A fraudulent Melbourne insurance provider has escaped jail for operating a financial services company without a licence and abetting dishonest conduct.

Anthony John Scott received a two-year suspended sentence yesterday at the County Court of Victoria following an investigation by the Australian Securities and Investments Commission (ASIC).

Mr Scott's company Homesafe had issued builders' warranty bonds to 792 projects throughout Victoria that provided no protection to homeowners between June 2003 and March 2004. The projects had a potential value of more than $100 million.

Homesafe was placed into liquidation in August 2004 after ASIC applied to the Supreme Court to have it wound up.