A former senior executive at Marsh & McLennan Cos. Inc. and two executives from American International Group Inc. pleaded guilty yesterday to fraud charges stemming from New York Attorney-General Eliot Spitzer's sweeping investigation of fraud in the insurance industry.
The pleas were entered in Manhattan criminal court. Mr. Spitzer's office said it has obtained nine guilty pleas from executives at AIG, Marsh, ACE Ltd. and Zurich Financial Services AG since launching its industry probe last year.
AIG is the world's largest insurer by market value, and Marsh is the world's largest insurance broker. Both are based in New York.
The highest-ranking executive pleading yesterday was Joshua Bewlay, who had been a Marsh senior vice-president and managing director in its excess casualty group.
Mr. Bewlay pleaded guilty to one count of scheming to defraud. As part of his plea, Mr. Bewlay "described an official protocol whereby Marsh clients were given a significantly understated figure when asked about the amount of revenue Marsh derived from placement service agreements," Mr. Spitzer's office said.
John Mohs, a former manager at AIG's American Home Assurance Co. unit, pleaded guilty to the same charge.
The third executive, AIG underwriter Carlos Coello, pleaded guilty to scheming to defraud in the second degree, a misdemeanour.
Mr. Bewlay and Mr. Mohs each face up to four years in prison, and Mr. Coello up to one year. All three are co-operating with the investigation, Mr. Spitzer's office said.
Last month, Marsh agreed to pay $850-million (U.S.) in restitution to settle charges that it rigged bids and fixed prices in insurance markets.