The suspects, still unidentified, claimed to own a £5m property in Bayswater in London and attempted to secure a £1.5m bridging loan against it.
Masthaven underwriters became suspicious of the application when they liaised with utility companies for proof of address.
The lender then contacted the City of London police and discovered that the passport number used for identification verification was of a deceased nine year-old boy and the photos in the passport were replaced.
The police then held a sting operation with the aid of Masthaven and its managing director Andrew Bloom.
An undercover police officer, disguised as a personal assistant to Bloom, sat in on a meeting with Bloom at a Marriott Hotel in London.
During the operation six people were arrested and three have since pleaded guilty.
Bloom gave evidence for three consecutive days in early January.
The case remains on-going and sentences for the three that pleaded guilty have yet to be announced.
Bloom said: “I’m delighted that the stringent underwriting requirements of Masthaven’s team caught them out and we’re delighted that we were able to assist in their arrest.”
