An individual who was accused of carrying out regulated activity without authorisation has pleaded guilty to the offences at Southwark Crown Court.
The case, which was referred to the courts by the Financial Conduct Authority, saw Larry Barreto plead guilty on July 29 to charges relating to advice provided and arrangements made regarding a series of regulated mortgage contracts between June 2014 and March 2018.
The regulator first commenced criminal proceedings against Larry Barreto and Tassib Hussain relating to alleged mortgage fraud and carrying out regulated business without authorisation in April 2021.
At the time, the FCA said the fraud charges related to a series of mortgage applications made between January 2015 and March 2018 amounting to £3.8mn.
In an update today (August 10), the FCA said Barreto and Hussain have been charged with an offence of committing fraud by false representation.
They both deny committing this offence and will face trial on October 23, 2023 at Southwark Crown Court.
Sentencing for the offences of carrying on unauthorised business will take place after the conclusion of the trial for the fraud offence.
As reported previously by FTAdviser, Barreto traded as Barreto and Partners, an unauthorised financial services firm based in Nottingham. Hussain is an accountant who ran Keystone Chartered Accountants, also based in Nottingham.
According to the FCA, the pair helped clients apply for mortgages without sufficient income.
The regulator alleged that if Barreto concluded that his mortgage clients had insufficient income to justify the mortgage they required, he would charge the client a fee.
The fee would then be paid in cash by Barreto to Hussain, to create false self-employment and employment documentation to support mortgage applications for the clients.
The FCA said that Barreto is an unauthorised and prohibited person and as such could not provide regulated financial services.
Fraud is punishable by a fine or up to 10 years’ imprisonment or both, while unauthorised business is punishable by a fine or up to two years’ imprisonment.