Seventeen charged as ICAC graft probe reveals $43m dummy agents commissions fraud
2022-10-13
Seventeen persons were charged by the ICAC in the past two days (October 11 and 12) with conspiracy to defraud, revealed in the course of a corruption investigation. They allegedly took part in a dummy insurance agents scam to defraud two insurers of commission totalling over $43 million by making false representations that they had handled about 480 insurance policies. Some of them were also charged with money laundering for allegedly dealing with the commissions.
Ten insurance agents formerly employed by FWD Life Insurance Company (Bermuda) Limited (FWD) are Kwok Ho-leung, Chan Ka-yu, Lam Hiu-tung, Lam Wai-kit, Ngan Tsz-ting, Wong Bryant, Woo Kin-leung, Zhou Yutian, Kong Tsz-ying and Cheung Ho-cheung.
Seven co-defendants formerly employed by Sun Life Hong Kong Limited (Sun Life HK) are former unit manager Kwok Yun-fong; and six former insurance agents Tang Ho-lun, To Wai-to, Wong Lin-yan, Leung Tsz-wing, Mo Wing-han and Lo Nga-wing.
The 17 defendants, aged between 22 and 59, face a total of 17 charges – two of conspiracy to defraud, contrary to Common Law; and 15 of conspiracy to deal with property known or believed to represent proceeds of an indictable offence, contrary to Section 25(1) of the Organized and Serious Crimes Ordinance and Section 159A(1) the Crimes Ordinance.
The defendants were released on ICAC bail, pending their appearance at the Eastern Magistrates’ Courts tomorrow (October 14) for mention.
The alleged offences took place between February 2016 and November 2020. At the material time, the 10 former FWD insurance agents worked in the team of Kwok Ho-leung’s wife Lo Yin-wa, who was a branch manager. Meanwhile, Sun Life HK then unit manager Kwok Yun-fong was the up-line manager of the six remaining defendants. Except Kwok Ho-leung and Kwok Yun-fong, the six then insurance agents of Sun Life HK and nine then insurance agents of FWD were said to be dummy insurance agents.
One of the charges alleges that Kwok Ho-leung, Kwok Yun-fong and the six then insurance agents of Sun Life HK conspired together and with Lo Yin-wa and others to defraud Sun Life HK by dishonestly falsely representing to Sun Life HK that the six persons were the respective handling agents of 206 insurance policy applications; and causing Sun Life HK to approve the applications and to pay commissions, incentives, bonuses and allowances to Kwok Yun-fong’s team.
Another charge alleges that Kwok Ho-leung and the nine then insurance agents of FWD conspired together and with Lo Yin-wa and others to defraud FWD by dishonestly falsely representing to FWD that 12 persons, including the nine aforesaid persons, were the respective handling agents of 272 insurance policy applications; and causing FWD to approve the applications and to pay commissions, incentives, bonuses and allowances to Lo Yin-wa and the 12 persons.
It is also alleged that 15 of the defendants, except Kwok Ho-leung and Kwok Yun-fong, had each conspired with Lo Yin-wa to deal with a total sum of about $41 million in 20 bank accounts of them, knowing or having reasonable grounds to believe that it in whole or in part directly or indirectly represented the proceeds of an indictable offence.
The ICAC investigation arose from a corruption complaint. Investigation revealed that Lo Yin-wa had allegedly recruited Kwok Yun-fong and others to join either Sun Life HK or FWD, and she told some of them that they were not required to source any clients.
The above 478 insurance policy applications mostly involved high commission rate insurance products. After approving most of the applications, Sun Life HK and FWD respectively released commissions, incentives, bonuses and allowances totalling over $29 million and over $14 million to the 15 defendants who purportedly handled them and their up-line managers, including Kwok Yun-fong and Lo Yin-wa. Should Sun Life HK and FWD know that the 15 defendants were not the handling agents of those insurance policies, they would not have released the above commissions, incentives, bonuses and allowances.
The bank accounts used for receiving the above commissions, etc. were allegedly controlled by Lo Yin-wa. Most of the insurance policies concerned eventually lapsed after subsequent premiums were not paid.
Upon completion of the investigation, legal advice was sought from the Department of Justice (DoJ). Pursuant to the legal advice, Lo Yin-wa was earlier charged with conspiracy to defraud for her alleged role in the scam. Seventeen others were charged on October 11 and 12 upon receipt of further legal advice from the DoJ.
As the relevant corruption investigation is continuing, the ICAC does not rule out further law enforcement actions.
FWD and Sun Life HK have rendered full assistance to the ICAC during its investigation into the cases.
In order to assist the insurance industry in strengthening its corruption prevention capabilities in key operational areas such as verifying the commission of agents, the Corruption Prevention Department had collaborated with the industry to produce the “Corruption Prevention Guide for Insurance Companies”: cpas.icac.hk/EN/Info/Lib_List?cate_id=3&id=2568. The Community Relations Department of the ICAC will continue to collaborate with the industry for providing integrity training to insurance practitioners. Insurance companies and practitioners may also refer to the dedicated webpage tailor-made for the industry: hkbedc.icac.hk/insurance/en.
Ten insurance agents formerly employed by FWD Life Insurance Company (Bermuda) Limited (FWD) are Kwok Ho-leung, Chan Ka-yu, Lam Hiu-tung, Lam Wai-kit, Ngan Tsz-ting, Wong Bryant, Woo Kin-leung, Zhou Yutian, Kong Tsz-ying and Cheung Ho-cheung.
Seven co-defendants formerly employed by Sun Life Hong Kong Limited (Sun Life HK) are former unit manager Kwok Yun-fong; and six former insurance agents Tang Ho-lun, To Wai-to, Wong Lin-yan, Leung Tsz-wing, Mo Wing-han and Lo Nga-wing.
The 17 defendants, aged between 22 and 59, face a total of 17 charges – two of conspiracy to defraud, contrary to Common Law; and 15 of conspiracy to deal with property known or believed to represent proceeds of an indictable offence, contrary to Section 25(1) of the Organized and Serious Crimes Ordinance and Section 159A(1) the Crimes Ordinance.
The defendants were released on ICAC bail, pending their appearance at the Eastern Magistrates’ Courts tomorrow (October 14) for mention.
The alleged offences took place between February 2016 and November 2020. At the material time, the 10 former FWD insurance agents worked in the team of Kwok Ho-leung’s wife Lo Yin-wa, who was a branch manager. Meanwhile, Sun Life HK then unit manager Kwok Yun-fong was the up-line manager of the six remaining defendants. Except Kwok Ho-leung and Kwok Yun-fong, the six then insurance agents of Sun Life HK and nine then insurance agents of FWD were said to be dummy insurance agents.
One of the charges alleges that Kwok Ho-leung, Kwok Yun-fong and the six then insurance agents of Sun Life HK conspired together and with Lo Yin-wa and others to defraud Sun Life HK by dishonestly falsely representing to Sun Life HK that the six persons were the respective handling agents of 206 insurance policy applications; and causing Sun Life HK to approve the applications and to pay commissions, incentives, bonuses and allowances to Kwok Yun-fong’s team.
Another charge alleges that Kwok Ho-leung and the nine then insurance agents of FWD conspired together and with Lo Yin-wa and others to defraud FWD by dishonestly falsely representing to FWD that 12 persons, including the nine aforesaid persons, were the respective handling agents of 272 insurance policy applications; and causing FWD to approve the applications and to pay commissions, incentives, bonuses and allowances to Lo Yin-wa and the 12 persons.
It is also alleged that 15 of the defendants, except Kwok Ho-leung and Kwok Yun-fong, had each conspired with Lo Yin-wa to deal with a total sum of about $41 million in 20 bank accounts of them, knowing or having reasonable grounds to believe that it in whole or in part directly or indirectly represented the proceeds of an indictable offence.
The ICAC investigation arose from a corruption complaint. Investigation revealed that Lo Yin-wa had allegedly recruited Kwok Yun-fong and others to join either Sun Life HK or FWD, and she told some of them that they were not required to source any clients.
The above 478 insurance policy applications mostly involved high commission rate insurance products. After approving most of the applications, Sun Life HK and FWD respectively released commissions, incentives, bonuses and allowances totalling over $29 million and over $14 million to the 15 defendants who purportedly handled them and their up-line managers, including Kwok Yun-fong and Lo Yin-wa. Should Sun Life HK and FWD know that the 15 defendants were not the handling agents of those insurance policies, they would not have released the above commissions, incentives, bonuses and allowances.
The bank accounts used for receiving the above commissions, etc. were allegedly controlled by Lo Yin-wa. Most of the insurance policies concerned eventually lapsed after subsequent premiums were not paid.
Upon completion of the investigation, legal advice was sought from the Department of Justice (DoJ). Pursuant to the legal advice, Lo Yin-wa was earlier charged with conspiracy to defraud for her alleged role in the scam. Seventeen others were charged on October 11 and 12 upon receipt of further legal advice from the DoJ.
As the relevant corruption investigation is continuing, the ICAC does not rule out further law enforcement actions.
FWD and Sun Life HK have rendered full assistance to the ICAC during its investigation into the cases.
In order to assist the insurance industry in strengthening its corruption prevention capabilities in key operational areas such as verifying the commission of agents, the Corruption Prevention Department had collaborated with the industry to produce the “Corruption Prevention Guide for Insurance Companies”: cpas.icac.hk/EN/Info/Lib_List?cate_id=3&id=2568. The Community Relations Department of the ICAC will continue to collaborate with the industry for providing integrity training to insurance practitioners. Insurance companies and practitioners may also refer to the dedicated webpage tailor-made for the industry: hkbedc.icac.hk/insurance/en.