Alex Brooks  0:05  

Pig butchering. It's a brutal name for an even more brutal crime, and it comes from a Chinese term shazhupán, which means killing pig game. The idea: fatten up the victim before slaughter. And while that awful name usually refers to romance scams, it's infiltrated Australian real estate. Digital bank robbers don't just steal hearts. They're stealing Australian home deposits too.

Ken Gamble  0:36  

This has become the most profitable crime on earth because it's such a high profit crime and such a low risk

Alex Brooks  0:43  

Australia's overpriced housing market has been ripe for the taking since reports of this crime first emerged way back in 2018 since then, our home prices have gotten fatter. Our real estate agents and solicitors aren't always keeping home buyer details secure. Low level crime affiliates work in cahoots. One might breach emails to find out who is about to buy a house, and another syndicate member might sell that lead or source the mules who rent or sell their bank account. It's a sausage factory of scamming. Fraudsters no longer cook books. They're making bacon with hacked emails, forged legal documents and misdirected payments targeting Australian real estate. I'm Alex Brooks, and this is episode eight of Daylight robbery real estate butchering. Young Australians trying to buy a home end up trapped, not just by high house prices, but lies loopholes and a system rigged against them. Like most people, I thought scams happened to older Australians who weren't using secure passwords or clicked on bad links. I never imagined. Australian banks, for one minute, allowed thieves to open mule accounts to steal from other customers, until it happened to my son Louis. At the age of 23 Louis thought he was transferring the final settlement money to buy his first home, a $365,000 unit. He paid $109,000 to a thief pretending to be PEXA, the digital clearing house for nearly every property settlement in Australia. The real sting, though, was his own mortgaging bank charge him interest on that money that's stolen, that earns the bank close to an extra $600 a month. They wouldn't have been able to charge had they prevented the payment,

Louis May  2:51  

Because the banks want to say that they're safe and all of that, and knowing that I've got to pay extra money to them, so they're just profiting off the crime as well. So clearly they have no incentive to stop it.

Alex Brooks  3:03  

Louis knows he made a massive mistake. He should have double checked, quadruple checked, the email that arrived minutes after he got off the phone with his solicitor, but the email had referred to exactly what he had just been discussing, Property Exchange Australia or PEXA. Now, was it a coincidence that scammers struck at the perfect moment, or was Louis being spearfished Thanks to artificial intelligence, it's easier than ever to personalize a cyber attack on someone about to make a big purchase. Known as spear phishing, it's how fraudsters gut home buyers from the inside, with real estate agents, building inspectors, lawyers and conveyancers unwittingly leaking home buyers vital personal details through email. Means home buyer frauds are now bigger and more devastating because they are more personal. AI allows criminals to mix and match breached emails from a variety of sources, and then they scan for keywords like settlement date or payment instructions or even PEXA or first home buyer to send a spear phishing attack at exactly the right moment. AI even lets them feed in previous emails from the solicitor or trusted source to mimic the exact writing style to make the fraud feel real. Criminals digitally disguise themselves as solicitors, PEXA banks and other trusted professionals in the home buying chain to deceive the target. Now, banks used to reimburse victims like my son, but not anymore. Banks have known for years how rife financial crime and money laundering has become, and while they promise they are doing more, they still refuse to accept any liability for their role in enabling these crimes.

Louis May  4:53  

There's zero protection, because the banks can profit. You'll find you'll be in a. Well of frustration even trying to get an ounce of money back. I was offered $1,000 by commbank, which was not even 1% of the loss, and they just refuse to pay. There's no justice in the system. They do really blame you for it. They make you feel pretty dumb, and you know, it completely shatters your perception on what you think your wealth building and where your money is.

Alex Brooks  5:24  

Now, my son has always had strange things happen to him. When he was little, he got bitten by a grasshopper, he had allergic reactions to bizarre things, and was obsessed with switches and plugs, which is maybe why he grew up to be an electrician. Ironically, as a curious four year old, Louis managed to set off the alarms at the very same CommBank branch he had to report his home buyer fraud to. As a little kid, he'd switched a PowerPoint on and off so many times that it triggered commbank's security system, shutting down the busy branch in the lunch hour. Now, as a young adult trying to buy a house with the bank, he'd had a Dollarmites and then a youthsaver account with he had no such luck setting off any security or red flags when transferring money to a fake bank account. I assumed Louis' fraud was just one of those weird, freaky one offs that only ever happened to him. But I was wrong. My other son's girlfriend said the same thing happened to her cousin Jess when she was trying to buy her first house. Then I met Ilya Fomin and Levin Salisbury, whose stories I covered in episode one. I was so gobsmacked that this was a thing and not some random one off that I dusted off my journalism hat. I've been working mostly in tech for the last decade, but I went to the National Press Club to ask the Minister responsible for scams exactly what was going on. Why were banks blaming and refusing to refund scam victims, victims like Levin Salisbury, who's asked me to share his story today, he had $91,650 stolen from his Commonwealth Bank Account last year, ironically, by another Commonwealth Bank mule account, and in a letter to Levin offering him $4,582.50 goodwill payment for his loss, the bank told him, and I quote from the letter, the bank is under no obligation to maintain watching briefs for scams for their customers benefits as part of your focus on prevention. Will the banks be forced to stop letting criminals set up mule accounts that do not meet the 100 points of identity that enable all scams, whether they start on social media or telco, and will the banks be forced to refund scam victims. Thanks.

Stephen Jones  7:41  

Great question, and thanks for sharing a personal story.

Alex Brooks  7:44  

By the way, I don't think the minister really thought that was a great question. The ALP Stephen Jones is being hailed a hero for getting new scam prevention laws passed in Parliament. Hey,

Stephen Jones  7:56  

great news, guys, the scam prevention framework bill passed through the house just now, we are on our way to making Australia the toughest country in the world for criminals to make a buck. We've got to get it done. $7 million a day is how much Aussies are losing to these criminal thugs. Let's make this happen, but

Alex Brooks  8:16  

They won't even come into effect until 2026 in the meantime, the banks get away with paying customers measly amounts, literally profiting from crimes. Their platforms aren't safe enough to prevent banks still don't give victims any transparency on where their money has gone. Only investigating police are able to find that out. Police had given up helping Levin when I raised his case at the Press Club, I applied through Freedom of Information laws to get Levin's police files. Then we lobbied his local MP opposition treasurer, Angus Taylor, and we went to the Australian Financial Complaints Authority (AFCA). Police records had confirmed that Levin's mule definitely received his stolen $91,650 and even though the bank recovered around $42,000 to give back to Levin, CommBank allowed the mule to keep the remaining money, which was likely sent offshore to the organized criminals who recruited the mule in the first place. Now I helped Levin write to AFCA to review his case, and it was an absolute journey of hell. Levin became stressed and agitated every time AFCA or his bank contacted him and blamed him for authorizing his own loss. After months of torture where Levin's partner had been imploring him to just move on and forget about the loss, Levin finally reached a confidential settlement with his bank, but it was a horrible experience to try to get any justice. Like every other victim who gets bank reimbursement, Levin has had to sign a gag order, and as his AFCA agent, I had to agree to keep everything we discussed at AFCA confidential, which I have done. Levin is one of the few real estate butchering victims who got any decent reimbursement through AFCA. Remember, the average reimbursement is just two to 4% of the loss, according to ASIC. So the reality is that Australia doesn't only have a housing crisis, we have a real estate fraud crisis too. Cyber criminals are regularly getting huge paydays from people like Levin, Will and Jess, Ilya Fomin, my son and the other couples you are about to meet. I'm

Sarah McCormack  10:34  

Sarah Robinson. I'm living in a rental because of no fault of my own. We've been scammed all of our house deposit for our what we thought would be our forever home.

Laine Robinson  10:45  

Well, I'm Lane Robinson and father of a three, a hard working concreter, The

Alex Brooks  10:50  

couple spent more than a year house hunting for their dream acreage on the Gold Coast. The day before they were set to pick up the keys that dream shattered, Laine's phone rang his conveyancer. Where was the money for settlement? Laine's stomach dropped and panic surged as he tried to get hold of his wife, a nurse stuck at work, 16 patients under her care, no way for her to leave. The walls of their perfect future caving in.

Sarah McCormack  11:19  

It was six o'clock on an evening shift, and Laine rings me just frantic. He said, There's we can't find the money. Sarah, like the conveyancers are saying it's not in the account. And I said, Yes, it is. Like we transferred it two weeks ago. I've got their email communication. I was talking to them for a week telling them that I was going to do it through the bank. And then once we had transferred the money, I had the confirmation email saying we received funds. Sarah, so it's all clear. And I thought it was all fine. And then so Laine said, You need to find those emails. You need to send it through to me. We did. I sent it through to lane miles at work. And then he rang back an hour later and said, Sarah, it's all a scam. It's not real

Alex Brooks  11:54  

devastating. Is too small word to describe what happened. They're $252,000 settlement funds gone. I assume

Speaker 1  12:04  

you remember this in slow motion. I

Sarah McCormack  12:08  

remember every second of it. I remember exactly where I was standing, exactly like the two nurses working with me, looking at my face, because I just fell apart. But I had to stay at work. There was nobody that could do the job. I was the only registered nurse on shift, and I couldn't leave. And Laine kept saying, you have to come home. You have to come home and sort this, and I can't leave. What do I do with all my patients? The

Alex Brooks  12:30  

couple had to move out of their rental property the next day. They were living out of boxes. Their bank ANZ couldn't tell them whether they would even get their money back. We

Sarah McCormack  12:41  

walked into the ANZ branch managers office two days after we found out we were scammed, and her advice back to me was I would get out of the contract with

Alex Brooks  12:51  

the clock ticking to complete their home purchase, or face losing their initial deposit Laine and Sarah got an extra week to recover the money, which had gone into a NAB mule bank account. Unfortunately, their vendor, the person whose house they were trying to buy, could not keep extending the time period without also losing valuable time or money. So that meant Sarah and Laing not only lost their dream home, but also the majority of their life savings, their ANZ branch manager was initially helpful about their loss.

Sarah McCormack  13:26  

She was so good. When we walked in the office, it was like she couldn't do enough for us. She even walked to NAB bank herself, trying to find out information. She brought up our receipt of our transfer. She looked at it and said, Well, I'm the manager. I'm supposed to sign off. The policy as I sign off and over transfer 24 hours afterwards. That's not my signature. So I don't know how this has been approved. You can clearly see those discrepancies with the transaction that's happened. And she told us all this, so I don't know how this was signed off, but then she completely backpedaled the next day in an email and just said there's nothing more I can tell you, and has not admitted that since

Alex Brooks  14:01  

ANZ did call Sarah and Laine to verify whether they had, in fact, made that payment to the NAB mule account. Ironically, Sarah thought that red flag call from their bank was a scam. She didn't want to engage with someone trying to get her to confess her birth date over the phone. After all, the National Anti Scam Xentre warns people to stop, protect, check. So why would Sarah willingly discuss her confidential identity information?

Sarah McCormack  14:28  

I had a phone call from ANZ. It was 9.30 at night, and there was an I don't want to sound discriminatory, but there was an Indian voice on the other end of the phone, and I thought it was a scam. I didn't trust it. Did I, I was looking at Laine going, this isn't real, like, and they were saying wording that was like, We understand you made a transfer, and you transferred this amount of money. So in my mind, still, I'm thinking, you're not being clear enough what you're trying to say to me. Like it felt like it just wasn't enough for me to go and be convinced that it was ANZ talking to me,

Alex Brooks  15:01  

and Sarah was right to be skeptical. Scammers regularly call and SMS people pretending to be the bank. So after initially being helpful, ANZ then shifted their tactics to blaming Sarah and lane. The bank claims they recovered $82,000 of their loss, but that hasn't been enough to restore their family's financial future.

Sarah McCormack  15:26  

We had to say the house is gone, but then you're in the reality of the rental that you're in, it's just been sold. So we had to get out of that like we were on a timeline of days. We had nowhere to go. We were about the potential, about being homeless, of putting stuff in a storage shed and sleeping on people's couches because you don't know what to do,

Alex Brooks  15:44  

and like every other bank customer who gets some money recovered from financial crime, ANZ offered absolutely no proof or paper trail to show where Sarah and Laine's stolen money had gone. Typically stolen home buyer, money is transferred into the mule account and quickly broken into smaller amounts, under $10,000 and then transferred into foreign currency accounts, things like OFX or Wise or into crypto. Bank insiders have told me they can trace money around three to five hops after it hits a mule account, but banks only have to show AFCA that the mule account was asked to pay back the money. And of course, the scammers are onto that. It's too bad, so sad for the victims, and payday for the scammers. The couple now pay more than $1,000 a week to rent a house which they don't love, when they should have been putting that rent money towards paying off their mortgage. Now, Laine and Sarah fear they may never get a mortgage again. Police have investigated their case. Five mules from Melbourne have been arrested, and apparently their money didn't go offshore. Now it will be months before Sarah and Laine find out if these criminals face any real penalties, like jail time or ordered to repay any stolen money. For

Sarah McCormack  17:08  

me, it was the guilt I was. I fell apart because I felt so guilty and so stupid, and going to a lawyer, having him tell you, you're an educated person, you should have known better, then you just go so deep internally that you just go, I've just ruined my whole family's life because I just didn't see it. I just didn't see the.au was missing on an email. And

Alex Brooks  17:31  

for people who work in offices on laptops or desktops and don't do physical work like nursing or a trade where you rely on email, on a mobile phone, you have no idea how easy that mistake is to make. Home buyer frauds don't just happen in our big cities where property prices are high. Lawyers and conveyancers all over Australia are having their emails breached and hacked, and there have been a few arrests like this gang that New South Wales Police have told me were associated with Ilya Fomin's crime. But even when criminal mules are convicted, they rarely have the money which has already been spirited offshore or laundered in other ways.

Tom Clifford  18:14  

I'm Tom Clifford. I'm 32 years old. I'm from Dubbo. I work in the construction industry. And this is my wife. Hope, hi.

Hope Clifford  18:23  

I'm a gym instructor. I'm originally from the Gold Coast, but moved here to follow my husband. So partner live in Dubbo with two kids.

Alex Brooks  18:31  

This couple from regional New South Wales bought a $270,000 block of land to build on back in August 2023. They paid their $27,000 deposit before everything went wrong.

Hope Clifford  18:46  

I was in tears because I was like, I'm 34 weeks pregnant, and we've just found out we've lost $250,000

Alex Brooks  18:54  

Tom's mum stepped in to lend them her superannuation to make sure they didn't lose their deposit. And nearly two years on, the couple have still not settled with their bank, who are offering less than 5% of their loss as reimbursement. Like Sarah, Laine and my son, the mule account that received their money was in Melbourne. Police have told Tom and Hope their money was transferred into crypto and went offshore, possibly to Liberia. This is

Tom Clifford  19:23  

pretty much the same as robbing a bank. It's just digital, like, it's literally the same thing. They're just doing it through the customer of the bank. Like, instead of walking in with a gun and asking for the money which the money is insured for, they are going through people and using deception to get it.

Alex Brooks  19:41  

In Australia, it now takes eight times an average income for someone to buy a home, and Australian banks make 60% of their revenue from interest on mortgages, according to UBS, yet our banks do not keep the home buying process secure. In the first year of a mortgage. The Australia Institute says our banks make around $10,000 in pure profit over the lifetime of a mortgage. That adds up to around $200,000 of bank profit from the average 30 year loan. Now, when the bank gets to charge interest on the losses from financial crime, as they've done to Ilya and my son, that is hundreds of 1000s of dollars more they make in pure profit. So why would they stop it when Australia's biggest home lender allows fraudulent PEXA payments on its platforms? I think that's wrong, especially when PEXA has significantly reduced mortgage transaction costs for banks while increasing the risks for home buyers. Now, these victims have had confidential home buying details hacked, being criminally defrauded through banking platforms, and had life changing amounts stolen by offshore criminals. Banks continue to deny any liability while making a profit by charging interest. AFCA also forces these victims to walk down a horribly long and complicated hallway of delays and blame to deliver very little justice. Everyone's

Tom Clifford  21:15  

like, Oh, I lost money. We don't want to touch it with a 10 foot pole. Not our fault, yeah, for many

Alex Brooks  21:21  

financial crime victims, the initial scam is only the first part of a horrible experience. Taking their case to AFCA means the victim will be blamed, not the people who hack solicitors emails, not the people who stole a pexa form or the bank staff who let fraudulent mule accounts on their platforms. Here, I

Louis May  21:42  

was a 23 year old up against a big bank senior lawyer. I think you can imagine how one sided that argument is, and of which that has to be off the record their conciliation, which I think is pretty foul, because what I want happening to me should be known by everyone, like, Why can the bank record my calls when I call them to transfer the money, but when it comes to their accountability, they're like, no, no, no one can hear this.

Alex Brooks  22:08  

There is still common law and legislation which demands banks be diligent and prudent. There's also a banking code, an ASIC act and a Corporations Act. Now all of the home byer fraud victims are aware they made a mistake, a potentially life ruining mistake. News.com.au recently had 21,000 Australians sign a petition demanding that banks put people before their profits, yet banks continue to block their ears and send their best white collar crime lawyers to fight unrepresented victims, particularly at AFCA. Oh and by the way, NABs lawyers Herbert Smith Freehills, who paid three barristers to fight the victims in the supercheap security case, rather than reimburse them, that law firm's just been fined by the British government for breaching sanctions against Russia. Nice CommBank CEO Matt Comyn, who earned $7 million in 2023 told the Australian Financial Review that he finds emails a complete waste of time. Well, lucky him being able to work in an office and have assistants protect him from the scourge of email while his most profitable bank mortgage customers lose their life savings using it. Comyn  told the 15 Minutes with the Boss podcast that he thinks email is a scourge. I

Matt Comyn  23:32  

generally think email is a grotesque waste of time. I'd hope I send probably the fewest number of emails as any CEO. I mean, I do less than five per day.

Alex Brooks  23:42  

His bank also spends millions on billboards and TV and digital ads, advertising how safe they are. What about every time you see one of those commbank safe ads?

Louis May  23:53  

Yeah, it's pretty gut wrenching. You see it on the street all the time. You know, sometimes you're just getting out of your car after a hard day of work. For me. I'm a tradie, 12 hour day. I finished my day I see one of these comm safe ads, and I go, No, Yep, I've just worked, you know, 12 hours today. That's the equivalent of me giving you this whole day's paycheck because you lost my money.

Alex Brooks  24:12  

Next time on Daylight Robbery, you'll find out exactly how dangerous those fake Australia Post, SMS, spam, texts and you'll meet a concreter who was robbed by his own bank.