Spitzer Insurance Bid-Rigging Probe Prompts Three More Guilty Pleas

February 15, 2005 (PLANSPONSOR.com) - New York Attorney General Eliot Spitzer's insurance industry bid-rigging probe has generated three more guilty pleas from industry executives in connection with charges involving broker Marsh.

A news release on Spitzer’s Web site said those entering the pleas included a senior Marsh executive and two AIG employees. All three defendants admitted to participating in a scheme that allowed Marsh, the nation’s largest insurance broker, to protect incumbent insurance carriers when their business was up for renewal, according to Spitzer. The latest pleas bring to nine the number of executives pleading guilty from four different companies in the course of the Spitzer investigation (See Spitzer Takes On Contingent Commissions ).

As part of his plea today, Joshua Bewlay, the managing director of Marsh’s excess casualty unit described an official policy dictating that clients who asked about the company’s commission revenue would be given a “significantly understated figure.” Brawley pleaded to a felony count of a scheme to defraud, punishable by up to four years in prison, according to news reports

Also involved in the latest court developments, according to the news reports and Spitzer, were:

  • John Mohs, a manager in an excess-casualty-insurance underwriting unit at American International Group Inc. dedicated to working with Marsh, pleaded guilty to scheme-to-defraud in the first degree, punishable by up to four years in jail. He will cooperate and testify in future cases, authorities said.
  • Carlos Coello, a former AIG underwriter, pleaded guilty to a misdemeanor charge of scheme to defraud, with a potential sentence of up to one year in jail. He was an AIG underwriter for two years who admitted to submitting falsified bids at the direction of Marsh and AIG employees. He also will cooperate with the investigation and will be available to testify in future cases.

Previously, two executives at AIG, two from Zurich American, one from Marsh and one from ACE pled guilty to criminal charges.

«