Is Elliot Morley now toast?

Apparently he claimed £16,000 in mortgage interest payments on a house where the mortgage was already paid off. This is now getting to the point where claims of "it was within the rules" can surely no longer be applied. Can someone explain to me how what Morley is alleged to have done here is not fraudulent?

There are already murmurings about a possible by election and I would not be surprised if his majority of 8,963 was not overturned by the voters of Scunthorpe in disgust at this.