Former Lionsgate adviser pleads guilty to tombstoning
A former authorised representative of Lionsgate Financial Group and HNW Planning has pleaded guilty to two charges of dishonest conduct arising from an investigation which found he submitted 15 applications for life insurance policies in the names of people who did not exist.
The adviser, Pavan Vyas of West Pennant Hills, pleaded guilty to two charges in the Downing Centre Local Court in Sydney which heard that he submitted the false insurance applications between June 2012 and March 2013 to earn $243,433 in commissions.
The practice is known as 'tombstoning’ and was revealed by an investigation conducted by the Australian Securities and Investments Commission (ASIC) which permanently banned Vyas in July of this year.
The court also heard that he submitted 21 other false documents to hide the false applications, including variations to the insurance applications and falsified emails from the fictitious clients.
The matter, which is being prosecuted by the Commonwealth Director of Public Prosecutions, will return to the Downing Centre Local Court on 6 September 2013. Vyas faces a maximum penalty of 10 years jail and/or a fine of $450,000 for each offence.
ASIC has also imposed conditions on the licence of Lionsgate after a surveillance of the advice business found it did not properly assess its advisers’ competence to provide financial services, nor did it take reasonable steps to ensure the advisers complied with the laws.
Lionsgate was required to appoint an independent expert to review all aspects of the licensee’s arrangements for compliance with its general licensee obligations. The expert is to report to ASIC and Lionsgate with recommendations that the group will be required to implement.
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