An investigation by the FSA revealed Byrne accepted mortgage referrals from an introducer but failed to undertake due diligence or any basic checks on client information supplied by the introducer. As a result, he submitted seven mortgage applications containing false and misleading information; in fact at least one of the customers did not exist.
Byrne was also found to have certified a number of supporting documents, despite never having seen the originals. As a result, mortgage applications were submitted using erroneous information, such as:
• A bank statement for one applicant that contained differing sort codes and account numbers on different pages;
• Two applications made using false passports; and
• Payslips supposedly from different employers yet using identical formatting.
When questioned by the FSA, Byrne confessed that no checks were in place at Forest Financial to help reduce the risk of his business being used to commit mortgage fraud.
Margaret Cole, director of enforcement and financial crime at the FSA, said: “Byrne acted recklessly by accepting business from introducers without undertaking any due diligence. This made him an easy target for the introducer to obtain mortgage advances from lenders on a fraudulent basis, which could have been prevented if Forest Financial had put in place basic financial crime checks.
“Byrne is paying a heavy but necessary price. This prohibition serves as another warning to mortgage brokers who accept business from introducers in suspicious circumstances without doing the proper checks.”
With Byrne now prohibited and Forest Financial without sufficient resources to operate, the FSA has cancelled the permission of the firm.
Byrne was the only adviser at Forest Financial, which was authorised by the FSA to arrange mortgage contracts on behalf of consumers.
