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New York State Attorney General Eliot Spitzer secured five pleas within the past week in his continuing investigation of bid-rigging in the insurance industry.
Last Friday, Jason Monteforte, who was a broker for Marsh & McLennan Cos. Inc., pleaded guilty to attempted restraint of trade, a misdemeanor, Spitzer spokesman Brad Maione said. Monteforte was accused of working to protect bids and using fake bids to make the action appear to be competitive.
Monteforte’s attorney didn’t immediately respond to a request for comment after the plea was announced.
In January, Marsh, which is based in New York, agreed to pay $850 million in restitution to end Spitzer’s investigation into bid-rigging, price-fixing and the use of hidden incentive fees. Marsh publicly apologized for “shameful” and “unlawful” conduct.
Also last week, Spitzer secured four guilty pleas:
• Todd Murphy, a former senior vice president at Marsh, was among colleagues who “routinely arranged for and instructed insurance company personnel to submit specific quotes for insurance coverage that Marsh and other insurance company personnel knew were less favorable than those of the incumbent carriers,” according to the complaint. Murphy pleaded guilty to a scheming to defraud charge, a misdemeanor, in state Supreme Court in Manhattan, Maione said.
• Regina Hatton, a former broker in the excess casualty division of Marsh Global Broking, a Marsh subsidiary, pleaded guilty to scheming to defraud, a felony, Spitzer said. She was accused of trying to control the market and protect the insurance carrier from competition to maximize Marsh’s profits, Maione said.
• James Spiegel, a senior underwriter in the specialties excess casualty unit at Zurich American Insurance Co., pleaded guilty to scheming to defraud, a felony, for limiting competition to maximize profits for Zurich and Marsh, Maione said.
• Nicole Michaels, a broker in the excess casualty division of Marsh Global Broking, instructed underwriters to submit quotes on bids in which it was “predetermined” Marsh would win. These were called “backup,” “protective” or “fake” quotes, according to court records. She pleaded guilty to attempted restraint of trade and competition, a misdemeanor, Maione said.
In March, Chicago-based Aon Corp., the world’s No. 2 insurance brokerage, agreed to pay $190 million and adopt reforms to end the use of incentive fees, which were paid by insurance companies — over and above regular commissions — in exchange for more business.
Spitzer had secured guilty pleas to criminal charges from 10 insurance executives implicated in the insurance investigation. They include four former executives of the American International Group Inc. as well as six others from Marsh & McLennan, Zurich American Insurance Co. and ACE Ltd.
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