Unauthorised broker found guilty in £3m fraudulent mortgage case

Larry Barreto who traded as Barreto and Partners, an unauthorised financial services firm based in Nottingham, has been found guilty of 11 charges of fraud by false representation in a prosecution brought by the Financial Conduct Authority (FCA)

His co-defendant, Tassib Hussain, a chartered accountant, also pleaded guilty to fraud by false representation.

From January 1, 2015, to March 2018, Barreto provided advice to clients seeking residential mortgages without the required FCA authorisation.

In 11 instances, he inflated the income of mortgage applicants in their submissions to lenders and charged clients a fee, which he then paid in cash to Hussain.

Hussain, in turn, fabricated self-employment and employment documents to support mortgage applications for clients with insufficient income.

Furthermore, Hussain generated multiple documents, falsely claiming to be issued by HMRC and containing inaccurate income figures, these documents were then sent to lenders by Barreto.

With Barreto’s awareness, Hussain also falsely claimed to employ two applicants, providing fabricated contracts of employment and payslips, which Barreto forwarded to lenders.

This fraudulent activity led lenders to approve mortgages for several applicants on false grounds, exposing lenders to increased risk of financial loss.

The total value of the falsely applied mortgages was approximately £3m and both individuals will be sentenced on February 23, 2024.

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