Terrence Reddy and Felix Lyle ... linked to a fake certificate of title.

Terrence Reddy and Felix Lyle ... linked to a fake certificate of title.

A RIGHT-HAND man of the murdered businessman Michael McGurk could face criminal fraud charges over a sophisticated mortgage scam involving the head of the Sydney chapter of the Hells Angels, a court was told yesterday.

Terrence Reddy has admitted being part of a scheme to rip off banks using fake home loan documents, but blamed the bikie boss, Felix Lyle, for stealing the money.

The pair are linked to a fake certificate of title for a house in Stanmore, which they allegedly used to borrow $539,000.

Justice Michael Adams in the NSW Supreme Court yesterday said he would refer the case to the Director of Public Prosecutions.

During a hearing of the civil case last year, Mr Reddy was accused of hoodwinking banks into lending money secured against the house of a Stanmore woman, Ann-Marie Menzies.

The lender has sued Ms Menzies, saying she is liable to repay the stolen funds and arguing she should sell her home to do so. Ms Menzies argues she should not have to repay the funds because she was a victim of fraud.

It was not until two years after the loan was made that she discovered a mortgage had been taken out on her home and a fake certificate of title created.

Counsel for the lender, Greg Sirtes, said Ms Menzies might have been used as a front for Mr Lyle and Mr Reddy, which she denies. ''She was put forward to hide the involvement of Mr Lyle or Mr Reddy from the bank or the tax commission,'' Mr Sirtes said.