Insurance broker faces $30,000 penalty over further “fraudulent activity”

An Ontario ex-insurance agent is facing up to a $30,000 penalty after allegedly engaging in “fraudulent activity” after his license had been revoked.

Daniel Conrado, who worked for Arton Brokers from October 2017 to March 2020 and Aaxel Insurance Brokers from April 2020 to October 2020, has been accused of forging a pink slip and taking client money after his Registered Office of Insurance Brokers (RIBO) license was taken away in 2021.

Conrado was originally fined $10,000 in 2021 and banned from reapplying for his license for 10 years, with the RIBO disciplinary panel having found that he accepted client money into his personal bank account, had changed the insurer without the insured’s consent, and that he had “fabricated” 365-day liability cards for people with no auto insurance.

He “was released on a recognizance of bail and the charges remain pending” as of May 2021, according to a Financial Services Regulatory Authority of Ontario (FSRA) notice of proposal to impose an administrative penalty, issued December 21, 2022.

York Region Police alerts FSRA to further “fraudulent activity”

In June 2022 the York Region Police alerted the FSRA of further alleged suspicious activity by Conrado. This included charging a $4,800 from an individual who had been refused auto coverage by his insurer.

Initially Conrado requested and was sent $1,900 to arrange insurance for the individual. A further e-transfer followed when Conrado requested another $1,900, “citing [the individual’s] high-risk status as the need for further advance premium payments”, according to the proposal notice, signed by Elissa Sinha, FSRA director, litigation and enforcement.

The payment was delivered the same day, November 11, 2021. Conrado again contacted the individual the following day and received another payment of $1,000. This is according to the FSRA document.

When the individual received a pink slip, on which the insurer listed was Echelon and the broker was BrokerLink, he became suspicious and attempted to recoup his money from Conrado before notifying the police, the notice said.

Following an FSRA investigation, Echelon and BrokerLink confirmed to the FSRA that the pink slip was “fraudulent”.

Further investigation unearthed that the bank account the individual had transferred the payments into was owned by RD Construction Services, a sole proprietorship registered to Conrado, according to the FSRA.

“The address for RD Construction Services is the same as Conrado’s Brampton address,” the FSRA said.

“Therefore, it is clear that Conrado received the $4,800 in e-transfers from [the individual].”

The FSRA made multiple attempts to contact Conrado, it said, with no response from him bar that he had hired a lawyer and that he should not be contacted again. The lawyer told the FSRA that he had not been fully retained when contacted in November 2022, the FSRA said in the notice.

“The director is satisfied that Conrado contravened section 2(1) of Ontario Regulation 347/04 by acting as an agent when he sold [the individual] a fabricated auto insurance policy without a license,” the FSRA notice said.

“Conrado offered to act in the negotiation of automobile insurance for BA and represented to BA that he had done so by providing the [individual’s] Pink Slip and collecting purported insurance premiums, which Conrado kept for himself.

“Therefore, Conrado acted as an agent while unlicensed.”

What must the FSRA consider when determining administrative penalties?

The FSRA director must consider the following criteria when deciding whether to level a penalty, according to the proposal document:

• The degree to which the contravention or failure was intentional, reckless or negligent
•  The extent of the harm or potential harm to others resulting from the contravention or failure
• The extent to which the person or entity tried to mitigate any loss or take other remedial action
• The extent to which the person or entity derived or reasonably might have expected to derive, directly or indirectly, any economic benefit from the contravention or failure
• Any other contraventions or failures to comply with a requirement established under the Act or with any other financial services legislation of Ontario or of any jurisdiction during the preceding five years by the person or entity

Alleged contraventions were “intentional” and risked public harm, says FSRA

The FSRA said the director was satisfied that Conrado’s contraventions were “intentional”, had resulted in putting the public at risk of “significant” harm, and that he had “undermined the integrity of the licensing regime”.

It further found that he had failed to attempt to take any remedial actions and had “refused to return” the individual’s money when asked to. Bank records showed that Conrado had “immediately” spent the money on personal items, the proposal notice alleged.

He was also found to have “derived a direct economic benefit” from his actions and to have contravened sections of Regulation 991 under RIBA in Ontario.

“These contraventions include not discharging his duties with integrity, not serving his clients in a conscientious, diligent and efficient manner, and failing to deposit trust funds or disburse money received appropriately,” the proposal notice said.

“These contraventions or failures to comply with other financial services legislation in Ontario occurred in 2020.”