After close to a year of civil litigation and plea bargain deals, New York Attorney General Eliot Spitzer has announced the indictment of 8 insurance brokers on charges of bid-rigging and defrauding clients.[@@]
The 37-count indictment, unveiled today in a New York state court in New York City before Judge James Yates, charges the 8 former executives from the insurance brokerage firm Marsh, a subsidiary of Marsh & McLennan Companies Inc., New York, with grand larceny, scheming to defraud, and restraint of trade and competition.
Under the felony charges, of grand larceny, the executives could face a maximum sentence of 15 to 25-years in prison.
Charged in the indictment were William Gilman, executive marketing director and managing director; Joseph Peiser, head of global broking excess casualty and managing director; Edward J. McNenney, global placement director and managing director; Greg J. Doherty, ACE local broking coordinator team leader and senior vice president; Thomas T. Green Jr., senior vice president; Kathleen M. Drake, local broking coordinator team leader and managing director; William L. McBurnie, coverage and carrier specialist and senior vice president; and Edward J. Keane Jr., assistant vice president.
All of the individuals indicted have pleaded not guilty.
Gilman was released on $100,000 bail. Peiser and McNenney were released on $75,000 bail; Doherty was released on $50,000 bail; Green, Drake and McBurnie were released on $35,000 bail. Keane was released on his own recognizance.
According to a Marsh & McLennan spokesman, the 8 executives have left within the last 11 months.
In a statement, Marsh & McLennan President Michael Cherkasky emphasizes that the new charges do not involve the firm and that his company reached an agreement with Spitzer earlier this year.
“This indictment is about the past,” Cherkasky says. “MMC today is focused on the future and is committed to excellence and the highest standards of professionalism and service.”
The indictments against the 8 former Marsh executives stem from Spitzer’s ongoing investigation of the insurance industry. The investigation, started more than a year ago, produced a suit against Marsh & McLennan that eventually led to more than $1 billion in settlement payments, the ouster of Marsh & McLennan’s chief executive, and agreements to abolish contingent commissions by Aon Corp., Willis Group Ltd., and Arthur J. Gallagher & Company as well as by Marsh & McLennan.