Brown & Brown Cancels Deal After Ohio Agency Exec Pleads Guilty in College Scam

Daytona Beach, Florida-based insurance broker Brown & Brown Inc. has terminated its previously announced agreement to purchase the assets of HAUSER, an insurance and investment firm headquartered in Cincinnati, Ohio.

Brown & Brown announced the termination of the agreement with Hauser on Aug. 25, just days after it was reported that one of HAUSER’s principals, Mark Hauser, agreed to enter a guilty plea in the college admissions scandal that has embroiled a number of high-profile parents, including actresses Felicity Huffman and Lori Laughlin, and Laughlin’s husband, fashion designer Mossimo Giannulli.

The Associated Press reported on Aug. 21, that Mark Hauser, who is based in California, had agreed to plead guilty in a scheme in which he paid $40,000 to rig his daughter’s ACT exam.

The U.S. Attorney’s Office for the District of Massachusetts, which is prosecuting the admissions scandal cases, said Hauser would plead guilty to “one count of conspiracy to commit mail fraud and honest services mail fraud.” The plea hearing has not been scheduled yet, but the U.S. Attorney’s announcement stated that under the plea agreement, it would recommend “a sentence of six months in prison, one year of supervised release, a fine of $40,000 and restitution.”

Brown & Brown’s deal with HAUSER was expected to close in September. Terms of the acquisition had not been disclosed.

HAUSER specializes in insurance products and services for private equity groups and their portfolio companies. On its website, HAUSER describes the firm as “a national risk advisory firm and insurance & employee benefits broker with a proven track record of delivering results to Private Equity clients.”

In its early August announcement regarding the proposed HAUSER transaction, Brown & Brown noted that the agency, founded 50 years ago by the Hauser family, is under the leadership of Mark Hauser and James Stines. Led by James Stines, under the proposed agreement HAUSER would continue to operate from its headquarters in Cincinnati, Brown & Brown reported.

Source: Brown & Brown, Associated Press, U.S. Attorney’s Office for the District of Massachusetts