Last batch of defendants charged by ICAC in $52m dummy agents commissions fraud case jailed

A corruption investigation by the ICAC earlier revealed that a branch manager of an insurer had conspired with several dummy insurance agents recruited by her to deceive two insurers into releasing commissions in the total sum of about $52 million by making false representations that the dummy insurance agents had handled 478 insurance policies. While the main culprit and 10 dummy insurance agents were earlier sentenced to jail terms up to 46 months following their guilty pleas, the last batch of six defendants were today (November 21) sentenced to jail terms ranging from 12 to 21 months at the District Court.

The six defendants, aged between 25 and 39, were purported insurance agents of FWD Life Insurance Company (Bermuda) Limited (FWD) and Sun Life Hong Kong Limited (Sun Life HK) at the material time. Leung Tsz-wing, Mo Wing-han and Woo Kin-leung had entered guilty pleas, while Lo Nga-wing, Ngan Tsz-ting and Kong Tsz-ying were convicted after trial.

In sentencing, Judge Mr Josiah Lam Wai-kuen reprimanded the defendants for failing to uphold the professional conduct expected of insurance agents, being lured by the main culprit to commit the offences of conspiracy to defraud and conspiracy to money laundering in the present case.

A total of 17 defendants were charged in the present case with 20 offences – two of conspiracy to defraud, contrary to the Common Law; and 18 of conspiracy to deal with property known or believed to represent proceeds of an indictable offence (conspiracy to launder crime proceeds), contrary to section 25(1) of the Organized and Serious Crimes Ordinance and section 159A(1) the Crimes Ordinance.

The main culprit in the present case, Lo Yin-wa, then branch manager of FWD, had earlier pleaded guilty to the 20 charges and was sentenced to 46 months’ imprisonment. Ten other dummy insurance agents, who had entered guilty pleas, received jail terms ranging from 11 to 22 months.

The ICAC has always attached high importance to upholding integrity in the insurance sector. The Commission will continue to collaborate with the industry to provide integrity training for insurance practitioners, helping them understand common corruption risks. The ICAC has also developed a Corruption Prevention Guide for Insurance Companies to assist insurance companies in strengthening their corruption prevention capabilities in key operational areas, fostering a probity culture in the industry.

The ICAC investigation arose from a corruption complaint against dummy insurance agents. Enquiries revealed that between February 2016 and November 2020, Lo Yin-wa had recruited co-defendants in the case and others to join Sun Life HK or FWD. Lo Yin-wa told some of the recruited persons that they were dummy insurance agents and were not required to source any clients after joining the insurers.

The ICAC investigation revealed that Lo Yin-wa had conspired with other FWD insurance agents to falsely represent that the FWD insurance agents recruited by Lo Yin-wa were the handling agents of 272 insurance policy applications. In addition, Lo Yin-wa had conspired with then unit manager of Sun Life HK Kwok Yun-fong and other Sun Life HK insurance agents to falsely represent that the Sun Life HK insurance agents recruited by Lo Yin-wa were the handling agents of 206 insurance policy applications.

As a result, Sun Life HK and FWD approved the above 478 applications and released commissions, incentives, bonuses and allowances totalling over $22 million to Lo Yin-wa’s team, and over $29 million to Kwok Yun-fong’s team.

Enquiries also revealed that the above 478 insurance policy applications mostly involved high commission rate insurance products. In the end, most of the insurance policies concerned lapsed after subsequent premiums were not paid.

Lo Yin-wa had requested the dummy insurance agents to return most of the payments to her after receiving commissions and other payments from the insurers. Individuals involved in the case then laundered crime proceeds totalling about $47 million in relation to the scheme through 23 bank accounts, which in fact were controlled by Lo Yin-wa, to receive the commissions and other payments concerned, the court heard.

FWD and Sun Life HK rendered full assistance to the ICAC during its investigation into the case.

The prosecution was today represented by prosecuting counsel Franco Kuan, assisted by ICAC officer William Leung.