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Mark Stanger

Mark Stanger

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Fraudster sentenced after faking Accident Management Company and policyholder

News And Events23/02/2021

First prosecution for Direct Line Group, as insurer and Keoghs uncover brazen fraud

UK Insurance v Shajeel Malik

A 10 day trial has resulted in a sentence of nine months suspended for 18 months and 100 hours unpaid work in the community for Shajeel Malik, a fraudster who faked a road traffic accident, policyholder and company in order to facilitate a fraudulent claim.

This was not only sophisticated, but also brazen, as Malik named his fictitious Accident Management Company Shifty Rental Solutions and called his imaginary policyholder John West, whose job was listed as food processor.

In sentencing at Southwark Crown Court, HHJ Grieve QC stated that Malik was the “controlling mind behind the company” and “had the gall to pursue the claim into County Court, even after it had attracted suspicion”.

Initial fraud defence

As HHJ Grieve QC also mentioned, this was a fraud sustained over a considerable period of time. DLG and Keoghs first defended the case as a civil matter. The claim was pursued in the name Habib, who’s Mercedes allegedly struck John West’s vehicle, causing Habib to suffer a whiplash type injury. There was also a claim for vehicle damage and credit hire.

Shajeel Malik’s fabricated company, Shifty Rental Solutions, managed and controlled the damages claims said to have been pursued by Habib.

As the claim progressed, it became clear that something was amiss.

It was discovered that the addresses for both Habib and the policyholder, John West, were false. An initial policy payment was made on a pre-paid debit card issued by an American finance company with no apparent UK presence. However, no payment was taken due to an issue with the card and no premiums were deducted from the provided bank account, which had been hijacked. Investigations also revealed that the Mercedes on the Shifty hire agreement was registered to a third party company, rather than the fake Accident Management Company.

Keoghs, instructed to defend the claim, discovered that the claimant’s proof of address was a forged telephone bill, a credit card statement provided was a fake, and the invoice for repair was in the name of a fictitious garage.

It was later uncovered that the bank account into which Shifty Rental Solutions invited payment of an initial sum of damages, in fact traced to a company called The Law Inn.

The initial claim was eventually struck out when no claimant attended trial.

Pursuing prosecution

It was clear that this was more than an opportunistic crime. While the matter had been pursued successfully through the civil courts, it was thought the level of fraud was so serious that it also ought to be pursued through the criminal courts where the case went before HHJ Grieve QC and a jury.

Malik had planned meticulously and been careful not to leave any direct evidence of his involvement with Shifty. His active participation and controlling influence was uncovered via links to the fraud by three mobile numbers. One of these was traced to a Gumtree advertisement selling a Maserati, which was shown in an accompanying photograph to be parked outside Malik’s residential address and had been insured on a DLG policy in Mailk’s father’s name but over which he had control.

Further investigation linked Malik’s Maserati to another Accident Management Company who also had the trading name of The Law Inn.

The evidence then came full circle when it was discovered that the claimant solicitor’s files contained a complaint from a handler who couldn’t get hold of anybody on Shifty Rental’s direct number. An email from Shifty suggested contacting a mobile number direct. That number was the same as the one on the Gumtree advert for the Maserati and therefore traced to Shajeel Malik.

Finally, documents for accounts in the name The Law Inn, including the one into which proceeds of the fraud had been paid, were obtained by the prosecutor, and it was established that the accounts were controlled by Shajeel Malik. 

A decision was made, given the pre-meditative nature and complexity of the fraud, to pursue a prosecution of Malik, who had spun a true web of deceit over a period of time.

Shajeel Malik was convicted following a 10 day trial and was sentenced to 9 months imprisonment, suspended for 18 months and a requirement to carry out unpaid work in the community, with the issue of compensation to be addressed at a later date.

In sentencing, HHJ Grieve QC said that Malik was…

 “…quite brazen in instructing a firm of solicitors to represent the ‘claimant’. It was only the fact that the insurance company stood its ground that led to you being obliged not to find anyone to stand up and pretend to be Habib at Oxford County Court. The fraud was sustained over a considerable period of time and you sought to support it with false documentation.”

Comment

Following the sentencing, Mark Stanger, Head of Keoghs Advocacy and Prosecution Counsel said;

“This verdict and sentence sends a direct message to those who would defraud insurance companies that their activities will not be accepted by the industry and will have serious consequences if brought before the courts. The result is a testament to all those who have handled the case in both our counter-fraud and advocacy teams, working in collaboration with Direct Line Group investigators to defeat the fraudulent civil claim, investigate its true origin and bring Shajeel Malik to justice.”

Mike Brown, Head of Counter Fraud Intelligence & Disclosure at Direct Line Group, said;

“This has been a long and complex investigation and we are delighted that the perpetrator of this fraud has been brought to justice. This is a fantastic achievement not only for Direct Line Group, but also for the insurance industry and its customers generally, as it sends a clear message to fraudsters that insurance fraud will not be tolerated.”