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Ex-Sesame adviser jailed over fraudulent insurance claims

A financial adviser who turned to insurance fraud after he was hit by the effects of the 2008 banking crisis has been jailed for two and a half years.

Mark Watson obtained thousands of pounds in commission by submitting fraudulent policy applications in the names of fictitious clients.

Maidstone crown court heard that Watson, 48, of West Malling, Kent, admitted three sample fraud charges involving Scottish Provident, Bright Grey and Bupa Health Insurance.

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Rejecting a plea by Watson’s counsel for a suspended sentence, judge Charles Macdonald QC said: “Each of these offences was fraudulent from the outset. It is suggested it was not sophisticated. I suggest it was and planned. It was carried out for a significant time and there were multiple frauds.”

He told Watson: “You have lost your job, your reputation and marriage and this plainly is a case which calls for immediate custody.”

The court was told that Watson went into business with Colin Holmes, his former brother-in-law, in June 2003. They set up The Vita Partnership in Sevenoaks.

Martin Yale, prosecuting, said the pair had separate clients, their own incomes and a mortgage adviser worked with them.

He said that the firm was part of Sesame network, which was responsible for checking compliance with regulations. Part of Vita’s work included submitting insurance applications to companies on behalf of clients.

Commission was paid by the insurance companies to Sesame who took a cut and the remainder would be paid to Vita. Watson drew the commission that related to individual clients.

However it emerged that Watson had been submitting fraudulent policy applications. By that time, Mr Holmes had resigned from the partnership, the court heard.

The court was told that Watson would pay for a policy by direct debit for the first few months enabling him to receive the commission. He would then cancel the direct debit or let the policy lapse.

When the policies lapsed, the insurance companies began to claw back their commission from Sesame, which sought to recover it from Vita.

Mr Yale said Sesame had to repay a total of £358,622 in respect of more than 140 claw-backs as a result of Watson’s failed policies. Watson accepted that £355,421 of that sum related to fraudulent transactions.

The judge said there had been a breach of trust by him in respect of Mr Holmes. Mr Holmes has not been charged.