpreter's Certificate and the execution of documents as witness without the signatories being present, is the likelihood that he may have acted in collaboration with the Accused in at least one of the offences with which the Accused has been charged, namely that surrounding the Azzam loan. There is, however, an exiguousness of evidence to definitively ground such a conclusion and, accordingly, I do not propose to pursue this further in these reasons.
55Evidence was also given by Mrs Monica Abouhaidar that generally corroborated the evidence given by her husband to the extent that she too emphatically denied executing the Abouhaidar loan documents and stated that none of the signatures appearing on those documents were hers. I accept her evidence on this point and conclude that the signatures purporting to be hers and her husband's and the signatures purporting to be that of her accountant, Mr Nick Manolios, as witness, were forgeries. It became apparent to her that there was an irregularity when she attended her solicitors' office with a bank cheque for $20,000 in order to discharge the loan secured by Circuit Finance over her home and discovered that the loan had already been repaid by the Accused, without her knowledge or direction, and without her having provided the Accused any funds within which to discharge the loan or to obtain a Withdrawal of Caveat arising therefrom. The only rational inference, in my view, to be drawn from this evidence is that the Accused attended to the discharge of the loan secured by Circuit Finance in order to pave the way for the registration of the Caveat in favour of Speedy Gantry over the family home of Mr and Mrs Abouhaidar and the effectual drawdown of the loan the subject of these proceedings, which was deposited into the Accused's account.
56Both Mr and Mrs Azzam gave evidence with the assistance of an Arabic speaking interpreter. Their statements to police, both dated 19 January 2010, were tendered into evidence and were fairly consistent with the evidence thus far. They denied applying for a loan or executing any loan, mortgage or guarantee documents. In fact, their home had been unencumbered since 1997. They denied executing the mortgage and guarantee documents creating an interest in favour of Speedy Gantry, nor did they know who did. They emphatically denied executing the Azzam loan documents and stated that none of the signatures appearing on those documents were theirs. I accept their evidence on this point and conclude that the signatures purporting to be theirs were forgeries. It became abundantly clear to them that something untoward had taken place and that they had been the victims of fraud when they received a letter of demand from the lender/mortgagee seeking repayment of the principal loan and interest which, by that stage, had reached about $544,000.
57Whilst they both denied their son, Mr Mark Anthony, having any involvement in obtaining the loan secured over their family home, in the statement made to police by Mrs Azzam (Exhibit 11), she stated that her son left the house at around the time of these events and never returned. I accept that whilst this admission might be indicative of some indiscretion on the part of Mr Anthony in relation to the predicament in which his parents were now placed, there is an exiguousness of evidence to definitively ground such a conclusion and, accordingly, I do not propose to pursue this further in these reasons.
58Much like the Vaxavanis loan, there is another salient feature in relation to the signatures of Mr and Mrs Azzam on one of the documents comprised as part of the Azzam loan document, namely the Declaration by Third Party Mortgagor, Guarantor, Surety Mortgagor or Indemnifier for the Borrower. That document purports to be witnessed by Mr Nick Manolios. Whilst there is evidence from Mr Abouhaidar that Mr Manolios was Mr and Mrs Abouhaidar's family accountant, there is no evidence that Mr Manolios was the accountant for Mr and Mrs Azzam or that he was in any way associated with them. The irresistible and, again, compelling, inference that flows therefrom is that the signature of the witness, said to be Mr Manolios, is also a forgery.
59Evidence was also given by Mr Mark Anthony who stated that he had known Mr Abouhaidar since his school years. He was at, the time of these events, trying to obtain a loan. Mr Abouhaidar introduced him to the Accused and a meeting took place whereby the Accused requested $3,000 from him, to be deposited into the Accused's TAB account. As he did not have the funds, he told the Accused to disregard his request for assistance to secure a loan. He recalled that some days later, Mr Abouhaidar, of his own volition and without any instructions from Mr Anthony, had arranged for someone to pay the $3,000 to the Accused on Mr Anthony's behalf. As the money was "put up for [him]", the Accused and Mr Abouhaidar took Mr Anthony to a Mr Peter Antoniou, solicitor, and, under threats to his life in the foyer, Mr Abouhaidar and the Accused forced Mr Anthony to execute the loan documents in the solicitor's presence. The execution clauses on the documents where his parents, Mr and Mrs Azzam, were to sign were still blank at that stage, although he too, when shown the documents in evidence agreed that the signatures which subsequently appeared did not resemble the signatures of his mother and father.
60Some days later, Mr Anthony recalled Mr Abouhaidar telling him "not to worry" and that he had "some money coming his way" which "he did not want his wife to know about" and asked if he could deposit the money into his (Mr Anthony's) account. In what appeared to me to be somewhat unusual, Mr Anthony agreed and was "happy to help". In the days that followed, they took him accompanied to various branches and withdrew money from an account in Mr Anthony's name and Mr Abouhaidar purchased a ticket and travelled to Argentina. He denied receiving any of the funds from the Azzam loan drawdown, including any of the funds that were deposited into an account with BankWest apparently opened in his name.
61I gathered from Mr Anthony's evidence that he was vulnerable and it seems that vulnerability was not lost on those with whom he came into contact. I believe he was threatened by the Accused and that he was used as a means to achieve an end.
62Following the close of the prosecution case, I found a prima facie case and the Accused went into evidence.
63The Accused was, for "five, six or seven years", a finance and mortgage broker, trading as WC Financial Services. It was his evidence that he was "not qualified", although the I accept that the Australian mortgage broking industry has yet to be regulated in any significant way, as was the case with the financial services industry over the last decade, with the amendment of the Corporations Act 2001 (Cth) to insert Chapter 7, dealing with financial services and markets, and the introduction of stringent rules and the necessity for those engaging in that industry to obtain financial services licences. Needless to say, the Accused had, over the years, obtained experience in the workings of loan transactions arising from deals which he had brokered on behalf of lenders and borrowers and, on his own evidence, "getting finance for properties" and "short term loans".
64A pertinent feature of his evidence was that, having opened an account with BankWest in November 2008, he used that account to "facilitate loans". He conceded that the three transactions of which the present charges form part, and one transaction immediately preceding the three in question, were the first occasion on which he had control of the funds.
65According to the Accused, the agreement reached with the lenders' director, Mr Michael Foy, was that the Accused would receive the funds from each loan drawdown and would disburse the funds at the borrowers' request. Mr Foy gave evidence that the there was a verbal agreement reached that the funds would be disbursed to the respective borrowers after drawdown. One cannot overlook the volatility of this procedure which effectively put the Accused in control of large sums of money in circumstances where a mortgage broker's role, if one accepts this was the role the Accused played in these transactions, is to facilitate, as an intermediary, negotiations and secure the appropriate property finance loan between a mortgagor and mortgagee, not to receive the loan proceeds from the drawdown into his business account and to disburse them therefrom.
66There is nothing, in my opinion, which forbids the practice in which the Accused engaged, but what became clear from the evidence was that the process was readily susceptible to abuse and the lender unwittingly facilitated a state of affairs that ultimately culminated in the charges laid against the Accused. That, however, in no way suggests that the lender was complicit in the fraud perpetrated upon the unsuspecting borrowers, mortgagors and guarantors. The inescapable conclusion is that the Accused was emboldened by the ease with which he was able to take control of the funds and, by virtue of the immediately preceding transaction, gained Mr Foy's trust and confidence in continuing to do business with him. The Accused's level of participation in the respective transactions transcended the boundaries of professional expediency and entered a state of frenzied interest and enthusiasm in securing and procuring the drawdown of the loan proceeds by electronic funds transfer directly into his account.
67The Accused denied all impropriety. There were a number of acts on the part of the Accused that, on their own, seem innocuous, but when taken together, should have raised warning bells. The Accused personally collected loan documents from the lenders' solicitors; personally returned documents said to have been executed by the various borrowers, mortgagors and guarantors to the lenders' solicitors; escorted the purported borrower, Mr Mark Anthony, to a solicitor's office for the execution of one set of loan documents; prevailed upon the purported borrower, Mr Mark Anthony, to utilise the services of the Accused's chosen solicitor to execute loan documents; personally attended to the drawing of a bank cheque from his own account for the payout of an existing loan with an unrelated lender, secured by Caveat over the title to the property owned by the purported borrowers, Mr and Mrs Abouhaidar, and paid out that loan, and procured and obtained from that lender a Withdrawal of Caveat in registrable form, paving the way for the registration of the Caveat in favour of Speedy Gantry over the family home of Mr and Mrs Abouhaidar to regularise the drawdown of the loan the subject of these proceedings; and personally attended to some repayments to the lender of interest and legal costs and disbursements out of the loan proceeds deposited into his account.
68One of the documents most notably absent, and which casts a dark shadow upon the Accused's evidence, was a direction to pay, a document commonly executed by borrowers and mortgagors prior to loan drawdown informing lenders and mortgagees of the persons or entities in whose favour the loan proceeds are to be drawn. Indeed, nor was there a direction to pay from any of the borrowers and mortgagors to the Accused to inform him of what their intentions were, if one accepts the Accused's evidence, with the loan proceeds once they were deposited into his account.
69The apex of the Accused's exculpatory revelation was his uncorroborated oral testimony that the respective borrowers and mortgagors verbally authorised him to receive the loan proceeds from the various transactions into his business account, retain large sums of money for his brokerage fees, in one case on his own evidence $30,000, in what could only be described as exorbitant and indicative of his avarice, and to deal with the proceeds on their behalf. What that precisely meant was a mystery. In one case, the Accused gave evidence that Mr Peter Vaxavanis, the son of the purported borrowers, Mr and Mrs Vaxavanis, gave the Accused instructions to have a large sum of cash from the loan proceeds ready for collection by the girlfriend of a Mr Peter Megaloudis, as Mr and Mrs Vaxavanis senior were supposedly putting their property up to help their son's friend, Mr Megaloudis. In fact, the Accused alluded to all of the borrowers being introduced to him by Mr Peter Megaloudis and deflected a lot of the blame attributed to him in cross-examination to the sons of the mortgagors, namely Mr Mark Anthony and Mr Peter Vaxavanis, who were instrumental in the motivation behind obtaining these loans. On the Accused's evidence, it was these persons who instructed him as to where the loan proceeds were to be applied, despite, if it were true in Mr Peter Vaxavanis' case, that he was not the borrower on any of the loan documents and in no position to direct anyone as to how the loan proceeds were to be applied. I gathered from the evidence that these transactions were part of a much larger ring of deception.
70Interestingly, the Accused had no involvement, nor indeed was there any evidence to suggest that he even met the purported borrowers, Mr and Mrs Azzam and Mr and Mrs Vaxavanis. He gave evidence that he had had discussions with the respective sons of Mr and Mrs Azzam and Mr and Mrs Vaxavanis and that he had had discussions with the purported borrowers Mr and Mrs Abouhaidar. As far as I could gather, none of the purported borrowers and mortgagors received any of the loan proceeds, but for the possibility that Mr Mark Anthony received some money into an account opened in his name at the same BankWest branch at which the Accused banked in order to facilitate a transfer of some money into his account. As stated earlier, Mr Anthony denies receiving any money.
71By far the most alarming part of the evidence was that the given by Ms Stella Kitson, the daughter and carer of, and donee under a Power of Attorney from, Mrs Frida Vaxavanis, a 77-year-old lady who could not read, write or speak English, suffers from diabetes and a heart condition and is in a fragile state. It transpired that not only did her mother not take out a loan secured over the family home, based on loan documents purportedly executed by her mother and father as co-borrowers and co-mortgagors, but that, whilst her father's name was still on title as a registered proprietor of the family home, her father had actually passed away in 2006, some three years before the forged loan documents purported to convey their acceptance of a loan for $120,000.
72The fact that the Accused might not have met some of the persons said to be have been the borrowers, mortgagors and guarantors under the loan documents does not necessarily mean that there is no causal connection. On a proper analysis of the evidence, the requisite causal connection is established because the acts in which the Accused engaged and which I find constitute deception are inextricably linked to the money obtained.
73He attempted to explain away many of the inconsistencies in his evidence. He gave evidence as to each of the deposits and withdrawals appearing in his bank statement (Exhibit 2) and, relying wholly upon his memory, sought to explain the source of each deposit and the persons to whom each of the withdrawals were delivered. Most of the withdrawals, he said, were cash withdrawals in payment of legal fees and disbursements to solicitors and accountants, and to the lenders for interest repayments arising from the loan transactions. Some of the larger sums were withdrawn, supposedly at the request of the various borrowers and their sons as I have referred to earlier, and given to Mr Abouhaidar, Mr Anthony, and a substantial sum to the liquidators of the Watersedge Resort, an entity which the Accused said was related to Mr Peter Megaloudis and, according to his evidence, from which some of the documents adduced, such as Interpreter's Certificate, were faxed, noting the "fax header". I noted from the bank statement of the Accused's account adduced into evidence that many of the smaller withdrawals were made from automatic teller machines within TAB betting venues.
74Much of his evidence was circuitous. His responses to the questions asked of him in the transcript of his record of interview were obfuscatory. He stated, in response to Q98 of the record of interview, that he "had no reason to believe that all the people I've described at the signing of the documents weren't there" and that they "were the people signing the documents" as required. I do not accept this to be the case.
75He was asked in Q110 of the transcript of his record of interview why he did not give the $400,000 to Mark Anthony, seeing as he was the borrower, to which he responded, "[b]ecause that wasn't his instructions. His instructions were um, half through his account and the other half as cash and interest and to pay [various people] ...They were all by Mark's directions [sic] told me to go and fix them all up." I do not accept this evidence nor that these were the directions given to him by Mr Anthony.
76When asked in Q116 of the transcript of his record of interview whether he had any written directions from any of the borrowers or mortgagors, he responded, "I have some written directions." He was asked in Q118 whether he had a direction, written document or formal document from Mr Anthony, to which he responded, "No, I don't. But I'm, I'm fifty, fifty per cent sure that I might have something in a text." I understood this to mean a phone text message. He did say in his oral evidence that he kept a record of the Azzam loan transaction but that he was unable to find it because it was in storage. He had access to it but did not have it with him in Court.
77The Defence case was generally in accordance with the Accused's response to Q195 of the transcript of his record of interview wherein he stated, "I was very loose with what I was doing but I still maintain that I did the right thing and what I was told. And um, at all times I had the lenders lenders um, ah, what's the word, oh, the lender's actions. I was, I was, you know, as far as I was concerned I was doing the right thing by the lender."
78In assessing the Accused's evidence, I concluded that he was an unreliable witness. He was goal oriented, equivocal, and self-serving. His evidence lacked credibility and plausibility. It was markedly inconsistent with the tenor of the surrounding evidence. Whilst there were some parts of his evidence that were conceivable, I did not generally find him to be a witness of truth and reject most of his explanations.
79The evidence of Mr George Gourlas, solicitor, did not add all that much to the proceedings other than to give an account of the documents which he prepared as the lenders' solicitor.