11 Sep 2014

Insurance broker guilty on 24 charges

5:30 pm on 11 September 2014

The owner of a failing insurance brokerage used clients' payments to prop up his company in a so-called "money merry-go-round".

Grant Malcolm Herbert was found guilty of 24 charges and not guilty of two others at the Auckland District Court today.

The 63-year-old ran Herbert Insurance Group Limited, which owed $3.1 million to insurers when it was liquidated in 2011.

The Serious Fraud Office said although $2.5 million in customers' insurance payments were meant to be forwarded, some were used for paying staff wages and rent.

In some cases, Herbert's clients were left un-insured.

SFO director Julie Read said Herbert breached the confidence and trust of both the insurers he worked with and his clients, many of whom were exposed to significant losses.

She said Herbert's offending undermined the insurance industry, which is largely based on trust.

Herbert is due to be sentenced in October.