Pair handed suspended prison sentences for ‘systematic’ £3m mortgage fraud
Two men have received suspended prison sentences for making £3m worth of fraudulent mortgage applications following a prosecution brought by the Financial Conduct Authority (FCA).
Larry Barreto and Tassib Hussain were found guilty of fraud offences in November after the FCA commenced criminal proceedings against the pair in April 2021.
At Southwark Crown Court on Wednesday, Barreto received a two-year prison sentence, suspended for two years with 120 hours of unpaid work, for 11 counts of fraud by false representation and two counts of carrying on regulated activities without authorisation.
Hussain was sentenced to 16 months in prison, suspended for two years with 120 hours of unpaid work, for one count of fraud by false representation.
The City regulator alleged that between 1 January 2015 and March 2018, Barreto gave paid advice to people looking to take out residential mortgages without necessary FCA authorisation.
It said that in 11 cases, Barreto “dishonestly inflated” his client’s income in the application to the lender. The FCA claimed Barreto would then pay Hussain, who created false self-employment and employment documentation to support the inflated applications.
Hussain produced multiple fake HMRC documents that contained false income figures, which in each case were sent on to the lender by Barreto, the FCA said. The total value of the mortgages applied for was around £3m.
The regulator added that, with Barreto’s knowledge, Hussain also claimed to employ two of the applicants and produced false contracts of employment and payslips, which Barreto also forwarded to lenders.
The FCA said that, due to the pair’s actions, lenders granted mortgages to several applicants on a “false basis, placing them and their customers at greater risk beyond financial loss”.
In passing sentence, His Honour Judge Cole said the duo was “guilty of systematic mortgage fraud” and “abused your position… it ruins the integrity of the system to have dishonest players in it”.
Therese Chambers, joint executive director of enforcement and market oversight at the FCA, said: “Larry Barreto and Tassib Hussain chose a selfish path in pursuit of their own greed. Their dishonesty unnecessarily put people at risk of taking out unaffordable loans and losing their homes.
“Their offending also undermined the reputation of the industry, and the legitimate advisers that work in it.
“The sentences should send a clear signal of the lengths we and the courts will go to catch and prosecute those who commit such acts of dishonesty. And for Mr Barreto and Mr Hussain the consequences of their offending will have far-reaching impacts for them beyond their sentences.”
The FCA said it had begun confiscation proceedings to “recover the considerable financial benefit obtained by the defendants”.