A financial adviser accused of fraudulently applying for life and health insurance for non-existent people has had his licence cancelled.

New Zealand’s Financial Markets Authority cancelled the financial advice provider licence of Les Vela Limited, trading as Wise Insurance, and de-registered sole director Le Zhou – also known as Eric – for five years.

After being notified by an insurer, the regulator investigated 15 policy applications allegedly submitted by Mr Zhou for 27 non-existent individuals – a practice called “tombstoning”. The applications resulted in commissions of almost $NZ261,000 ($235,000).

“We are seeing an increase in fraudulent activity by financial advisers, particularly in relation to insurances and mortgages. While these instances are the exception rather than the norm, the severity of the conduct makes this a priority,” FMA director Louise Unger said.

“It is important for financial advisers to act ethically to maintain trust and uphold the integrity of the sector, which Mr Zhou has failed to do.”

Waitemata Financial Crime Team detective Ben Bergin says police have noted an increase in people using their employment or access to systems to offend.

“Abusing these systems for personal gain is a criminal offence and police are continuing to hold offenders to account,” he said.