Two U.K.-based reinsurance brokers reached separate settlements with the U.S. Department of Justice (DOJ) addressing their participation in a wide-ranging scheme to pay bribes to Ecuadorian government officials.
Tysers Insurance Brokers and H.W. Wood each entered into a three-year deferred prosecution agreement (DPA) to resolve DOJ investigations into violations of the Foreign Corrupt Practices Act (FCPA), the agency announced Monday. Tysers agreed to pay a $36 million criminal penalty and forfeiture of approximately $10.5 million, while H.W. Wood was assessed a $22.5 million penalty and approximately $2.3 million in forfeiture.
However, H.W. Wood will only pay a $508,000 penalty and no forfeiture, based on its inability to pay, the DOJ said.
The DOJ has charged eight individuals in matters related to the Ecuadorian bribery scheme. U.K. insurance broker Jardine Lloyd Thompson Group Holdings was also found by the agency to have bribed government officials in the country, though it earned a declination in 2022 after voluntarily self-disclosing the matter and agreeing to disgorge more than $29 million in “corruptly obtained” profits.
The details: Between 2013 and 2017, employees and agents of Tysers and H.W. Wood “agreed to pay bribes totaling approximately $2.8 million to the then-chairman of two Ecuadorian state-owned insurance companies, Seguros Sucre S.A. and Seguros Rocafuerte S.A., and three other Ecuadorian officials to secure improper advantages in order to obtain and retain reinsurance business with the state-owned insurance companies,” according to the DOJ.
The bribes were paid through the accounts of a Florida-based intermediary. Tysers retained commissions of approximately $10.5 million and H.W. Wood approximately $2.3 million, the DOJ said.
The two firms admitted their roles in the scheme, said Nicole Argentieri, acting assistant attorney general in the DOJ’s Criminal Division, in the agency’s release.
“Today’s resolutions, along with the numerous related individual cases, demonstrate the department’s steadfast commitment to hold both corporate and individual wrongdoers accountable for their crimes,” she said.
Compliance considerations: Tysers and H.W. Wood each agreed to cooperate with the DOJ in any other related cases and report on enhancements to their respective compliance programs over the terms of their respective DPAs.
Both firms received cooperation credit from the DOJ for promptly meeting its requests, providing relevant documents, and timely accepting responsibility, among other factors.
Tysers placed employees involved in the misconduct on paid administrative leave and terminated all business and affiliations with the intermediary company involved. The firm enhanced its anti-bribery and anti-corruption policies and its procedures for onboarding third parties. It earned a 25 percent reduction off the bottom of the applicable guidelines fine range, the DOJ said.
H.W. Wood also earned a 25 percent reduction, which considered its terminating an employee involved in the misconduct and enhancements made to its compliance program and training.
Company response: “Tysers has cooperated fully with authorities and has spent considerable time and effort—including investing in a full compliance and control review and uplift—to ensure an effective and best-in-class compliance program is both implemented and maintained,” said the company in an emailed statement. “This action is reinforced by the DOJ press release, which highlights the material and timely remedial measures adopted by Tysers.”
H.W. Wood did not respond to a request for comment.
Tysers’ parent company, AUB Group, disclosed earlier this year the U.K. Serious Fraud Office dropped an investigation into the bribery matter. The agency was reportedly investigating a handful of other firms as well.
Insurance broker Arthur J. Gallagher disclosed last year it was being investigated by the DOJ’s FCPA Unit regarding its business in Ecuador.
- Arthur J. Gallagher
- Deferred Prosecution Agreement
- Department of Justice
- Financial Services
- Foreign Corrupt Practices Act
- H.W. Wood
- Jardine Lloyd Thompson Group Holdings
- Regulatory Enforcement
- Seguros Rocafuerte
- Seguros Sucre
- South America
- Tysers Insurance Brokers
- United Kingdom
- United States