Two U.K.-based reinsurance brokers have agreed to resolve investigations by the Justice Department into violations of the Foreign Corrupt Practices Act (FCPA) arising from a corrupt scheme to pay bribes to Ecuadorian government officials.
Tysers and H.W. Wood each entered into a three-year deferred prosecution agreement (DPA) with the department in connection with a criminal information filed in the Southern District of Florida charging both companies with conspiracy to violate the anti-bribery provisions of the FCPA.
“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 M. Argentieri of the Justice Department’s Criminal Division. “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.”
According to court documents, between 2013 and 2017, Tysers (known and doing business during the relevant period as Integro Insurance Brokers Limited) and H.W. Wood, through their employees and third-party agents, 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.
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. In furtherance of the scheme, Tysers paid approximately $20.3 million in commissions and H.W. Wood paid approximately $7.9 million in commissions and premium payments to the intermediary company that paid the bribes. Tysers retained commissions of approximately $10.5 million and H.W. Wood retained commissions of approximately $2.3 million.
“Not only have Tysers and H.W. Wood broken any trust held in them by their clients and the market, they have eroded the process of fair and open competition when they paid bribes to foreign officials in exchange for securing lucrative contracts, and kickback for themselves,” said Chief Jim Lee of IRS Criminal Investigation (IRS-CI). “We will continue to work with our partners to investigate FCPA violations to ensure honest corporations that playing by the rules pays better in the end.”
Pursuant to the DPAs, Tysers and H.W. Wood have each agreed to continue to cooperate with the department in any ongoing or future criminal investigations relating to this conduct. In addition, Tysers and H.W. Wood have each agreed to continue to enhance their compliance programs and provide reports to the department regarding remediation and the implementation of compliance measures for the three-year term of the DPAs.
Pursuant to its DPA, Tysers will pay a $36 million criminal penalty and administrative forfeiture of approximately $10.5 million. The department reached this resolution with Tysers based on a number of factors, including, among others, the nature and seriousness of the offense. Tysers received credit for its cooperation with the department’s investigation, which included (i) meeting the government’s requests promptly; (ii) making foreign-based employees available for interviews; (iii) collecting and producing voluminous relevant documents to the government, including documents located outside the United States; (iv) making several detailed factual presentations to the government and conducting and producing financial analyses of voluminous transactions; and (v) timely accepting responsibility and reaching a prompt resolution.
Tysers engaged in timely remedial measures, which included, among other things, (i) placing employees involved in the misconduct on paid administrative leave; (ii) terminating all business and affiliations with the intermediary company involved in the misconduct; and (iii) comprehensively reviewing and enhancing its compliance program, including engaging additional resources with appropriate expertise to assist in evaluating and strengthening its compliance program, making enhancements to the governance and oversight of its compliance program, adding new compliance resources and personnel, updating and enhancing its antibribery and anticorruption policies, enhancing procedures related to onboarding and making payments to third-parties, and enhancing training programs. In light of these considerations, Tysers’ criminal penalty calculated under the U.S. Sentencing Guidelines reflects a 25% reduction off the bottom of the applicable guidelines fine range.
Pursuant to its DPA, H.W. Wood agreed, based on the application of the U.S. Sentencing Guidelines, that the appropriate criminal penalty is $22.5 million and approximately $2.3 million is forfeitable to the United States. However, due to H.W. Wood’s financial condition and demonstrated inability to pay the penalty calculated under the U.S. Sentencing Guidelines, H.W. Wood and the department agreed, consistent with the department’s inability to pay guidance, that the appropriate criminal penalty is $508,000 and that H.W. Wood is unable to pay the forfeiture amount. The department reached this resolution with H.W. Wood based on a number of factors, including, among others, the nature and seriousness of the offense. H.W. Wood received credit for its cooperation with the department’s investigation, which included (i) meeting the government’s requests promptly; (ii) endeavoring to make foreign-based employees available for interviews; (iii) collecting and producing voluminous relevant documents to the government, including documents located outside the United States; (iv) making several detailed factual presentations to the government and conducting and producing financial analyses of voluminous transactions; and (v) timely accepting responsibility and reaching a prompt resolution.
H.W. Wood engaged in timely remedial measures, which included, among other things, (i) terminating an employee involved in the misconduct; and (ii) enhancing its compliance program, including creating new compliance positions and compliance control improvements, implementing a process to ensure continuous monitoring and review of third-party relationships, and updating and enhancing its policies and procedures, as well as its compliance training and communications. In light of these considerations, H.W. Wood’s criminal penalty calculated under the U.S. Sentencing Guidelines reflects a 25% reduction off the bottom of the applicable guidelines fine range.
The department has, to date, charged eight individuals in related matters:
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