Broker fined and banned over mortgage fraud

The FSA has banned and fined mortgage adviser Gareth Flanagan £95,200 for personal mortgage fraud and regulatory failings.

Flanagan was the sole owner and director of Londonderry-based GMF Marketing Services Limited (GMF).

He was found to have submitted eight mortgage applications to lenders in his own name, containing false information over a two-year period. The false information related to income declarations, residential and employment details, and information about the purpose of the mortgage.

Flanagan was also sanctioned for failing in his duty to oversee GMF’s compliance with regulatory requirements and standards. He failed to take reasonable steps to ensure that GMF did not submit false and misleading information to mortgage lenders about customers’ incomes. Also, he failed to establish and maintain adequate systems and controls at GMF to ensure it made suitable personal recommendations to its customers.

The FSA also found he didn’t ensure that the competence and performance of GMF’s advisers were adequately monitored.

He co-operated with the FSA’s investigation and agreed to settle at an early stage.

GMF has retained its permission to do regulated business, as it is now controlled by a new set of shareholders and approved directors who are independent of Gareth Flanagan.

Tom Spender, the FSA’s head of retail enforcement, said: “It is not acceptable for mortgage brokers to disregard the requirements and standards of the regulatory system