Broker found guilty of fraud

Broker found guilty of fraud | Insurance Business

Broker found guilty of fraud
The former boss of Herbert Insurance Group, Grant Herbert, has been found guilty of 24 charges and not guilty of two others after using clients’ payments to prop up his company in a so-called ‘money merry-go-round’.

Herbert, 62, was found guilty on 17 charges under the Crimes Act and seven under the Secret Commissions Act after a jury trial at Auckland District Court yesterday, the New Zealand Herald reported.

The company, which had around 4000 clients throughout New Zealand, was found owing $3.1 million to insurers when it was liquidated in 2011.

Between 2005 and2011 Herbert had failed to forward to insurers about $2.5m of premiums he had received from customers, leaving some uninsured, the court heard.
The Serious Fraud Office said Herbert had also used the money for paying staff wages and rent.

Herbert was also found guilty of several offences relating to giving an employee of a customer secret commissions for referring insurance business to HIG.

SFO director Julie Read said Herbert breached the confidence and trust of both the insurers he worked with and his clients, many of whom were exposed to significant losses, the Herald said.

"The offending Mr Herbert engaged in undermines the insurance broking industry and the insurance industry itself, which is largely based on trust," she said.

Herbert is due for sentencing in October.