Insurance agents charged as graft probe reveals $1.2m fraud and $2.7m money laundering
The ICAC today (September 14) charged three former insurance agents of an insurance company for allegedly conspiring with another then insurance agent to defraud the company of commissions and bonuses totalling about $1.2 million by making false representations on the handling insurance agent of four insurance policies, and conspiracy to launder over $2.7 million in crime proceeds.
The ICAC investigation arose from a corruption complaint. Upon completion of the investigation, the ICAC sought legal advice from the Department of Justice, which advised charging the trio with five offences – four of conspiracy to defraud, contrary to Common Law, and one of conspiracy to dealing 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 of the Crimes Ordinance.
The defendants are Li Chung-hing, 33, former assistant branch manager of AXA China Region Insurance Company Limited (AXA); and Tang Maurice Moses, 35, and Kong Ho-chi, 34, both former insurance agents of AXA. They were released on ICAC bail, pending their appearance in the Eastern Magistrates’ Courts on Thursday (September 16) for the case to be transferred to the District Court for plea.
At the material time, Li was an assistant branch manager of AXA and the up-line manager of Tang, Kong and a third insurance agent, who was referred by Kong to work at AXA.
AXA required an insurance agent to personally meet his client to explain the terms and conditions of an insurance policy. Upon approval of an insurance policy application and receipt of the relevant premium, AXA would release commission to the handling insurance agent, and overriding commission to his/her up-line manager and job referrer. AXA would also release various kinds of bonuses to insurance agents should they meet specified sales targets or the agents referred by them to work at AXA successfully sell any insurance product.
The offences took place between September 22, 2015 and September 25, 2017.
Three of the charges allege that Li and Tang conspired together and with the third insurance agent to defraud AXA by dishonestly falsely representing to the company that the insurance agent was the handling insurance agent of three insurance policy applications, and causing AXA to underwrite and issue those insurance policies and to pay commissions or other payments in relation to them.
Another charge alleges that Li and Kong conspired together and with the third insurance agent to defraud AXA by dishonestly falsely representing to the company that the insurance agent was the handling insurance agent of another insurance policy application, and causing AXA to underwrite and issue that insurance policy and to pay commission or other payments in relation to it.
AXA had paid the three defendants and the third insurance agent commissions and bonuses totalling about $1.2 million in connection with the four insurance policies and Kong’s referral of the third insurance agent to work at AXA.
The remaining charge alleges that Li and Kong conspired together and with the third insurance agent to deal with a total sum of over $2.7 million in a bank account held under the name of the insurance agent, knowing or having reasonable grounds to believe that the sum of money, in whole or in part, directly or indirectly represented any person’s proceeds of an indictable offence.
AXA had paid a total of over $2.7 million to the third insurance agent for his successful sale of insurance policies, including the aforesaid four insurance policies. ICAC enquiries revealed that the third insurance agent had never been involved in the sale of the insurance policies concerned.
AXA has rendered full assistance to the ICAC during its investigation into the case.