FCPA Enforcement Actions Against Insurance Companies
Last week’s $4.7 million enforcement action against Liberty Mutual regarding an alleged bribery scheme in India was just the latest FCPA enforcement action against an insurance company.
This post highlights the six other enforcement actions.
Tysers and H.W. Wood
In 2023 the DOJ brought related FCPA enforcement actions against United Kingdom reinsurance brokers Tysers and H.W. Wood concerning an alleged bribery scheme in Ecuador.
The net settlement amount in the Tysers matter was $46.5 million and the net settlement amount in the H.W. Wood matter was $508,000.
Liberty Mutual Resolves $4.7 Million Enforcement Action
The DOJ recently released this so-called declination with disgorgement letter regarding Liberty Mutual Insurance.
The letter begins:
“Consistent with the Criminal Division’s Corporate Enforcement and Voluntary Self-Disclosure Policy, the Department of Justice, Criminal Division, Fraud Section and the United States Attorney’s Office for the District of Massachusetts (collectively, the “Government”) have declined prosecution of your client, Liberty Mutual Insurance Company (“Liberty Mutual” or the “Company”), a global insurance company with its principal place of business in the United States, for violations of the Foreign Corrupt Practices Act (“FCPA”), 15 U.S.C. § 78dd-2. We have reached this conclusion despite evidence of bribery committed by certain employees of the Company’s subsidiary in India who were acting as agents of the Company.”
Individual Pleads Guilty In Connection With Prior FCPA Enforcement Actions Involving Ecuador
This prior post discussed the many FCPA (and related) enforcement actions concerning Ecuador’s Seguros Sucre S.A. (“Seguros Sucre”), an alleged state-owned insurance company and “instrumentality” of the Ecuadorian government.
Among the enforcement actions were criminal charges announced by the DOJ in 2022 against Esteban Eduardo Merlo Hidalgo, Christian Patricio Pintado Garcia, and Luis Lenin Maldonado Matute.
Merlo was described as an Ecuadorian and U.S. dual citizen residing in Miami who operated and controlled Intermediary Company (a term that collectively refers to two companies that were registered in Panama and Ecuador, operated in Miami, Florida, and acted as intermediaries for reinsurance companies). Merlo was described as a “domestic concern” in FCPA speak.
U.K. Announces Enforcement Action Involving Insurance Sector In Ecuador
As detailed below, in the past approximate five years, there have been several FCPA enforcement actions against companies and individuals involved in the insurance sector in Ecuador.
Tysers Insurance Brokers Limited and H.W. Wood Limited (2023)
As highlighted in this prior post, the DOJ alleged that “Tysers and H.W. Wood were engaged in a conspiracy the purpose of which was for the co-conspirators to enrich themselves by, among other things, corruptly offering bribes to, and for the benefit of Juan Ribas Domenech, Foreign Official 1, Foreign Official 2, and Foreign Official 3, each of whom was a foreign official in Ecuador, within the meaning of the FCPA … to influence the foreign officials and to secure improper advantages in order to obtain or retain reinsurance business from Seguros Sucre and Rocafuerte” (both alleged to be state-owned insurance companies).
Yet Additional FCPA Enforcement Actions Concerning Ecuador’s Seguros Sucre
From time to time, there are certain Foreign Corrupt Practices Act enforcement actions in which the core allegations just seem to “keep on giving” and spawn several related enforcement actions.
A prime example were the many FCPA (and related) enforcement actions involving Haiti Teleco from approximately ten years ago (see here) and the many recent enforcement actions concerning Venezuela’s PDVSA.
Enforcement actions concerning Ecuador’s Seguros Sucre S.A. (“Seguros Sucre”), an alleged state-owned insurance company and “instrumentality” of the Ecuadorian government, are beginning to add up as well. In 2022 U.K.-based reinsurance broker, Jardine Lloyd Thompson Group Holdings Ltd. (JLT) resolved a $29 million FCPA enforcement action (see here for the prior post) and eight individuals have been criminally charged (and several have pleaded guilty) in connection with the same underlying conduct.
The latest enforcement action was yesterday’s announcement by the DOJ that Tysers Insurance Brokers Limited (Tysers – formerly known and doing business during the relevant time period as Integro Insurance Brokers Limited an international reinsurance broker based in the United Kingdom) and H.W. Wood Limited (an international reinsurance broker based in the United Kingdom) resolved a Foreign Corrupt Practices Act enforcement action for “participation in a corrupt scheme to pay bribes to Ecuadorian government officials.”
The net settlement amount in the Tysers enforcement action is $46.5 million and the net settlement amount in the H.W. Wood enforcement action is $508,000 based on inability to pay.