Insurance fraudster fined, but this time it's the seller
Article by Simon Christopher
Posted: 15/5/2012 - Last updated: -
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Financial regulators have fined an insurance seller more than £300,000 for stealing customer premiums.
Donald Morgan, who jointly owned Donald Morgan Insurance Services with his wife Janet, admitted holding on to customer premium payments rather than passing them on to brokers. He created false reports and tampered with computer systems to cover up the deception.
Eventually Morgan realised his business would never grow enough that he could repay the money he had taken, so contacted the Financial Services Authority to admit his wrongdoing.
He was fined £222,504 to cover the stolen money and a further £112,700 as punishment. The figures came after a standard 30 percent discount for an early admission and cooperating with the regulation.
Janet Morgan did not take part in the fraud but was held responsible by the FSA for failing to notice it. Both she and Donald Morgan have been permanently banned from carrying out regulated financial services activity.
Fortunately financial and industry regulations meant that although Morgan had pocketed the payments, his customers remained protected and any claims would have been paid out.
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