Staff rort leaves bank customers in bankruptcy

MORE than three years after ANZ Bank repossessed Fotini Pavlis's family home in Prariewood, it still breaks her heart to drive past it, as she has to do almost every day.

Within two months of losing their house, her husband, John Pavlis, had a stroke. At the time, the couple blamed a former friend and several failed property investments for their problems.

But recently they discovered the role their bank managers played in them losing their life savings. And they are not alone.

At least five other people believe they were victims of a multimillion-dollar scam involving loans, signatures and documents falsified with the help of bank employees. In at least two cases, money left their accounts without their approval.

Police are now investigating claims that three bank staff - a man, a woman and her daughter - committed fraud in conjunction with the Pavlises' former friend, Viron Hondros. The bankers had private business dealings with Mr Hondros, who was described as "shonky" in a court case.

Mr Hondros, now a discharged bankrupt, was a self-styled mortgage broker and failed property investor living the high life.

Customers who have spoken to the Herald have lost about $2 million among them. Two have been bankrupted and no longer have their homes - but that is just the tip of the iceberg. Add to that legal costs, depression, and even attempted suicide. And probably other victims who still don't understand what happened.

Despite questions about the involvement of three bankers in this fraud, two of them still work in Sydney banks. While the National Australia Bank, which used to employ the male bank manager, has settled two claims for compensation, the Commonwealth Bank, where he works now, says it takes time to investigate five-year-old claims.

And ANZ refuses to review the issue, despite new evidence pointing to a female bank manager it used to employ.

The victims found one another after being listed as creditors in Mr Hondros's bankruptcy proceedings.  Police and the Australian Securities and Investments Commission also refused to act. The trustee in bankruptcy - later suspended for failing to perform his duties properly in another case - also could not recover any substantial assets.

Police are finally investigating Mr Hondros and the bankers who organised the loans. One of the victims, Michael Papadios, hired solicitors, contacted the Banking Ombudsman and obtained help from an advocate. In the past year a financial investigator has helped several victims obtain copies of the documents needed to understand what happened.

FOTINI PAVLIS worked as a cleaner and her husband John was a part-time kitchen hand, earning a combined $700 a week in 2003. Still, NAB and ANZ granted them more than $700,000 in home loans.

According to NAB's files, Mrs Pavlis worked for Mr Hondros's company, earning $1500 a week, while her husband supposedly earned $1300 a week as a chef. The couple say they did not know about these statements and it appears the bank never verified them.

The NAB refuses to talk to the Pavlises about their loan because they are still bankrupt.

Documents from their ANZ loan show $160,000 was paid out of their mortgage account to Mr Hondros's company, without their instructions, in mid-2004. The female bank manager at ANZ, who transferred the money, was Mr Hondros's friend.

ANZ has closed the case and says it cannot undo the decision to send the couple into bankruptcy. It refuses to refund the money.

Mrs Pavlis acknowledges they were stupid to have trusted Mr Hondros, their long-term friend. But they also trusted their banks.

BILL PISANO had hoped to invest in one of Mr Hondros's property schemes, recommended by his NAB manager. The male banker, another friend of Mr Hondros, increased Mr Pisano's loan without any paperwork. Mr Pisano then gave him $150,000 to invest.

The banker invested this in his own name, with Mr Hondros in January 2004. Mr Pisano says he never received the security he had been promised, nor any return on his investment.

The debt started to accrue interest - rising ultimately to more than $250,000 - and in late 2004 the male bank manager, by then working for Commonwealth Bank, recommended Mr Pisano refinance the loan there.

The new loan was taken out in joint names with Mr Pisano's wife, Carol, but she is adamant she did not sign for it.

The NAB has since settled Mr Pisano's claim, taking some responsibility for its manager's action. A spokeswoman for the bank said: ''Where [claims are] found to have any validation at all, no customer would be left out of pocket as a result.''

But Mr and Mrs Pisano are still waiting for an answer from the Commonwealth Bank, which says it is investigating their complaint. A spokesman said he had not been presented with ''satisfactory evidence'' that the manager was responsible for the fraudulent applications.

Mr Pisano said he was angry the bank had breached its guidelines by allowing staff to have a personal interest in a loan they set up.

IN EARLY 2004, Roula Tsohas, a nursing assistant, took a $360,000 loan at the Commonwealth Bank to refinance another mortgage. Mr Hondros, who organised the loan, dealt with the male bank manager who had been involved in Mr Pisano's case. He also dealt with the female bank manager's daughter, who now worked at the Commonwealth.

Mr Hondros told Ms Tsohas she should write a cheque to him so he could repay her earlier loan but he never did so. At the same time, he organised another mortgage for Ms Tsohas with ANZ to buy an investment unit. There he dealt with the female bank manager who had organised the Pavlises' loan.

Both banks' files contain false tax returns and documents claiming Ms Tsohas worked for a private company. She says she did not sign for either loan and never met the Commonwealth's bank manager who claims to have witnessed her signatures, which do not look like her normal signature.

The money from the ANZ loan also went to Mr Hondros who sold her a unit he owned - a clear conflict of interest. She says she signed the paperwork for the unit on a Sunday morning in the presence of the ANZ's female banker. The unit was valued through the ANZ at $500,000 but she was forced to sell it months later for less than $275,000. The ANZ's female bank manager left her job weeks after Ms Tsohas took this loan. But the bank says her departure was unrelated.

Neither the Commonwealth nor the ANZ can see the bigger picture, her daughter, Maria Tsohas, says. "They [the people] were doing dodgy things," she says, adding that she suspects the bank employees were getting a financial benefit.

ANZ, which bankrupted Ms Tsohas, will not talk to her but has since settled an almost identical claim for another customer who could afford to employ a solicitor. The ANZ also settled another dispute, involving one of the Pavlises' relatives, who also employed a solicitor.

MICHAEL PAPADIOS decided to fight for his money when he discovered two bank cheques totalling $350,000 were paid to Mr Hondros's company without his approval from a mortgage he did not know he had.

The NAB bank manager who organised the loan in December 2003, based on false income statements and signatures, was the same man who dealt with Mr Pisano and Ms Tsohas. He now works with Commonwealth Bank.

Mr Papadios is happy that the NAB settled his claim last year, after years of fighting, legal costs and depression. But he says he won't rest until those he holds responsible are brought to justice.

"I want to see the people that were involved within the banks charged for what they have done. They can't go around forging people's signatures.''

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