Three More Execs Plead Guilty in Insurance Probe

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A former managing director of Marsh & McLennan and two officials of an American International Group (AIG) underwriting unit pleaded guilty on February 15 to criminal charges arising from New York Attorney General Eliot Spitzer's investigation of fraud and bid-rigging in the insurance industry.

Joshua Bewlay, a former Marsh managing director in charge of excess casualty placements in the company's Global Brokering unit, pleaded guilty to a felony fraud charge today before New York State Judge James Yates.

Also pleading guilty to a felony charge was John Mohs, a manager at AIG's American Home Assurance Co. unit. Carlos Coello, an American Home underwriter, pleaded guilty to a misdemeanor fraud count.

All three were accused of participating in an alleged Marsh scheme to rig renewal bids in favor of incumbent insurers by producing deliberately inflated competing quotes, known within Marsh as "B quotes."

Bewlay and Mohs face up to four years in prison on the charges, while Coello faces a maximum of one year. All have agreed to cooperate with Spitzer's investigation.

While entering his guilty plea, Bewlay described "an official protocol whereby Marsh clients were given a significantly understated figure when they asked about the amount of revenue Marsh derived from placement of service agreements."

Bewlay is no longer employed by Marsh, a spokeswoman confirmed. Mohs and Coello have both been placed on leave by American Home, and AIG spokesman said. Both used to report to Karen Radke and Jean-Baptist Tateossian, two American Home executives who pleaded guilty to felony charges related to the bid-rigging scheme last year.

Spitzer's investigation has now produced nine guilty pleas, including one official of Ace and two executives of Zurich American Insurance Company.

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