A corruption case brought by the US Justice Department has been resolved with fines and a three-year deferred prosecution agreement for both reinsurance broking firms involved.
Reinsurance brokers Tysers and H.W. Wood have entered into a three-year deferred prosecution agreement (DPA) to resolve violations of the Foreign Corrupt Practices Act (FCPA) arising from a scheme to bribe Ecuadorian government officials.
Tysers will pay a $36m criminal penalty and administrative forfeiture of approximately $10.5m, in addition to the DPA agreement.
H.W. Wood agreed to a criminal penalty is $22.5m and approximately $2.3m additional revenue forfeitable to the US government.
However, due to the firm’s financial condition and resulting inability to pay the penalty or forfeiture, these were scaled down to $508,000 and zero, respectively.
Between 2013 and 2017, Tysers, through its acquired Integro Insurance Brokers business, and H.W. Wood, through employees and third-party agents, agreed to pay bribes reaching approximately $2.8m.
The bribes were to the then-chairman of two Ecuadorian state-owned insurance companies, Seguros Sucre and Seguros Rocafuerte, and three other Ecuadorian officials, according to court documents.
The corrupt payments were to secure improper advantages in order to obtain and retain reinsurance business with the state-owned insurance companies.
The bribes were paid to accounts held in Florida and elsewhere and effectuated through, among other things, emails sent from and meetings held in Florida.
“Tysers and H.W. Wood have admitted to engaging in a scheme to bribe multiple Ecuadorian government officials to earn tens of millions of dollars in illicit profits for themselves and their co-conspirators,” said acting assistant attorney general Nicole Argentieri of the US Justice Department’s criminal division.
Luis Quesada, assistant director of FBI’s criminal investigative division, added: “Today’s resolution shows the FBI will seek justice for violations of the FCPA to keep marketplaces and governments free from corruption worldwide.”
Both broking firms received credit for cooperation with the US authorities’ investigation and engaging in timely remedial measures.
The Justice Department’s Office of International Affairs and authorities in the UK, Panama, Ecuador, and Switzerland provided assistance on the case.
The department has, to date, charged eight individuals in related matters:
- Juan Ribas Domenech, the former chairman of Seguros Sucre and Seguros Rocafuerte, pleaded guilty in the Southern District of Florida on Sept. 16, 2020, to money laundering conspiracy for his role in this and another scheme.
- Fernando Martinez Gomez, a financial advisor, pleaded guilty in the Eastern District of New York on March 24, 2022, to two counts, including conspiracy to commit money laundering for on his role in this and another scheme.
- Esteban Merlo Hidalgo, a co-conspirator and agent of Tysers and H.W. Wood, pleaded guilty in the Southern District of Florida on March 28 to four counts of engaging in transactions in criminally derived property obtained through his participation in this scheme.
- A federal grand jury in the Southern District of Florida returned a seven-count indictment against two other defendants, Cristian Patricio Pintado Garcia and Luis Lenin Maldonado Matute, both of whom remain fugitives, on July 14, 2022, for their alleged roles in this scheme.
- Related to this investigation, on March 18, 2022, the department issued an FCPA Corporate Enforcement Policy declination to another U.K.-based reinsurance broker, Jardine Lloyd Thompson Group Holdings Ltd. (JLT), relating to bribes paid through a Florida-based intermediary to Ecuadorian government officials to obtain and retain contracts with Seguros Sucre. In connection with the FCPA Corporate Enforcement Policy declination, JLT disgorged approximately $29 million.
- Separately, the former CEO of JLT’s Colombian subsidiary, Felipe Moncaleano Botero, and two intermediaries, Jose Vicente Gomez Aviles and Roberto Heinert, each pleaded guilty in the Southern District of Florida to one count of money laundering conspiracy, on, respectively, Aug. 4, 2020, June 11, 2020, and Oct. 2, 2020.