Ex-district manager of insurer charged by ICAC for conspiring with downline agents in $1.4m commissions fraud gets 41 months’ jail

The ICAC had earlier charged a former district manager of an insurer and her three downline agents of different tiers for conspiring together to defraud the insurer of commissions, overriding commissions and bonuses totalling over $1.4 million by making false representations that the lowest tier agent had handled various insurance policy applications fabricated by them. The former district manager and two of the downline agents were today (August 1) sentenced at the District Court to jail terms ranging from 20 to 41 months.

The four defendants were Hui Ngai-hing, 61, former district manager of FTLife Insurance Company Limited (FTLife) (now renamed as Chow Tai Fook Life Insurance Company Limited (CTF Life)); two former agency managers of FTLife Monica Wong Fung-yee and Yee Sheung-wai, aged 66 and 40; and Chau Ching-man, 33, former insurance agent of FTLife. They were jointly charged with one count of conspiracy to defraud, contrary to the Common Law.

Hui and Wong, both convicted after trial, each received a jail term of 41 months today. Yee, who earlier pleaded guilty to the charge, was jailed for 20 months. Co-defendant Chau, was earlier sentenced to 10 months’ imprisonment after entering a guilty plea.

In sentencing, Judge Ms Ada Yim Shun-yee reprimanded the defendants for breaching the trust placed in them and fabricating insurance policy applications for personal gains by making use of the loopholes in the approval of insurance policies. District manager Hui and agency manager Wong were the instigators gaining most from the scam. They were each jailed for 41 months as they were equally culpable. The jail term of Yee, another agency manager, was reduced from 33 to 20 months in view of his guilty plea and assistance rendered to the prosecution in the trial.

The ICAC investigation stemmed from a corruption complaint in relation to insurance policy applications. The offence took place between July and September 2020, during which Hui was a district manager of insurer FTLife while Wong, Yee and Chau were her downline agents working in different tiers in descending order. Whenever Chau sold an insurance product, she and the three co-defendants would respectively receive a commission and overriding commissions. They would also be entitled to quarter-end bonuses and year-end bonuses when sales targets were achieved.

The court heard that at the material time, FTLife received 32 insurance policy applications purportedly handled by Chau. The four defendants falsely represented to FTLife that the applications were made by the relevant policyholders, deceiving FTLife into approving the applications and releasing the relevant wage payments, commissions, overriding commissions, quarter-end bonuses and year-end bonuses totalling over $1.4 million to the four defendants.

ICAC investigation revealed that Chau was not in Hong Kong when the insurance policies were taken out. In addition, most of the policyholders had no knowledge of the insurance policies and they did not take them out or pay any premium for the policies. Those insurance policies eventually lapsed due to default of payment of premiums.

Enquiries revealed that the premiums of some of the policies were in fact paid by Hui. After Yee and Chau had received the commissions, bonuses and payments from FTLife, they returned the whole sums to Hui and respectively received $5,000 and $3,000 in return.

CTF Life rendered full assistance to the ICAC during its investigation into the case.

The prosecution was today represented by prosecuting counsel Jacky Jim, assisted by ICAC officer Amy Tsui.

The ICAC has always attached high importance on upholding integrity in the insurance sector. The Commission will continue to collaborate with the industry to provide integrity training for insurance practitioners, helping both managerial and other ranks of staff understand common corruption risks. The “Corruption Prevention Guide for Insurance Companies” also assists insurance companies in building and strengthening their corruption prevention capabilities in key operational areas, fostering a probity culture in the industry. For more information on the ICAC’s preventive and educational services for the industry, please visit the Ethics Promotion Website for the Insurance Industry and Corruption Prevention Advisory Service Web Portal.