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Grant Malcolm Herbert (62) has been sentenced in the Auckland District Court today to four years and six months’ imprisonment following a Serious Fraud Office (SFO) prosecution.

Insurance broker imprisoned for fraud

Grant Malcolm Herbert (62) has been sentenced in the Auckland District Court today to four years and six months' imprisonment following a Serious Fraud Office (SFO) prosecution.

Last month, Mr Herbert was found guilty by a jury of 17 Crimes Act charges and seven Secret Commissions Act charges.

The former owner and director of the insurance brokering firm Herbert Insurance Group Limited (HIG), had received premiums from clients but failed to forward approximately $2.5 million of this to insurers, in some cases leaving the customers uninsured. He diverted this money to pay operating expenses for HIG.

He had also given an employee of an insured customer, secret commissions for referring insurance business to HIG. That company was overcharged approximately $220,000 for its insurance.

Prior to the trial, Mr Herbert had also pleaded guilty to using a forged document in relation to obtaining a credit facility in the sum of $250,000.

SFO Director, Julie Read said, "Clients who were uninsured as a result of Mr Herbert's offences were exposed to a risk of loss many times greater than the cost of the premiums which they paid in good faith.  These and the other offences of which he has been convicted represent serious breaches of trust on the part of Mr Herbert.  Mr Herbert's conduct has also had the potential to damage the community's confidence in dealing with brokers and thereby damaged the interests of all those brokers who act honestly."


For further information

Andrea Linton
Serious Fraud Office
027 705 4550

Note to editors

Background to investigation

Since March 1991 Grant Malcolm Herbert has ultimately been the sole owner and a Director of the various Herbert Insurance Group (HIG) entities.

HIG acted as an insurance intermediary for insurers and also provided an insurance brokering service to insured clients.

One of those clients was an Australian based home improvement supply company, to which Christopher David Green (66) was the former Commercial Property Manager. Mr Green's role included procuring insurance for the portfolio of premises that his employer occupied around New Zealand.

HIG was placed in receivership on 7 March 2011, following an attempt to voluntarily liquidate the company and sell assets. HIG had approximately 4,000 clients throughout New Zealand.

When HIG was placed into receivership and liquidation, there was a shortfall of $3.1 million owed to insurers. This money should have been held by HIG in an insurance premium account. Only a small percentage of the money in that account could legitimately be transferred to HIG to pay for its fees and any brokerage earned, and the insurance premium account should never have gone into deficit.

Crimes Act offences

Section 220: Theft by person in special relationship
(1) This section applies to any person who has received or is in possession of, or has control over, any property on terms or in circumstances that the person knows require the person-
(a) to account to any other person for the property, or for any proceeds arising from the property; or
(b) to deal with the property, or any proceeds arising from the property, in accordance with the requirements of any other person.

(2) Every one to whom subsection (1) applies commits theft who intentionally fails to account to the other person as so required or intentionally deals with the property, or any proceeds of the property, otherwise than in accordance with those requirements.

(3) This section applies whether or not the person was required to deliver over the identical property received or in the person's possession or control.

(4) For the purposes of subsection (1), it is a question of law whether the circumstances required any person to account or to act in accordance with any requirements.

Section 257: Using forged documents
Everyone is liable to imprisonment for a term not exceeding 10 years who, knowing a document to be forged, -
(a) uses the document to obtain any property, privilege, service, pecuniary advantage, benefit, or valuable consideration; or
(b) uses, deals with, or acts upon the document as if it were genuine; or
(c) causes any other person to use, deal with, or act upon it as if it were genuine.

Secret Commissions Act offences

Section 3: Gifts to agent without consent of principal an offence
(1) Every person is guilty of an offence who corruptly gives, or agrees or offers to give, to any agent any gift or other consideration as an inducement or reward for doing or forbearing to do, or for having done or forborne to do, any act in relation to the principal's affairs or business (whether such act is within the scope of the agent's authority or the course of his employment as agent or not), or for showing or having shown favour or disfavour to any person in relation to the principal's affairs or business.

(2) Any gift or other consideration given or offered or agreed to be given to any parent, husband, wife, civil union partner, de facto partner, or child of any agent, or to his partner, clerk, or servant, or (at the agent's request or suggestion) to any other person, shall be deemed for the purposes of this section to have been given or offered or agreed to be given to the agent.

About the SFO

The Serious Fraud Office (SFO) was established in 1990 under the Serious Fraud Office Act in response to the collapse of financial markets in New Zealand at that time.

The SFO's role is the detection, investigation and prosecution of serious or complex financial crime. The SFO's focus is on investigating and prosecuting criminal cases that will have a real effect on:

  • business and investor confidence in our financial markets and economy
  • public confidence in our justice system and public service
  • New Zealand's international business reputation.

The SFO operates three operational teams; the Evaluation and Intelligence team along with two investigative teams.

The SFO operates under two sets of investigative powers.

Part 1 of the SFO Act provides that it may act where the Director "has reason to suspect that an investigation into the affairs of any person may disclose serious or complex fraud."

Part 2 of the SFO Act provides the SFO with more extensive powers where: "...the Director has reasonable grounds to believe that an offence involving serious or complex fraud may have been committed..."

In considering whether a matter involves serious or complex fraud, the Director may, among other things, have regard to:

  • the suspected nature and consequences of the fraud and/or;
  • the suspected scale of the fraud and/or;
  • the legal, factual and evidential complexity of the matter and/or;
  • any relevant public interest considerations.

The SFO's Annual Report 2013 sets out its achievements for the past year, while the Statement of Intent 2014-2018 sets out the SFO's strategic goals and performance standards. Both are available online at