A man has been sentenced for setting up more than seventy fake insurance policies for the musical industry, from which he profited over £106,000.
Steve Balcombe, 42, of Tonbridge, Kent, abused his position as an account executive at an insurance company to commit fraud by redirecting customers' payments, and refunds, to his own bank accounts. He also created fake customer accounts to generate repayments.
Balcombe was sentenced to two years imprisonment suspended for two years and 180 hours of unpaid work for two counts of Fraud by Abuse of Position at Maidstone Crown Court. He previously pleaded guilty in October 2020 to both counts. Proceedings will now commence under the Proceeds of Crime Act to recover the funds which were illegally obtained.
Balcombe held a position managing broker relationships for eight years and had worked for the company in question, which specialises in insurance for musical instruments, for eleven in total. After being dismissed for gross misconduct in August 2019, Balcombe’s employer gained access to his work mailbox, which revealed discrepancies between his work and management of accounts.
Detective Constable Kevin Carter, who led the investigation for the City of London Police’s Insurance Fraud Enforcement Department (IFED), said:
“Today’s outcome proves that crime really doesn’t pay. Balcombe found himself in a difficult financial position through a gambling addiction and should have sought help. Instead, he chose to defraud innocent strangers and his loyal employer, and lie to his own family.
“Balcombe has shown remorse for his actions, and should be grateful that his crimes were stopped before they had an even greater impact. Regardless, he has inflicted a heavy loss on a company which trusted him as an employee for over a decade and cost him his job.
“We will now make an application to the courts in order to recover the money that Balcombe stole and return these funds to the insurer.”
Two months after Balcombe’s dismissal, the City of London Police’s Insurance Fraud Enforcement Department (IFED) initiated an investigation, finding evidence that proved the employer’s suspicions.
Emails uncovered 62 invoices that were sent by Balcombe to customers containing incorrect information for policies. It became clear that these policies had not been set up in the company’s policy admin system, meaning that they did not exist and the holders technically were not covered. Balcombe directed the unknowing holders of these fake policies to pay the premiums into his personal bank account, amounting to over £8,000.
A further ten policies were detected that had been added to the policy admin system, but had been arranged by Balcombe without the necessary authority. The payments for these – over £1,000 in total - were also transferred by customers to Balcombe’s personal bank account.
Investigations revealed that this was not his only method of committing fraud: Balcombe also targeted clients in receipt of a ‘Low Claims Rebate’. The insurer supports certain businesses, such as schools, societies and orchestras, by offering to return a percentage of the premium paid, providing that the policy meets certain criteria, e.g. claims do not surpass the specified amount. Over the course of two years, Balcombe misdirected repayments intended for genuine customers to his own bank account, and also created fake accounts to generate further repayments, pocketing over £97,500.
Balcombe became so immersed in his deception that he even implicated his own family in his fraudulent activity, directing some of the payments to bank accounts belonging to his mother and partner: whilst they were aware of the transfers, Balcombe had assured them that the payments were genuine.
In addition to compensating the customers who had lost their Low Claims Rebate on account of Balcombe’s crimes, the insurer honoured all 72 fake and invalid policies set up by their former employee. The total value of all the items insured under these policies came to almost £9.3 million, meaning, had claims been made by the policy owners, the insurer would have incurred a serious loss.