Philip Bates who operated from offices in Bedford was found guilty of fabricating business to maximise his commissions and was jailed by HHJ Ainley at Croydon Crown Court for five years and disqualified from acting as a company director for seven years. Confiscation proceedings have been postponed to a later date.
The fraud involved Mr Bates’ running of his businesses Anderson Owen Ltd and Transtone Consulting Ltd (trading as Hammond Direct) in 2004. It concerned the “sham sale” by Mr Bates of the financial products of 17 insurance companies to over 100 customers.
Many of Bates’ customers were unaware that financial products had been taken out in their names. Others were embroiled in a scheme whereby products were purchased not because they were needed or required but because Bates wanted the up front commission.
The two businesses subsequently went into liquidation and Anderson Owen ceased to be authorised by the Financial Services Authority. Shortly before the frauds came to light Bates left the country.
Arrangements between insurance companies and IFA’s provide that if a policy is cancelled before a certain number of premiums have been paid the insurance companies are entitled to a pro rata “clawback” of commissions paid. However, when the insurance companies tried to clawback monies paid over the company accounts were empty. In fact, as the commissions had come in they had been swiftly transferred by Bates to his personal bank accounts first in Jersey, then in Guernsey, finally ending up in an account in Monaco in the name of Acorn Commercial Ventures Ltd for which he had power of attorney.
During the early phase of the investigation Bates’ assets were traced and a restraint order was issued freezing the Monaco account in early 2006.
The victims were the product providers who paid out undeserved commission on policies which were not wanted or genuinely required. Customers who bought the policies were also victims in that policies were taken out without their knowledge and consent causing them financial loss.