FCA brings proceedings against unauthorised and fraudulent mortgage advisers
What has happened?
In November 2023, unauthorised mortgage adviser Larry Barreto was found guilty of 11 charges of fraud by false representation following a prosecution brought by the FCA.
What are the key points of this case?
At an earlier hearing, Larry Barreto had pleaded guilty to two offences of arranging and advising on regulated mortgages without meeting the FCA mortgage adviser requirements. At the beginning of the trial, Barreto’s co-defendant, Tassib Hussain, pleaded guilty to fraud by false representation.
Between 1 January 2015 and March 2018, Barreto had given advice, without having the necessary FCA mortgage adviser requirements to clients looking to take out residential mortgages. In 11 cases, he also dishonestly inflated the mortgage applicant’s income in their application to the lender. Barreto charged the client a fee which he would then pay in cash to Hussain, who created false self-employment and employment documentation to support mortgage applications for clients with insufficient income.
Hussain also produced documents purporting to have been issued by HMRC and containing false income figures, which in each case were sent on to the lender by Barreto. With Barreto’s knowledge, Hussain also claimed to employ two of the applicants to create a false impression of their income, producing false contracts of employment and payslips, which Barreto also forwarded to lenders.
As a result of the fraud, lenders granted mortgages to several applicants on a false basis, placing lenders at greater risk of loss. The total value of the mortgages applied for was circa £3 million.
Barreto had previously been struck off as a financial adviser by the Personal Investment Authority in 1996 and prohibited from carrying on regulated activity by the Financial Services Authority in 2004.
Both individuals will be sentenced on 23 February 2024.
How can we help you?
Thistle Initiatives has supported mortgage advisers for over 10 years as a trusted compliance and regulatory advisor. In addition to assisting you as-and-when, our team of specialists can serve as your right hand in meeting and complying with FCA mortgage adviser requirements. We understand the importance of staying up-to-date and compliant and are dedicated to providing the guidance and support needed to do so.
Are you looking for help with your mortgage fraud prevention arrangements, or more general regulatory questions? Contact our specialist team now to schedule a free consultation. Get in touch with us by calling 020 7436 0630 or sending an email to firstname.lastname@example.org.