The FCA has banned former broker Amir Khan for mortgage fraud while withdrawing an £80,000 fine due to financial hardship.
In its initial decision notice in 2012, the FCA proposed a fine of £100,000. The Regulatory Decisions Committee, part of the regulator’s appeals process, later agreed a fine of £80,000, which was upheld by the Tribunal in 2014.
But in a final notice published by the FCA today, the regulator says Khan,the former owner and director of Edinburgh-based mortgage firm Sovereign, provided “verifiable evidence” in June of serious financial hardship.
The notice says: “Had it not been for his reduced financial circumstances the authority would have imposed a financial penalty of £80,000. Following Mr Khan’s provision of evidence of his reduced financial circumstances, the authority has issued this final notice.”
The FCA proved Khan had submitted a personal mortgage application to Abbey National through Sovereign in 2009 that contained false information about his income. According to the Tribunal’s decision, he applied for a loan of £237,000 saying his salary was £60,000 and that he earned a secondary income of £14,500 from buy-to-let properties.
Tax returns showed Khan’s income was much lower than £60,000 – in 2009/10 he declared PAYE income from Sovereign of £4,170. Income from the buy-to-let properties for that year was actually £8,500.
He later admitted he was reckless in relying on an accountant’s advice around how to declare his income in the application.
Khan also applied for another mortgage through Abbey in 2010 which was based on the information supplied in the 2009 application.
The final notice says the FCA did not prove its argument that Khan had intentionally certified copies of two customers’ passport photos despite having never met the customers.
Sovereign’s permission was cancelled in July 2013.