A man from London has been sentenced for fraudulently obtaining more than 40 car insurance policies while posing as a broker and pocketing nearly £18,000 over a five-week period.
Gurwinder Virdee, 30, of Southall, London, acted as an illegal intermediary – also known as a ‘ghost broker’ - for esure, offering his victims cheap insurance deals. In reality, Virdee was not a broker with the insurance company and used false details and forged documentation to reduce the cost of the premium.
After identifying a pattern of suspicious policies, esure ran further enquiries which led them to believe that a single person was setting up these policies and that they were possibly fraudulent. The insurer then referred the case to the City of London Police’s Insurance Fraud Enforcement Department (IFED). The Insurance Fraud Bureau (IFB) supported the investigation by collecting evidence of fraudulent activity from insurers.
Virdee was sentenced to 23 months and two weeks imprisonment, suspended for two years, 30 days Rehabilitation Activity Requirement (RAR), 140 hours of unpaid work to be completed within 12 months and an electronically-tagged curfew for three months on Wednesday July 21 at Inner London Crown Court. He was also ordered to repay £1,000 in costs plus surcharges and to forfeit his mobile phone, laptop and documents used to commit the fraud.
Virdee previously pleaded guilty in June this year to fraud by false representation, money laundering, forgery and to the offence of being an unauthorised broker under the Financial Services and Markets Act (FSMA).
IFED had already seized assets totalling £60,000 from Virdee in 2019 using civil powers of an Account Seizure Order under the Proceeds of Crime Act (POCA). This income is believed to have been generated from criminality undertaken outside of the date range for this case.
Detective Sergeant Matthew Hussey, from the City of London Police’s Insurance Fraud Enforcement Department, said:
“Whilst his immorality was clear from the start of this investigation, we unearthed the corrupt lengths Virdee went to in order to aid his crime as we dug deeper into this case.
“Virdee targeted innocent members of the public who did not have an understanding of insurance in the UK, taking advantage of this vulnerability for his own financial gain. These victims had trusted him as a legitimate broker after being referred by friends, genuinely believing that he would help them to insure their first vehicle in this country.
“As well as exploiting members of the public, Virdee also used the home address of a childhood friend to conduct some of his business, showing that he had no qualms in potentially incriminating those close to him.
“Thankfully, the eagle-eyed team at esure spotted this pattern of fraudulence and referred the case over to IFED. This collaborative approach between insurance companies and law enforcement means that together we can protect honest policyholders and bring ‘ghost brokers’ to justice.”
Initial enquiries made by esure found that 42 policies had been taken out between May and June 2017 from either the same location or a particular device. A significant number of the policies were also accompanied by electronic copies of no claims discount documents from the same insurance company. This insurer later confirmed that they had not provided these documents and that they were fake.
esure contacted all of the known policyholders to inform them that their policies were fraudulent and then referred the case to IFED for further investigation.
A number of the victims who were contacted provided the same three names for the broker they had dealt with: Gurwinder, Gurwinder Singh or Mr Virdee. They also provided the same contact number and bank account details, both of which were associated with Virdee.
The accounts provided by these victims also revealed that Virdee had sought certain vulnerabilities. The policyholder was usually referred to Virdee by a friend or colleague, and tended to be a newly-qualified driver or inexperienced in taking out insurance in the UK.
Virdee was subsequently arrested by IFED in September 2018. Upon searching his property, officers found devices which had been used to commit the fraud, including a mobile phone with numerous Whatsapp conversations relating to setting up policies on behalf of ‘customers’. A laptop was also seized, which had been used to produce the fraudulent no claims bonus documents.
Analysis of Virdee’s bank accounts uncovered receipt of significant funds, which did not correspond to the salary he received as an employee at his local housing association. Over a five-week period, sums of £150 to £200 were paid into Virdee’s account, with many using the reference ‘insurance’. These payments totalled £17,700, which was significantly higher than Virdee’s salary of around £1,300 per month.
Officers also discovered a website for the company Virdee Brokerage Limited, advertising “private client insurance services”. The website claimed that the company was authorised and regulated by the Financial Conduct Authority (FCA) and also listed the same mobile number which had been cited by Virdee’s victims. The FCA confirmed that Virdee was not an authorised broker.
IFED presented the overwhelming evidence to Virdee during an interview, in which he responded ‘no comment’ to all questions.
Matt Gilham, Head of Financial Crime at esure, commented:
“Protecting innocent consumers from becoming victims of insurance fraud is one part of how esure is focused on fixing insurance through its ‘Driving good’ agenda. We’d like to thank the IFED investigating officers for their hard work in collating the evidence needed to achieve this success.”
Ben Fletcher, Director of the Insurance Fraud Bureau (IFB), said:
“Bogus car insurance scams are a serious problem. Not only do they leave insurance consumers out of pocket and driving without insurance, but they also enable those who otherwise would be illegal to drive to believe they have taken out a legitimate policy and start using public roads. The IFB is working extensively with the insurance industry and the police to crackdown on ‘Ghost Broker’ scams and we're pleased to have played a part in helping City of London Police’s Insurance Fraud Enforcement Department in uncovering Virdee’s fraudulent activity. Unfortunately, fake car insurance sales continue to be prevalent - especially online, so I encourage anyone looking for a car insurance deal to avoid anything that looks suspicious and to carry out essential checks so they can know they are making a purchase through a trusted provider.”