On Tuesday, ASIC announced licensed mortgage broker Aizaz Hassan and associate Najam Shah had been charged with conspiracy to defraud over their alleged involvement in a $110 million scam targeting Australia's four largest banks and half a dozen other lenders. The duo are accused of creating at least 350 loans between 2008 and 2011 using fake paperwork processed through a suburban loan referral and broking company, Myra Financial Services. The firm was registered in the name of Mr Shah's spouse, Manija Zayee, who has been charged with obtaining financial advantage by deception over her involvement in a fraudulent home loan. But a Victoria Police affidavit obtained by Fairfax Media suggests the number of participants in the alleged fraud could be significantly larger, embroiling two other financial services companies, a suburban law firm, and an alleged co-conspirator who is believed to have fled the country. The 2012 document, sworn by Detective Senior Constable Anthony Beach of the Criminal Proceeds Squad, said ASIC launched its investigation in January 2011 – four years before any suspects were charged.

The investigation began with a complaint to ASIC, which discovered over 600 suspected fraudulent home loan applications had been processed by Myra Financial Services and a series of other companies. Identified as "key persons of interest" in the investigation were Myra's sole director and shareholder Manija Mohammad Zayee (also known as Manija Shah and Manija Baig) and her spouse Najam Zaidi Shah (AKA Nigel Shah, Jim Shah, Najam Zaidi, Sayed Najam Zaidi and Shahzad Asif Baig), a former bankrupt. A third suspect, identified for the first time publicly here, was 28-year-old Mohamed Radhi Maki Ebrahim Ahemed Hamood (AKA Hamood Ahmed and Antone Ahmed). After an 11-month investigation, ASIC and the Australian Federal Police raided several properties associated with the trio in December 2011. Search warrants led to the seizure of "significant documentary evidence" related to the alleged frauds, including material from the homes of Mr Shah and Mr Hamood, according to the affidavit.

The three suspects were also issued notices demanding they appear before ASIC for a "compulsory examination". Mr Shah and Ms Zayee were interviewed in early February 2012. "Hamood failed to comply with the notice and did not attend the examination, having departed Australia for Bahrain on 18 December 2012; two days after search warrants were executed," Detective Beach reported to the court. ASIC can seek a court order seizing a person's passport or barring their departure from Australia if the agency believes they have committed an offence and are considered likely to flee the jurisdiction. It is unknown whether Mr Hamood has ever returned to Australia, but he was not charged last week along with Mr Shah, Ms Zayee and Mr Hassan. Even after discovering Mr Hamood's disappearance, ASIC did not move to control Mr Shah and Ms Hassan's ability to travel internationally.

In March 2012, the couple left Australia for Dubai. Ms Zayee returned shortly afterwards before leaving with their children for Pakistan five days later. Detective Beach said the couple were still overseas at the end of May when he swore his affidavit outlining the extensive list of criminal offences Mr Shah, Ms Zayee and Mr Hamood were suspected of committing. At that stage, ASIC was planning to refer its brief to the Commonwealth Department of Public Prosecution within a fortnight. It would take more than two-and-half-years for criminal charges to be laid against Mr Shah and Ms Zayee, who returned to Australia at some point. Another alleged co-conspirator, Aizaz Hassan, was also charged in early January 2015. As part of their bail conditions, Mr Shah and Mr Hassan were required to surrender their passports and report regularly to police.

It is unclear why ASIC chose not to bar the suspects from international travel at the time they were alerted to the existence of the investigation by the raids and compulsory examination notices. The corporate regulator has declined to comment because the matter is before the courts. ASIC is already facing tough questions about why it has allowed Mr Hassan to continue to work in the lending industry when the corporate regulator suspected he was involved in the alleged fraud. Despite Myra Financial Services being shut down in 2012, Mr Hassan has continued to facilitate loans for the major banks and other lenders, which are now scrambling to assess the extent of the potential damage. Mr Hassan's credit license was only cancelled on Tuesday, an action taken by his employer Cigna Financial rather than by the regulator. He has been suspended and is now under investigation by the group.

cvedelago@theage.com.au gwilkins@fairfaxmedia.com.au