NY Prosecutors Reported Ready to Drop Insurance Bid-Rigging Charges

Business Insurance, quoting an unnamed source, reported that prosecutors will ask New York County Supreme Court Judge James Yates at a Wednesday sentencing hearing to throw out the charges against the individuals, who in 2004 and 2005 entered their pleas to allegations they helped broker Marsh Inc. rig bids on client insurance placements.  Prosecutors are expected to cite the “interest of justice” in asking the court to allow the individuals to withdraw their pleas, effectively dismissing the cases, the Business Insurance source said.

The charges were originally levied by former New York Attorney General Eliot Spitzer, who had secured 21 guilty pleas as part of his probe into contingent commission practices in the insurance industry. Eight other executives were indicted in 2005 and later faced trial. (see Ex-Marsh Execs Indicted in Insurance Bid Rigging).

Business Insurance said it’s unclear how many of the individuals involved will have their charges dismissed entirely since some may have their felony charges reduced to misdemeanors and would likely be sentenced to probation.

According to the media report, in November, Yates dismissed criminal charges against three other individuals: former Marsh Senior Vice Presidents Thomas T. Green Jr. and William L. McBurnie, and Geri Mandel, former senior vice president at Zurich American Insurance Co.

The individuals include former executives at Marsh, Zurich American, ACE USA, AIG’s American Home Assurance Co., and others.