An IFA has been jailed for five years after being found guilty of scamming insurers out of £1m in up-front commissions.
The Serious Fraud Office (SFO) says Croydon-based Philip Bates used his businesses, Anderson Owen and Transtone Consulting, to sell financial products to over 100 customers who did not ask for them and pocketing the commission paid.
It says Bates would set up a product for a customer without telling them, or in some cases would purchase products that were not needed by a customer in order to access up-front payments.
After his businesses went into liquidation and FSA authorisation was withdrawn, Bates fled the country, preventing the insurance firms from using a claw-back clause to reclaim the commission .
He transferred the cash to bank accounts in Jersey and Guernsey before finally ending up in a Monaco business account.
In 2006, the SFO traced the funds and was able to freeze Bates's assets, and an investigation and trial has resulted in Bates being sentenced to five years in prison.
Up to 17 insurance companies are though to have lost out as a result of the fraud.
"The proper sale of financial products depends upon honesty, integrity and trust. Mr Bates systematically and dishonestly abused that trust to satisfy his own ends," says Anne-Marie Ottaway, acting case controller at the SFO.
"In his dealings both with his customers and the insurance companies with whom he operated he totally failed to observe the high personal standards the industry and the public have a right to demand and expect."
Contact: John Bakie, Tel: 020 7484 9805, e-mail: [email protected]IFAonline
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