Integrity Focus

The ICAC today (July 17) charged five former employees of an insurance company in two separate cases for their alleged involvement in a dummy agent scam as well as providing false information in insurance policy applications respectively to defraud the company of a total of $4.25 million in commissions and other payments. Three of the dummy insurance agents were also charged for allegedly handling over $2.3 million in crime proceeds.

In the first case, Chau Yui-kwan, 34, former assistant unit manager of China Taiping Life Insurance (Hong Kong) Company Limited (China Taiping), faces 18 counts of fraud, contrary to Section 16A(1) of the Theft Ordinance. Co-defendants, Choi Pui-ka, 32; Chang Kiu-sum, 32; and Sit Siu-hang, 30, all former business managers of China Taiping, each faces one count of dealing with property known or reasonably believed to represent proceeds of an indictable offence, contrary to Section 25(1) of the Organised and Serious Crimes Ordinance. The four defendants were released on ICAC bail, pending their appearance at the Eastern Magistrates’ Courts on Friday (July 19) for mention. The case will later be transferred to the District Court for plea.

At the material time, Chau was the former assistant unit manager of China Taiping and the upline manager of the three co-defendants as well as another insurance agent. China Taiping required all its agents to explain the terms and conditions of relevant insurance policies to their clients in person when selling an insurance product. The company prohibited its agents from providing any false information about the policyholder and the identity of the handling agent. China Taiping would issue commissions and other payments to the handling agent upon the approval of a policy application and receipt of the premium.

The offences took place between February 2021 and October 2022. The 18 fraud charges allege that Chau deceived China Taiping by falsely representing to the latter that Choi, Chang, Sit and another insurance agent were the handling agents of those 18 insurance policies, and causing China Taiping to underwrite and issue the insurance policies and to pay commissions and other payments in relation to them.

ICAC enquiries revealed that China Taiping had released a total of about $3.6 million of commissions and other payments to Choi, Chang, Sit and the said insurance agent in relation to the above-mentioned 18 insurance policies. A large proportion of the said payments were eventually received by Chau.

Another three charges allege that Choi, Chang and Sit, knowing or having reasonable grounds to believe that a total of over $2.3million in their three personal bank accounts, in whole or in part, directly or indirectly represented any person’s proceeds of an indictable offence, dealt with the money.

In a separate case, Lee Hon-yin, 28, former China Taiping insurance agent, faces two counts of fraud, contrary to section 16A(1) of the Theft Ordinance. Chau faces one count of forgery, contrary to Section 71 of the Crimes Ordinance. The duo were released on ICAC bail, pending their appearance at the Eastern Magistrates’ Courts on Friday (July 19) for plea.

In July 2021, China Taiping received two insurance policy applications which were purportedly taken out by a client and the insurance policies were sold by Lee. It is alleged that Lee had falsely represented to China Taiping that the applications were genuinely taken out by the client, causing China Taiping to approve the applications and release the commissions and other payments of over $650,000 to him. ICAC enquiries revealed that the client did not apply for the above-mentioned insurance policies, nor did she pay premiums for the policies.

Meanwhile, Chau had allegedly forged the signatures of a client and relevant persons on a document for transferring the rights and interests of an insurance policy, inducing China Taiping to believe that the application was submitted by a client.

China Taiping has rendered full assistance to the ICAC during its investigation into the cases.