Agents sentenced for $110,000 insurance fraud
2015-8-26
Two former agents of an insurance company, who were charged by the ICAC, were today (Wednesday) sentenced at the District Court for defrauding the company of commissions amounting to over $110,000 by using bogus insurance policies.
Tong Kam-sun, 52, a team manager formerly employed by Zurich Life Insurance Company Limited (Zurich), received a jail term of 30 months, while Cheung Wai-ho, 31, a former insurance agent of Zurich, was ordered to perform 200 hours of community service.
In sentencing, Judge Stanley Chan Kwong-chi said the offences committed by Tong constituted a serious breach of trust placed in him by his then employer and policy holders concerned.
The judge added that Tong deserved a deterrent jail sentence as he already had a previous criminal conviction of insurance fraud.
Tong earlier pleaded guilty to 10 charges – one of conspiracy to defraud, four of fraud, one of attempted fraud and four of using a false instrument, while the prosecution offered no evidence to eight other similar offences against him. Cheung was found guilty of a similar charge of conspiracy to defraud.
The case arose from a corruption complaint. Subsequent ICAC enquiries revealed the above offences.
The court heard that at the material time, Tong was employed by Zurich to sell and promote its insurance products, while Cheung was his down-line insurance agent.
Between November 2007 and July 2008, Tong conspired with another down-line insurance agent to defraud Zurich by falsely representing that 17 insurance applications were genuine, with the agent named as the handling agent.
As a result, Zurich was induced to offer policies to the proposed policy holders, and pay various commissions and/or allowances to Tong and the down-line insurance agent.
After receiving the commissions and allowances from Zurich, the down-line insurance agent transferred various sums of money totalling about $100,000 to the bank account of Tong’s wife on 11 occasions.
The court heard that between November 2010 and November 2011, Tong falsely represented to Zurich that the declarations made in four other insurance policy applications were genuine, and with intent to defraud, induced Zurich to approve those applications, and pay him commissions of over $2,300 in total.
In November 2011, Tong falsely represented to Zurich that the declaration made in another insurance policy application was genuine, and with intent to defraud, attempted to induce Zurich to approve the application.
Between October 2010 and February 2012, Tong also used a letter and three forms which he knew to be false, with the intention of inducing Zurich to accept them as genuine.
The court heard that in November 2010, Cheung submitted an insurance policy application form to Zurich, purporting that he had secured the application from a nephew of Tong. In fact, Cheung did not know him, and took out the policy without his knowledge or consent.
Upon receipt of a commission of over $10,500 from Zurich, Cheung transferred the same amount into the bank account of Tong, the court was told.
Zurich had rendered full assistance to the ICAC during its investigation.
The prosecution was today represented by prosecuting counsel Terence Wai, assisted by ICAC officer Freddy Yip.
Tong Kam-sun, 52, a team manager formerly employed by Zurich Life Insurance Company Limited (Zurich), received a jail term of 30 months, while Cheung Wai-ho, 31, a former insurance agent of Zurich, was ordered to perform 200 hours of community service.
In sentencing, Judge Stanley Chan Kwong-chi said the offences committed by Tong constituted a serious breach of trust placed in him by his then employer and policy holders concerned.
The judge added that Tong deserved a deterrent jail sentence as he already had a previous criminal conviction of insurance fraud.
Tong earlier pleaded guilty to 10 charges – one of conspiracy to defraud, four of fraud, one of attempted fraud and four of using a false instrument, while the prosecution offered no evidence to eight other similar offences against him. Cheung was found guilty of a similar charge of conspiracy to defraud.
The case arose from a corruption complaint. Subsequent ICAC enquiries revealed the above offences.
The court heard that at the material time, Tong was employed by Zurich to sell and promote its insurance products, while Cheung was his down-line insurance agent.
Between November 2007 and July 2008, Tong conspired with another down-line insurance agent to defraud Zurich by falsely representing that 17 insurance applications were genuine, with the agent named as the handling agent.
As a result, Zurich was induced to offer policies to the proposed policy holders, and pay various commissions and/or allowances to Tong and the down-line insurance agent.
After receiving the commissions and allowances from Zurich, the down-line insurance agent transferred various sums of money totalling about $100,000 to the bank account of Tong’s wife on 11 occasions.
The court heard that between November 2010 and November 2011, Tong falsely represented to Zurich that the declarations made in four other insurance policy applications were genuine, and with intent to defraud, induced Zurich to approve those applications, and pay him commissions of over $2,300 in total.
In November 2011, Tong falsely represented to Zurich that the declaration made in another insurance policy application was genuine, and with intent to defraud, attempted to induce Zurich to approve the application.
Between October 2010 and February 2012, Tong also used a letter and three forms which he knew to be false, with the intention of inducing Zurich to accept them as genuine.
The court heard that in November 2010, Cheung submitted an insurance policy application form to Zurich, purporting that he had secured the application from a nephew of Tong. In fact, Cheung did not know him, and took out the policy without his knowledge or consent.
Upon receipt of a commission of over $10,500 from Zurich, Cheung transferred the same amount into the bank account of Tong, the court was told.
Zurich had rendered full assistance to the ICAC during its investigation.
The prosecution was today represented by prosecuting counsel Terence Wai, assisted by ICAC officer Freddy Yip.