Thursday 16th October 2014
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Grant Herbert, the former owner and director of failed insurance broking firm Herbert Insurance Group, has been jailed for four years six months after being found guilty of fraud last month.
Herbert was today sentenced in the Auckland District Court after being found guilty of 17 Crimes Act charges and seven Secret Commissions Act charges, the Serious Fraud Office said in a statement. Herbert had received clients' premiums, but failed to forward about $2.5 million of that to insurers, leaving some customers uninsured, while diverting that money to pay operating expenses for the firm. He also paid secret commissions to an employee of an insured customer, overcharging that firm about $220,000.
Before the trial, Herbert had pleaded guilty to using a forged document in relation to obtaining a credit facility.
"Clients who were uninsured as a result of Mr Herbert’s offences were exposed to a risk of loss many times greater than the cost of the premiums which they paid in good faith," SFO director Julie Read said. "Mr Herbert’s conduct has also had the potential to damage the community’s confidence in dealing with brokers and thereby damaged the interests of all those brokers who act honestly."
Herbert Insurance was put into liquidation and receivership in March 2011 with a shortfall of about $3.1 million owed to insurers. Acting on complaints about the shortfall, the SFO began an investigation that same month on the basis that serious or complex fraud had been committed.
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