A federal task force investigating Lloyd’s of London have begun interviews of witnesses in California regarding a $400,000 payment made to the state by Lloyd’s in 1999, according to a Los Angeles Times article.
The U.S. Justice Department’s criminal investigation of Lloyd’s has been ongoing since1996. A previous L.A. Times article reported that the Lloyd’s payment had been covered up by ex-California Insurance Commissioner Chuck Quackenbush’s staff via a false invoice that billed the payment for “educational briefing.”
The paper reported that the money had actually been used to cover legal expenses incurred by Quackenbush three years previously while working on behalf of Lloyd’s in relation to a securities fraud suit filed by the Department of Corporations.
Among those interviewed were lawyers in the California Department of Insurance’s San Francisco office and former Quackenbush aide George Grays, who recently plead guilty to participating in a $250,000 scheme involving foundation funds donated by several insurers under the scrutiny of the CDI after the Northridge earthquake.
In addition, the paper reported that a federal grand jury has subpoenaed CDI records relating to the Lloyd’s payment. Unidentified state officials told the L.A. Times that seven boxes of files had been removed from the CDI’s executive offices by federal investigators.
Joseph P. Gunset, general counsel for U.S. regulatory affairs for Lloyd’s, confirmed that the New York federal task force had requested Lloyd’s to produce its documents relating to the transaction. Gunset also stated that Lloyd’s was fully cooperating with the investigators.