Insurance broker Arthur J. Gallagher is under investigation by the Department of Justice (DOJ) related to its business in Ecuador, the company told the Securities and Exchange Commission on Nov. 2.
The Foreign Corrupt Practices Act (FCPA) unit of the DOJ delivered a subpoena to Gallagher during the second quarter of 2022, “seeking information related to our insurance business with public entities in Ecuador,” the company said in its financial Form 10-Q for the period that ended Sept. 30.
The company declined to comment about the subpoena, a spokesperson said in an email. Gallagher, which brings in more than $6 billion in annual revenue, has 850 offices worldwide, including one in Guayaquil, Ecuador.
The FCPA unit’s tap probe into Gallagher is just the latest development in a yearslong DOJ investigation into bribery and corruption involving U.S. companies operating in Ecuador and elsewhere in the region.
In July, a federal grand jury in the Southern District of Florida indicted three men for bribery and money laundering related to state-owned insurance companies in Ecuador. The men were involved in a scheme to bribe officials of the companies, Sucre S.A. and Seguros Rocafuerte S.A., to gain more business for themselves, the DOJ charged. The men laundered the funds through bank accounts in Florida, according to the DOJ.
In March, the former comptroller general of Ecuador, Carlos Ramon Polit Faggioni, appeared before a Florida judge concerning allegations he accepted a bribe in 2015 from an Ecuadorian businessman. Polit allegedly received the bribe in exchange for helping the man’s company win contracts from one of the state-owned insurance companies.
Polit allegedly laundered at least some of the bribe money in Florida by purchasing restaurants and other businesses and shielded other funds in rogue companies created in Florida for that purpose, the DOJ alleged.
Polit also allegedly received more than $10 million in bribes between 2010 and 2016 from a Brazil construction conglomerate, Odebrecht S.A. Odebrecht pleaded guilty in December 2016 in U.S. District Court for the Eastern District of New York to paying almost $800 million in bribes to public officials in Ecuador and 11 other countries.
By October 2019, at least 10 Ecuadorian government officials, U.S. financial advisors, and others had pleaded guilty in U.S. federal courts to bribery and money laundering charges involving Ecuador’s state-owned oil company, PetroEcuador.
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