Financial Markets Authority cancels Les Vela’s licence; director allegedly pockets $260K commission from made-up people

Le Zhou will reappear in the North Shore District Court in October. Photo / Sylvie Whinray

An Auckland financial adviser who allegedly received $260,937 in commission from applying for health and life insurance for non-existent people has been charged with forgery and had his licence cancelled.

Le Zhou, also known as Eric, was arrested in July and is facing three representative charges of forgery.

Zhou is the sole director and shareholder of Les Vela Ltd (trading as Wise Insurance).

The Financial Market Authority (FMA) said it was satisfied that Les Vela no longer met key requirements for a market services licence under the Financial Markets Conduct Act (FMC Act).

The FMA investigated 15 insurance policy applications submitted by Zhou on behalf of 27 individuals who did not exist, after being notified by the impacted insurer.

Louise Unger, FMA’s executive director for response and enforcement, said the practice of submitting insurance applications for people who do not exist was known as “tombstoning”.

“Behaviour like this results in the erosion of the public’s confidence in the financial advice industry.

“Under current weaker economic conditions we are seeing an increase in fraudulent activity by financial advisers, particularly in relation to insurances and mortgages.

“While these instances are the exception rather than the norm, the severity of the conduct makes this a priority for the FMA to address.”

Unger said it was important for financial advisers to act ethically to maintain trust and uphold the integrity of the sector, which Zhou had “failed to do”.

Zhou will reappear in the North Shore District Court in October.

Acting detective senior sergeant Ben Bergin, from the Waitematā Financial Crime Team, said: “Police are continuing to see an increase in people using their employment or access to systems to commit offending.

“Abusing these systems for personal gain is a criminal offence, and Police are continuing to hold offenders to account.”