The Foreign Corrupt Practice Act (FCPA) is alive and well. In recent years the FCPA has been increasingly used to prosecute behavior that has nothing to do with bribery or corruption, but today’s FCPA resolution with two British Brokers is the type of good old fashioned bribery case that made the FCPA famous in the first place.
The Charges
Tysers Insurance Brokers Limited (Tysers) and H.W. Wood Limited (H.W. Wood), two prominent U.K.-based reinsurance brokers, have entered into deferred prosecution agreements (DPAs) to resolve investigations by the Justice Department into violations of the FCPA. The charges stem from their involvement in a corrupt scheme to pay bribes to Ecuadorian government officials. The resolution includes a total payment of $58.5 million, reflecting the seriousness of the offenses committed between 2013 and 2017.
Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division remarked, “Tysers and H.W. Wood have admitted to engaging in a scheme to bribe multiple Ecuadorian government officials to earn tens of millions of dollars in illicit profits for themselves and their co-conspirators.” This resolution underscores the Justice Department’s commitment to holding both corporate entities and individuals accountable for their crimes.
The Bribery Scheme
Court documents reveal that, from 2013-2017, Tysers (operating as Integro Insurance Brokers Limited) and H.W. Wood, through their employees and third-party agents, orchestrated a bribery scheme involving approximately $2.8 million in bribes. The bribes were intended for the then-chairman of two Ecuadorian state-owned insurance companies, Seguros Sucre S.A. and Seguros Rocafuerte S.A., as well as three other Ecuadorian officials. The illicit funds were funneled to accounts in Florida and elsewhere, facilitated by emails and meetings held in Florida. For those wondering why the U.S. Department of Justice is prosecuting UK based companies, the fact that the funds went through the U.S. is likely what gave the DOJ the jurisdictional foothold it needed to bring these charges.
Chief Jim Lee of IRS Criminal Investigation (IRS-CI) emphasized the severity of the charges, “Not only have Tysers and H.W. Wood broken any trust held in them by their clients and the market, they have eroded the process of fair and open competition when they paid bribes to foreign officials in exchange for securing lucrative contracts, and kickback for themselves.”
Department’s Response
Pursuant to the DPAs, both Tysers and H.W. Wood have committed to cooperating with the department in any ongoing or future criminal investigations related to this conduct. Furthermore, they are obligated to enhance their compliance programs and provide regular reports to the department regarding remediation and the implementation of compliance measures throughout the three-year term of the DPAs.
Tysers’ Penalties and Remediation
Tysers, under its DPA, is set to pay a hefty $36 million in criminal penalties and administrative forfeiture of approximately $10.5 million. The resolution considers Tysers’ cooperation with the investigation, prompt response to government requests, and extensive collection and production of relevant documents. Additionally, Tysers has taken significant remedial measures, including placing involved employees on paid administrative leave, severing ties with the intermediary company, and comprehensively reviewing and enhancing its compliance program.
H.W. Wood’s Penalties and Remediation
H.W. Wood, under its DPA, faces a criminal penalty of $508,000 and approximately $2.3 million in forfeitures. This penalty reflects a 25% reduction off the bottom of the applicable guidelines fine range, considering H.W. Wood’s cooperation with the investigation and demonstrated efforts towards remediation. The amount also takes into account Wood’s demonstrated inability to pay a larger penalty. Remedial measures taken by H.W. Wood include terminating an employee involved in the misconduct, creating new compliance positions, implementing controls for continuous monitoring of third-party relationships, and updating policies and procedures.
Individual Charges and International Cooperation
The Justice Department has charged eight individuals in related matters, including the former chairman of Seguros Sucre and Seguros Rocafuerte, Juan Ribas Domenech, who pleaded guilty to money laundering conspiracy. The IRS-CI Global Illicit Financial Team and the FBI’s International Corruption Squad are actively investigating the case.
Moreover, in a related but separate investigation, the Justice Department issued an FCPA Corporate Enforcement Policy declination to another U.K.-based reinsurance broker, Jardine Lloyd Thompson Group Holdings Ltd. (JLT). JLT disgorged approximately $29 million in connection with bribes paid through a Florida-based intermediary to Ecuadorian government officials. The resolution serves as a reminder that the department remains vigilant in combating corruption on a global scale.
Conclusion
The resolutions with Tysers and H.W. Wood highlight the Justice Department’s commitment to upholding the rule of law and ensuring accountability for corporate and individual wrongdoing. As these cases unfold, the legal community will be closely monitoring the ongoing investigations and their potential implications for international business practices.
John Peterson
is the Managing Attorney of FBR, a New York law firm that specializes in representing SEC and FCPA whistleblowers. John has worked for almost a decade on financial crime and corruption cases around the globe. He is a featured expert in the field on LexisNexis and regularly acts as an expert commentator in business and legal media on corporate crime and international corruption issues.
