A mortgage adviser and his colleague have been given a suspended prison sentence following a conviction for systemic fraud offences.

These convictions follow an investigation by the FCA involving fraudulent mortgage applications totalling £3m.  

Mortgage adviser Larry Barreto was convicted of  11 counts of fraud by false representation, and two counts of carrying out regulated activities without authorisation. He was sentenced to a total of two years’ imprisonment, suspended for two years, with 120 hours of unpaid work.

Tassib Hussain was convicted for one count of fraud by false representation relating to 11 mortgage applications. He was sentenced to 16 months’ imprisonment, suspended for two years, with 120 hours of unpaid work.

The court heard that Barreto inflated the applicant’s income in 11 residential mortgage applications, as well as giving mortgage advice in return for a fee without the necessary FCA authorisation. 

As part of this process Barreto paid Hussain to create false self-employment and employment documentation to support applications for clients with insufficient income. This involved Hussain producing fake HMRC documents containing false income figures, which were sent to lenders by Barreto. 

Hussain also claimed to employ two of the applicants and produced false contracts of employment and payslips, which Barreto also forwarded to lenders.

The total value of these mortgage applications for was around £3m.

Passing sentence the HHJ Cole, sitting at Southwark Crown Court, said the pair were guilty of  “systematic mortgage fraud”, adding that Barreto had risked ruining the integrity of the mortgage system by “abusing his position”.

FCA joins executive director of enforcement and market oversight Therese Chambers added: “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.”

She adds: “These 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.”

The FCA has begun confiscation proceedings to recover the considerable financial benefit obtained by the defendants.