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Director of brokerage banned for inadequate anti-fraud processes

The director of a mortgage brokerage has been banned for not having adequate systems in place to detect financial crime.

Martin Russell Lafrance, who was a director at Dorset-based General Finance CeDirector of brokerage banned for inadequate anti-fraud processesntre between October 31 2004 and December 19 2008, failed to ensure that reasonable checks were undertaken to verify the accuracy of information provided by customers or to identify irregularities in mortgage applications.

The regulator found that in one case a man who operated a motorcycle breaking business declared on his mortgage application that his income was £450,000 per annum. Yet a letter from his accountant on the customer file said his business made a pre-tax profit of £24,000.

However, GFC processed the application on the basis of an annual income of £450,000 and the applicant and his wife obtained a £600,000 mortgage.

Lafrance was the operations director responsible for an administrative team of seven staff, who processed the regulated mortgage contracts.

As an approved person holding controlled function CF1, he was under a duty of care to ensure that adequate systems and controls were in place and had the responsibility to understand his regulatory obligations.

In its final notice the FSA says: “The FSA has found that Lafrance is not a fit and proper person to perform any controlled function involving the exercise of significant influence in relation to any regulated activity carried on by any authorised person, exempt person or exempt professional firm, due to his lack of competence and capability.”

The FSA says there is no evidence to demonstrate that he was knowingly involved in the submission of false and misleading information to lenders to obtain mortgages and that he sought to establish systems and controls to prevent financial crime.

After receiving a decision notice in October 2011, Lafrance referred the matter to the Upper Tribunal on November 8, but withdrew it in January 2012.

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Comments
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  • Shaks 30th March 2012 at 4:27 pm

    £450,000 per annum income for a scrap dealer!!!!!!
    Now that clearly taking the p*ss and burying your head in the sand. Of course he knew it was a dodgy income. How many scrap dealers does he have as clients that have that much net income? His alarm bells must have been switched off ,or worse, the scrap metal man had stolen his alarm bells because they clearly weren’t ringing