An alleged fraud and money-laundering syndicate, referred to as the 'Penthouse Syndicate', is believed by police to have defrauded major Australian banks and financiers of over $250 million. The investigation, which began in 2019, has led to multiple arrests, including key figures Andrew W Hu and Bing 'Michael' Li.
Origins and Commonwealth Bank Allegations
The syndicate's alleged operations reportedly began in October 2021, when Andrew W Hu, then a relationship manager at Commonwealth Bank, began receiving business loan referrals from associate Bing 'Michael' Li. These applications, for companies directed by Li and his partner Zhouyao 'Yumi' Chen, were allegedly processed through colleagues, circumventing official channels. Over nine months, at least 38 loans totaling $14.9 million linked to Hu were approved.
Commonwealth Bank initiated an investigation in mid-2022, leading to Hu's dismissal in August of that year due to suspected fraudulent loan applications. Police allege that Hu then leveraged his acquired knowledge of banking systems to establish the foundations of the Penthouse Syndicate.
Expansion to National Australia Bank (NAB) and Operational Methods
Hu, who previously worked at National Australia Bank (NAB) from 2015 to 2018, is alleged to have become a ringleader in the syndicate. Last month, under Strike Force Myddleton, Hu was charged with 89 offenses, including facilitating $105 million worth of mortgage and business loan fraud for the syndicate. This includes $90 million in allegedly fraudulent NAB mortgage and business loans and $14.9 million from Commonwealth Bank business loans.
Police allege the syndicate, under Hu's direction, employed a network of corrupt bankers, mortgage brokers, solicitors, and real estate agents. Hu allegedly rotated these individuals to avoid suspicion and vetted fraudulent financial documents used to secure loans. Bing 'Michael' Li, the alleged head of the syndicate, reportedly paid Hu up to $100,000 for each successful loan application he facilitated. Hu allegedly instructed other mortgage brokers to submit home loan applications with NAB, avoiding the use of his own broker number. Payments to bankers and brokers were reportedly made in cash to obscure financial trails.
Scope of Alleged Fraud and Property Holdings
The Penthouse Syndicate is accused of inflating property prices in Sydney by purchasing overvalued homes and generating millions through undisclosed back-door contracts. These funds were allegedly obtained through loans that lenders are unlikely to recover. Members of the syndicate, including Hu, are reported to have maintained lavish lifestyles. In March 2021, Hu purchased a $1.5 million townhouse. In late 2023, Hu co-opened Myst nightclub, which became an alleged meeting point for syndicate members.
Investigation and Arrests
Strike Force Myddleton was established in January 2024 to investigate a $10 million scheme involving non-existent luxury cars, leading to the unraveling of the syndicate.
- Bing 'Michael' Li: Arrested in July [previous year, implied 2023], residing in a Crown residential tower penthouse rented for over $34,000 monthly.
- Andrew W Hu: Charged with 89 offenses. Bail was refused due to concerns about access to unaccounted money, fraudulent documents, and ties to China.
- Timotius Donny Sungkar: Former NAB employee, charged in November with facilitating nearly $10 million in business loan fraud for the syndicate while at NAB. Bail was also refused.
- Family Members: Hu's mother, Xinyu Ye, and stepfather, Zhenliang Hu, were arrested and charged with dealing with proceeds of crime after allegedly transferring $205,000 from a shared bank account post-Hu's arrest. Ye allegedly attempted to access a safe deposit box containing $260,000 worth of jewelry and watches. Ye's bail was refused, while Zhenliang Hu was released on $20,000 surety.
- Cheryl Tan: Hu's girlfriend, cautioned as a suspect, but not charged.
Investigations are ongoing, with detectives expecting to arrest up to 20 more syndicate members as they trace additional loans worth millions of dollars. The case has increased scrutiny on the banking sector and raised questions about industry reforms.