Brokerages set up to con $18m, court hears
Three people set up two insurance brokerages to swindle $18 million in sales commissions from New York Life Insurance and CMG Asia, a court heard yesterday.
Ting Yuen-man, 37, Barbara Lou Sun-yee, 38, and Lai Wai-ho, 31, deny a joint charge of conspiracy to defraud by inducing New York Life to pay commission to Silver World. Ting and Lou also deny another count of conspiracy to defraud by setting up Uniton, another company prosecutors say the pair established to claim commissions from New York Life and CMG.
Opening the case for the prosecution, Thomas Iu told the District Court the defendants sold 1,560 insurance policies by lying to clients, telling them their first-year premiums would be waived. Their lies enabled them to collect $18 million in advance commissions, Mr Iu said. The offences were committed between March 2002 and August 2004, he said. They used some of the funds to pay the first-year policy premiums. But when an unusual number of policies lapsed after the first year, New York Life and CMG Asia became suspicious and launched investigations.
The prosecutor said the 'free of charge' policies would inevitably lapse when premiums went unpaid after the 'free period' ran out. 'Some of those policyholders were simply indifferent as to whether or not such insurance policies would lapse,' Mr Iu said.
The court heard that by the time New York Life and CMG tried to recover the advance commissions, Silver World and Uniton had shut down. Lai has also pleaded not guilty to using a false certificate from Windsor University in Canada to deceive the Hong Kong Professional Insurance Brokers Association in June 2001.
The hearing before Deputy Judge Pang Chung-ping continues today.