AUCKLAND - A New Zealand couple has absconded with millions of dollars deposited into their account in error by Australian bank Westpac. Leo Gao and Kara Yang-Hurring, who ran a BP service station that had just been put into receivership, fled New Zealand after a Westpac staff member accidentally deposited $NZ10 million into their account following their application for a $NZ10,000 business overdraft. The bank has since recovered about $NZ6 million, but the couple has left the country with the remaining funds. Missing with the pair are Yang-Hurring's daughter Leena, 7, Gao's mother, his business partner Huan Di Zhang and Yang-Hurring's sister Aroha Hurring, according to reports in the New Zealand Herald.
Police tracking the pair have traced them to Hong Kong, Macau and mainland China, largely via their indiscreet updates on Facebook.
Concerned about attention regarding the employee responsible for the loss, who is said to be extremely distressed by the error, Westpac appealed for privacy. TVNZ reported that the employee, who has more than 30 years of banking experience, is undergoing counselling. A Westpac spokesperson told TVNZ: "What should be remembered is the loss from this episode did not happen because of the error, but because of the behaviour of individuals who have taken advantage of the error."
However, it could be said that the real cause of this problem is that the controls system allowed the mistake to occur in the first place. The bank's systems should have incorporated a 'good sense' check or added a further check when a service station owner asked to withdraw and/or transfer millions of dollars. Any internal investigation will focus on the employee's actions but much more so on the multiple failures in the bank's core systems.
More on Regulation
Directional portfolios and limited diversification will hamper recovery process
State-owned and private banks already above 4% standard regulators are introducing
SSM chair also wants to end rule opt-outs that make banks "look stronger than they really are"
Sponsored feature: Clearstream
Sign up for Risk.net email alerts
Oxford professor David Vines argues that the carrot is as important as the stick
Sponsored webinar: IBM
Watch highlights of this year's London conference
Operational risk and the challenges of defining and dealing with conduct risk
There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.