Two men have been found guilty of arranging £3m worth of fraudulent mortgage applications.

Larry Barreto and Tassib Hussain pleaded guilty to fraud by false representation following a prosecution brought by the Financial Conduct Authority.

Barreto, a financial adviser previously struck off, was found guilty of 11 charges of fraud by false representation.

While Hussain, a chartered accountant, pleaded guilty to fraud by false representation at the beginning of the trial.

Between 1 January 2015 and March 2018, Barreto gave advice to clients looking to take out residential mortgages without the necessary FCA authorisation.

In 11 cases investigated by the FCA, Barreto was found to have dishonestly inflated the mortgage applicant’s income in their application to the lender. He 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 multiple 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.

Hussain also, with Barreto’s knowledge, claimed to employ two of the applicants to create a false impression of their income, producing false contracts of employment and payslips in support of their applications.

FCA said because of the fraud lenders granted mortgages to several applicants on a false basis. 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.

FCA joint executive director of enforcement and market oversight Steve Smart said: “Mr Barreto and Mr Hussain knowingly lied and misled their clients and mortgage providers in order to benefit financially from mortgage applications. This put borrowers at risk of taking on unsustainable levels of debt, and left lenders open to losses.

“Today’s verdict demonstrates our commitment to tackling fraud and sends a warning to anyone involved in similar criminal activities that we will pursue them, so they face the full force of the law.”

Both individuals, who are based in the East Midlands, will be sentenced on 23 February 2024.