CBI Court Sentences 5 including Divisional Manager of United Insurance in Brokerage Payment Fraud Case, Slaps Rs5.91 Crore Penalty
Moneylife Digital Team 26 February 2025
A special central bureau of investigation (CBI) court has sentenced five individuals, including a former divisional manager (DM) of United India Insurance Company Ltd (UIICL) and two directors of two insurance brokers, to five years of rigorous imprisonment in connection with a fraudulent insurance brokerage payment case. The court also imposed a total fine of Rs5.91 crore, with Rs5.52 crore levied on the two implicated private companies.
 
The convicted individuals include: Madhusudan B Patel, the then DM of United India Insurance's Ahmedabad office, Pankaj Gupta, managing director (MD) of Ivory Insurance Broker Pvt Ltd, and Inderjot Singh, director of Safeway Insurance Broker Pvt Ltd. E 
 
The special judge of CBI Court in Ahmedabad found them guilty of orchestrating an illicit insurance brokerage scheme that caused financial losses to the government exchequer while benefiting private entities.
 
The case, registered by the CBI on 6 February 2012, accused Mr Patel and the two private brokers of issuing fraudulent insurance policies which resulted in wrongful financial gains. Investigations revealed that between March 2007 and November 2010, Mr Patel, in his capacity as DM at UIICL's Ahmedabad office, underwrote multiple group janta personal accident policies as a co-insurance business for the directorate of insurance, government insurance fund (GIF) of the Gujarat government.
 
Despite GIF directly placing these policies with UIICL, Mr Patel unlawfully registered them under the broker codes of Ivory Insurance Brokers and Safeway Insurance Brokers using his own credentials. The brokerages, which lacked the necessary authorisation, illicitly received a brokerage payment of Rs2.69 crore in violation of applicable regulations, causing significant financial loss to UIICL.
 
CBI filed a charge-sheet on 7 December 2012 against Mr Patel and other accused individuals. During the trial, 20 prosecution witnesses were examined, and 61 documents were submitted as evidence. After evaluating the testimonies and records, the court found the accused guilty and handed down the prison sentences along with monetary penalties.
 
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