Thousands of clients have been left out of pocket after an insurance broker in Midlothian fraudulently sold £10m worth of policies.
Walker's sentence was deferred for background reports
John Kirke Walker, from Penicuik, had admitted misleading staff at his 100-strong Eskbank firm by pretending firms were underwriting policies.
Tribune Risk and Insurance Services was liquidated on 10 December, 2003.
Walker's sentence was deferred on Wednesday for background reports at Edinburgh Sheriff Court.
An investigation showed he was issuing home insurance without proper cover.
Customers in the middle of claims were left out of pocket and 43,000 policy holders discovered their documents were not covered by insurers.
One man, whose house burned down in a fire, thought he was in safe hands after buying a policy with Tribune.
However, after the liquidation he learned he had no actual cover and was left £46,000 in debt to a builder who had already completed repair work.
"The biggest impact of the crime could be said to be in relation to individuals who believed they were fully insured only to discover they had no insurance in place," Fiscal Depute Loraine Hirst said.
When the company was shut down staff were immediately laid off just two weeks before Christmas.
Finance company, Can Do, which gave Tribune a commission for loans generated from its clients, lost about £2m in unpaid instalments.
The Walker family had taken £550,000 from the company between 2001 and 2003 to buy a Lexus car, make pension contributions, pay £25,000 towards a flat purchase and as wages.
Ms Hirst told Sheriff Kenneth MacIver that Walker, who has a previous conviction for fraud, had set up the company in February 1999 with his wife Evelyn, 57 and son Paul, 31.
When a retired lawyer was unimpressed by her paperwork, she cancelled her policy and contacted the Financial Services Authority.
Walker's wife and son were also accused of the same charge, but their not guilty pleas were accepted by the Crown.