DOJ Settles with Two U.K. Reinsurance Brokers Over Ecuador Bribes

The Justice Department has settled with two U.K.-based reinsurance brokers that admitted to participating in a scheme to bribe Ecuadorean government officials.

Source: WSJ | Published on November 21, 2023

DOJ and Arthur J. Gallagher case

The Justice Department has settled with two U.K.-based reinsurance brokers that admitted to participating in a scheme to bribe Ecuadorean government officials.

Tysers Insurance Brokers and H.W. Wood have agreed to enter into three-year deferred prosecution agreements filed in the Southern District of Florida.

The Justice Department said payments to the officials were violations of the U.S.’s Foreign Corrupt Practices Act, which forbids companies and their employees from bribing foreign public officials to gain a business advantage.

Prosecutors said that between 2013 and 2017, Integro Insurance Brokers, which was acquired by Tysers in 2018, and H.W. Wood agreed to pay bribes totaling around $2.8 million to Juan Ribas Domenech, then-chairman of two state-owned Ecuadorean insurance companies, Seguros Sucre and Seguros Rocafuerte, as well as to three Ecuadorean officials to help secure the companies’ reinsurance business.

The bribes, paid by an unnamed intermediary, went to accounts in Florida and elsewhere. The payments were arranged via emails originating in Florida, as well as in meetings held there.

Tysers said it was satisfied to have resolved the matter, adding that it has fully cooperated with the Justice Department and “has spent considerable time and effort…to ensure an effective and best-in-class compliance program is both implemented and maintained.”

H.W. Wood said it was pleased with the resolution, adding that the Justice Department acknowledged it had taken timely remedial measures and improved its compliance program and internal controls.

“The defendants engaged in a multimillion-dollar bribery scheme to influence Ecuadorean government officials into doing business with their companies,” said Luis Quesada, an assistant director in the Federal Bureau of Investigation’s criminal investigative division.

Tysers will pay a $36 million criminal penalty and a $10.5 million administrative forfeiture in the settlement. Tysers received credit for its cooperation with the department’s investigation, which included providing relevant documents, including from outside the U.S., to the government. The Justice Department added that Tysers enhanced its compliance program.

The Justice Department also gave H.W. Wood credit for its cooperation and noted its remedial efforts, including improvements to its compliance program. The appropriate penalty would have been $22.5 million, plus a $2.3 million forfeiture, according to sentencing guidelines. But because of the company’s financial situation, only a $508,000 criminal penalty was imposed.

So far, the Justice Department has charged eight people in related cases involving Ecuador, among them, Ribas Domenech, the former insurance chairman. In 2021, he was sentenced in Florida to 51 months in prison after pleading guilty to one count of conspiracy to commit money-laundering.

In March 2022, the Justice Department also declined to prosecute an insurance broker now owned by Marsh & McLennan over its use of an intermediary to obtain contracts with Seguros Sucre.