APRA stops unauthorised bank

Australian Prudential Regulation Authority (APRA) has obtained court orders preventing an unauthorised financial business,
the ‘Federal State Bank of Australia’, from calling itself and acting
like a ‘bank’.

Justice Susan Keifel in the Federal Court in
Brisbane ordered that Donald Cameron and Darryl John Wheeley be
restrained from using the word ‘bank’ after evidence was put to the
court that hundreds of thousands of dollars in fake currency and
cheques were being passed off as legitimate and that the word ‘bank’
had been used illegally.

Evidence presented by APRA to the
court showed that:

  • a total of 12 transactions have been
    identified where fake currency and cheques purporting to be valued at
    over $500,000 were attempted to be used as legitimate payment for
    various transactions including payment of rent, printing, telephones,
    the discharging of mortgages and legal fees;
  • the ‘cheques’
    were presented by unsuspecting recipients to various bank branches in
    Queensland, Sydney and Perth, none of which was honoured;
  • the
    unauthorised bank and affiliated institutions operate out of a home in
    suburban Moorooka in Brisbane, which is the subject of a mortgage
  • Cameron was declared a vexatious litigant by the Supreme Court of Queensland in March 1996; and
  • Cameron
    had previously failed to address an APRA demand that he stop using the
    words ‘bank’, ‘banker’, ‘banking’ or any similar words or phrases in
    relation to the business in contravention of section 66 of the Banking
    Act 1959 (Banking Act).

The court ordered Cameron and
Wheeley to stop using the word ‘bank’; to not advertise, represent or
state that they will carry on banking business; to not issue or be in
any way involved in issuing any purported cheque or negotiable
instrument drawn on the account of the ‘Federal State Bank’; and to not
issue any bill or note for the payment of money.

The Banking Act prohibits anyone from
conducting a banking business without the appropriate authority from
APRA. It also prohibits the use of words that connote the carrying on
of a banking business.

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