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Ghost Insurance Couple are Busted!

We are constantly told that there is no such thing as 'easy money' – and perhaps this news story underlines this! Whilst this couple amassed money-aplenty over recent years, they have finally been caught. The worrying aspect of this is the potential danger they caused to the clients they so callously failed to insure correctly.

A couple from Westgate-on-Sea in Kent who funded a luxury lifestyle through motor insurance fraud and a £340,000 tax evasion, have been jailed following an investigation led by HR Revenue and Customs (HMRC). Elina Jaksone and Gagik Kyriacos Manucharyan were sentenced at Canterbury Crown Court on April 9th. Jaksone was locked up for two years while Manucharyan will be in prison for three years. Manucharyan was found guilty on each of three counts of insurance fraud, and Jaksone to two years imprisonment for each of three counts of insurance theft.

The couple failed to declare or pay tax on their £920,000 earnings as 'ghost' insurance brokers. They used criminal proceeds to buy a £365,000 house, fund private education and buy two Mercedes cars – one of which cost £56,000. They also enjoyed frequent holidays to luxury destinations including Jamaica and Mauritius.

The couple's motor insurance fraud (an activity known as Ghost Insurance) involved the supply of false and misleading information to insurance companies when arranging policies for their clients. Jaksone and Manucharyan posed as their clients, providing the insurance companies with only limited information. This allowed the clients, who were mainly Eastern European resident in the UK, to buy cheaper insurance policies – but the lies told to the insurance companies by Jaksone and Manucharyan meant the policies were potentially void. This left their clients without insurance cover and therefore driving illegally. The couple pocketed about £100 a time for each policy they arranged, raising £920,000 in the process, and none of this income was ever declared to HMRC.

As if this wasn't enough, Jaksone also claimed £82,000 in tax credits and pension credits by pretending to be a single mother with high childcare costs. The pair had denied insurance fraud but were found guilty after a seven week trial in 2012. Both had admitted tax fraud, and Jaksone also admitted to tax credit and benefit fraud.

Sentencing the couple, His Honour Judge James Mahoney said that the couple were “greedy and selfish” and “couldn't care less whether their customer' insurance policies were void”

Ghost brokers are unscrupulous middlemen posing as insurance brokers and who target vulnerable groups – such as younger drivers and those who have recently moved to the UK. They tend to advertise in local newspapers, on classified websites – or even accost shoppers with leaflets promising cash-strapped drivers a massive saving on their car insurance. These 'middlemen' then provide false information to the legitimate insurance companies, or if they can't even be bothered to do this, they simply produce false policy certificates.

How can you protect yourself from these sharks?

Well, the first rule is that if it is too good to be true, it is probably not for real! If you have any doubts about the legitimacy of your insurance, go to the official Motor Insurance Database (askmid.com) and enter your registration number. If your car is not listed, you may not be insured. If you are still suspicious even though your registration number is listed suggesting you are insured, talk to your insurer immediately and go through your policy certificate with them. If you suspect fraud, inform the police.

Always beware – if a broker does not quote a physical address or a landline number on the website or printed materials and asks for cash-only payments, then walk away fast! Whilst the Association of British Insurers (ABI) are working hard to overcome these fraudulent practices, it pays to be vigilant when shopping for your insurance policies.

Professional advice need not come dear. One call to our friendly team at Westhill Insurance Services will make sure you have professional, friendly and sensible advice. As an independent insurance broker we will shop around to make sure we find the best possible quote to suit your budget. With all our years of experience, we know how to look after you – and with us, what we say is what you get! Don't take chances with something as important as insurance – go to the good guys, Westhill Insurance Services. We are on your side!

Contact Westhill Insurance Services, today.

Posted on 14th May, 2013