Six banned and one fined £130,000 for mortgage fraud

5 July 2010 | By Natalie Thomas

The FSA found that all lacked honesty and integrity, most had committed mortgage fraud by providing false or misleading details in mortgage applications, and a number had deliberately obstructed its investigations.

These actions bring the total number of mortgage brokers banned to 91.

Three of the individuals banned all worked for one firm, Neale Morton IMS Limited, based in Gateshead, Tyne and Wear.

Neale Morton was the principal and director of IMS. The FSA has prohibited and fined him £130,192 for knowing involvement in mortgage fraud and for systems and controls failings at IMS for which he was personally culpable. Part of the fine, £5,192, represents a disgorgement of the profit he made from the fraudulent mortgage applications.

Morton not only submitted mortgage applications for himself that used false income details, but he also allowed his firm to be used for mortgage fraud by its advisers and customers.

During the investigation Morton failed to deal with the FSA in an open co-operative way by failing to disclose relevant information. Morton referred the case to the Financial Services and Markets Tribunal but his reference was subsequently struck out.

Two advisers at IMS, Jonathan Smith and Syed Meah, have also been banned. Both produced falsified compliance documents during the FSA’s investigation. Smith also submitted falsified mortgage applications to lenders on behalf of the firm’s customers and Meah did not notify the FSA that he had been arrested on suspicion of money laundering and had, as a result, been suspended as a mortgage adviser at IMS.

In an interview with the FSA, Smith estimated that approximately 5% of the mortgage business he submitted while at IMS was “crooked”.

Mortgage intermediary Monika Tewari has been banned from working in regulated financial services for her involvement in mortgage fraud.

Tewari used different mortgage intermediaries to submit two applications in her own name containing false income information; in one instance she inflated her earnings by 300 per cent from a basic £23,000 to a gross income claimed of £92,000.

Amanakwaa Adu, trading as Distinct Financial Services in Leytonstone, East London, has been banned for failing to demonstrate that he is fit and proper to work in the financial services industry.

Adu used a mortgage intermediary to submit mortgage applications in his name containing false information. In particular, Adu lied about his nationality by claiming he was Belgian when in fact he was Ghanaian, and also inflated his income.

An investigation by the FSA also found that Adu submitted two applications on behalf of two fictitious customers to gain advances for his own benefit.

Tony Oliver, trading as Finesse Financial in Barking, Essex, has been prohibited for his involvement in mortgage fraud and providing false and misleading information to the FSA.

During the course of its investigation, the FSA found that Oliver had provided false information to support his applications for approval under the FSA’s Approved Persons regime.

Oliver was also found to have submitted a mortgage application for himself as well as a secured loan application, both of which contained false information

Margaret Cole, director of enforcement and financial crime at the FSA, says: “These individuals put lenders at risk of financial crime and threatened to undermine confidence in the mortgage market, so this action makes the market a safer place.

“Our crackdown on mortgage fraud continues as a priority in our ongoing campaign against financial crime. We have banned more than 90 mortgage brokers over the last three years and the fine on Morton takes the total penalties levied for mortgage fraud to more than £1.7 million.

“Mortgage fraud is dishonest and anybody who perpetrates it will increasingly find themselves facing bans, large fines and forced to return their illicit gains.”

All of these cases stem from work that was originally conducted by the FSA’s Small Firms and Contact Division.

If you enjoyed this article, sign up here to receive daily email updates from Mortgage Strategy and Follow @mortgagestrat