SHANGHAI: The trial of an insurance fraudster accused of cheating 175 people out of more than 14 million yuan (US$1.75 million) opened yesterday at Shanghai No 2 Intermediate People's Court.

Yao Yiming, a former manager at Taikang Life Insurance Co Ltd, one of China's top insurance firms, is alleged to have swindled the money out of agents who he told would receive substantial commission fees, and clients who were promised high short-term returns. In fact they were only part insured under cheap packages.

Yao told the court that he launched the fraud to take revenge on his former employer, and make money.

"The company promised a 17 per cent commission to agents in 2004, but then changed the amount," he said.

Yao devised the fraud in 2004, to retrieve the 17 per cent commission he had been promised, he said.

He asked agents to sell one-year terms of Taikang insurance, with 4 per cent return, and promised them 10 per cent commission.

He was fired from Taikang that year but told the agents he was still working for the company, opening an account under the name "Taikang" with a faked identity card, and asking them to transfer all the money to it.

The account filled with more than 14 million yuan (US$1.75 million), but Yao only purchased cheap insurance packages for some of the victims.

Yao used part of the money to pay the commission he had promised the agents and also organized trips for them.

The prosecutor said Yao spent around 6 million yuan (US$750,000) on himself, buying property, a car and paying for his wedding.

Yao said he would like to compensate the victims by selling his property, but the 175 victims will still suffer huge losses if they fail to claim money from the insurer.

No verdict was reached yesterday, but if Yao, 31, is convicted he could face 10 years to life in prison.

Beijing housing fraud

Meanwhile in Beijing, the city's largest ever housing reserve fraud lawsuit is being considered by judges at Dongcheng District People's Court.

Three people are alleged to have faked the authorization papers of real estate agents and application information from 55 other people to swindle about 20 million yuan (US$2.5 million) from the Dongcheng, Changyang and Fangzhuang subsidiaries of Beijing Housing Reserve Management Centre between December 2003 and December 2004.

No verdict has yet been reached, according to sources with the court.