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ACE executive pleads guilty - The Royal Gazette

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Article published October 16. 2004 12:00AM
ACE executive pleads guilty
(Bloomberg) � An ACE Ltd. executive pleaded guilty to a criminal charge stemming from an insurance fraud probe of the industry by New York Attorney General Eliot Spitzer. She is the third person to do so in the last two days. Patricia Abrams, a vice president in ACE�s casualty group, pleaded guilty to a criminal charge of attempted restraint of trade and competition, Spitzer spokesman Brad Maione said. Abrams�s misdemeanour charge carries a maximum penalty of one year in prison. Spitzer yesterday sued Marsh & McLennan, accusing the company of bid rigging. Two American International Group Inc. executives pleaded guilty to involvement in the bid rigging hours before he announced his suit. Spitzer�s suit accused Marsh, the world�s largest insurance brokerage, of steering unsuspecting clients to insurers who paid the company the highest fees. Marsh officials rigged the bidding process by procuring phoney higher bids from other insurers involved in the scheme, Spitzer said. AIG executives Karen Radke and Jean-Baptist Tateossian pleaded guilty to roles in the rigging yesterday and are co-operating with Spitzer�s investigation. Spitzer said yesterday there would be �numerous civil and criminal cases to come.� ACE spokesman John Herbkersman declined to comment immediately. Larry Krantz, Abrams�s lawyer, did not return a call for comment. Abrams submitted her plea to state Supreme Court Justice Michael Ambrecht in New York yesterday. He also accepted the pleas of Radke and Tateossian. Abrams is the unnamed ACE vice president that Spitzer mentions in his Marsh & McLennan suit regarding a rigged insurance premium bid, Maione said. According to the Marsh complaint, an unnamed vice president sent an e-mail on December 17, 2002, to Marsh Global Broking�s Excess Casualty division, quoting an annual premium of $990,000 for a policy for Fortune Brands Inc.. a holding company engaged in the manufacture of home, office, liquor and golf products. Later that day, the bid was revised to $1.1 million so ACE would be less competitive, allowing Marsh to award the business to another insurance company, American International Group Inc., which was in on the bid rigging, the complaint said.
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A printer friendly article from the Royal Gazette
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Sat, 2004-10-16
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