A widespread fraud scheme involving major Australian banks, including NAB, has been uncovered, with connections to a Sydney crime syndicate and the use of 'mules' to purchase properties with fraudulent loans.

The syndicate, led by Bing 'Michael' Li, used shell companies, fake financial records, and false identification to secure over $150 million in loans, often involving overvalued or nonexistent assets.

Li and his associates were arrested in July at an $18 million penthouse in Barangaroo, Sydney, and are accused of laundering money through shell companies and purchasing properties on behalf of the group.

Police have charged 14 syndicate members with crimes totaling over $107 million, seizing $60 million worth of property, cars, and luxury goods, with the total fraud linked to NAB exceeding $150 million.

The syndicate's operations included purchasing shell companies, registering new directors, and creating fake financial records, with some loans approved during NAB's ongoing anti-money laundering checks, raising concerns about regulatory oversight.

The investigation has revealed vulnerabilities in NAB’s internal controls, as some fraudulent loans were approved despite existing anti-money laundering measures.

Individuals recruited as 'mules' have been charged for buying properties with fraudulent loans, including a couple who purchased $15 million worth of property, highlighting the scale of the scheme.

Authorities continue to investigate, suspecting more individuals and fraudulent loans, while emphasizing the difficulty of recovering stolen assets.

Several NAB employees across multiple branches are under investigation for accepting bribes and approving falsified loan applications, though none have been charged yet.