The Financial Conduct Authority (FCA) has commenced criminal proceedings against two individuals relating to alleged mortgage fraud and carrying out regulated business without authorisation.
The proceedings relate to an offence of conspiracy to commit fraud by false representation involving Larry Barreto and Tassib Hussain, as well as two further offences by Barreto of carrying out regulated activities without authorisation.
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.
The fraud charges relate to a series of mortgage applications made between January 2015 and March 2018 amounting to £3.8m.
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 unauthorised business charges relate to advice provided and arrangements made regarding a series of regulated mortgage contracts between June 2014 and March 2018.
The FCA said that Barreto is an unauthorised and prohibited person and as such could not provide regulated financial services.
Both defendants appeared at Westminster Magistrates’ Court on April 21. The case was sent to Southwark Crown Court for a plea and trial preparation hearing on May 19.
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.
What do you think about the issues raised by this story? Email us on FTAletters@ft.com to let us know.