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Member, Beacon International Group, Ltd.
SYDNEY, AustraliaAnthony Boulden, a former financial controller at FAI General Insurance Co. Ltd., has been sentenced to a term in prison for being privy to the fraudulent alteration of a ledger that had the effect of reducing claims estimates against the company.
Mr. Boulden was sentenced to a 12-month term, to be served by periodic detention.
FAI was a unit of the HIH Insurance Ltd., which became Australia's largest corporate failure when it collapsed in 2001. The financial condition of FAI Insurance Ltd. was determined to have played a role in HIH's demise.
Several former employees of HIH have been sentenced for their role in the insurer's downfall. Among them are Rodney Adler, former head of FAI Insurance and a director of HIH Insurance Ltd., and Ray Williams, former chief executive officer of HIH, both of whom were sentenced to four-and-a-half-year prison terms.
Mr. Boulden pleaded guilty to one count of being privy to the fraudulent alteration of a ledger that reduced claims estimates by about $5.5 million Australian ($3.6 million).
The falsified estimates were reflected in FAI Insurance's financial results for the half-year ended Dec. 31, 1997, according to the Australian Securities & Investments Commission, which brought the charges against Mr. Boulden.
For the period, FAI reported a pretax operating profit of $3.2 million Australian ($2.1 million). But without the improper claims estimate reductions, it would have posted a loss of about $2.3 million Australian ($1.5 million), ASIC noted.