Fake performance bonds

Jasons Lim Hua Tong, a former insurance agent, who is alleged to have run Love Foundation while a bankrupt, was jailed 8 months for misleading a client,Dynasty Industrial and Construction , into thinking that he had obtained a performance bond for it. He was jailed for 8 months for the offence. He had faxed a quotation to his client showing that the performance bond would be issued by Mayban Assurance when this was not true. He took $7,000+ for the bond fee and another $2,000+ for its renewal. However, he argued in court that the money that he took was still available to repay the client. However, the court took into account that he abused the client's trust and took steps to fabricate documents.

Performance bonds are issued usually by banks, insurance or finance companies. They are contain promises to pay, usually on demand. These bonds allow the named party on the bond (the beneficiary) to obtain cash more or less immediately. The function of such bonds is to allow the beneficiary to obtain compensation for contract breaches without having to spend time and money suing in court. These type of bonds are used in large scale projects such as construction jobs or major information technology contracts. Often, the bond amount is for 10% of the contract sum.

It should be noted that Lim deceived not only his client but also the customer of the client who required the bond for the latter's protection.