Two men have been sentenced for their roles in a £3m mortgage fraud case following a prosecution brought by the Financial Conduct Authority (FCA).

Former adviser, Larry Barreto, and former chartered accountant, Tassib Hussain, were convicted for fraud offences last November.

Barreto was sentenced to a total of two years’ imprisonment, 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’ imprisonment, suspended for two years, with 120 hours of unpaid work, for one count of fraud by false representation relating to 11 mortgage applications.

Between January 2015 and March 2018, Barreto gave financial advice in return for a fee, without the necessary FCA authorisation, to people looking to take out residential mortgages. The investigation found that in 11 cases, he dishonestly inflated the applicant’s income in their application to the lender.

Barreto would then pay Hussain, who created false self-employment and employment documentation to support the inflated mortgage applications for clients with insufficient income.

Hussain also produced multiple fake HMRC documents that contained false income figures, which in each case were sent onto the lender by Barreto, and Hussain also claimed to employ two of the applicants and produced 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 them and their customers at greater risk beyond financial loss. The total value of the mortgages applied for was worth around £3m.

Joint executive director of enforcement and market oversight, Therese Chambers, said the two men had chosen 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,” Chambers commented. “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 Barreto and Hussain the consequences of their offending will have far reaching impacts for them beyond their sentences.”

The FCA confirmed that it has begun confiscation proceedings to recover what it described a “considerable financial benefit” obtained by the two defendants.

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