Judge cancels more charges in bid-rigging casePosted On: Jan. 29, 2010 12:00 AM CST
NEW YORK—A New York state judge Friday dismissed criminal charges against more former insurance executives who had pleaded guilty to charges in connection with New York's bid-rigging investigation involving Marsh Inc.
Meanwhile, the judge reduced or modified criminal charges against other cooperators in the case, but rejected dismissing charges against one former broker after ruling that he violated the terms of his plea agreement.
The action, which came at the request of the New York attorney general's office, followed a similar motion last week involving several individuals who cooperated with the state's investigation.
At a hearing Friday in New York County Supreme Court, Judge James Yates dismissed outright the misdemeanor charges against two individuals who in 2004 and 2005 had pleaded guilty to criminal charges that they participated in a Marsh Inc. scheme to rig bids on client insurance placements.
In addition, Judge Yates reduced eight other individuals' felony guilty pleas to misdemeanors. Five will have the downgraded charges dropped entirely in six months, through a legal mechanism called adjournment in contemplation of dismissal, the judge said.
However, at the prosecutors' request, the judge did not apply the ACD ruling to three of the individuals whose charges were reduced. Instead, the judge imposed sentences.
Judge Yates sentenced Messrs. Bewlay and Anderson to unconditional discharge, which essentially is a conviction without punishment such as a jail sentence, fine or parole. “Over the period of the last five years, I believe you have suffered enough,” the judge said.
Mr. Keane's sentencing hearing was scheduled for March 2.
A final cooperator in the case—Todd Murphy, a former senior vp at Marsh who pleaded guilty to misdemeanor charges in 2005—was deemed ineligible for a “plea modification” by prosecutors because he violated the terms of his plea agreement when he reapplied for his insurance license one year after it had been revoked.
In addition, Assistant Attorney General Yu Jin Hong argued that Mr. Murphy did not provide “credible” testimony during one of the trials.
Judge Yates, who ruled that Mr. Murphy violated the terms of his plea agreement by seeking to reinstate his insurance license, said Mr. Murphy's misdemeanor charges will remain and imposed a sentence of unconditional discharge.
Another former insurance executive, Edward Coughlin, a former senior underwriter with the excess casualty division of Zurich American Insurance Co., pleaded guilty in 2004 to misdemeanor charges. A spokesman for the attorney general's office confirmed that Mr. Couglin already served a sentence of six months of probation.
Last week, Judge Yates dismissed or reduced similar criminal charges against nine other individuals in the case. The charges were brought originally by former New York Attorney General Eliot Spitzer, who had secured 21 guilty pleas as part of his probe into contingent commission practices in the insurance industry. The individuals had accepted plea agreements with prosecutors and cooperated in the state's investigation. Eight other executives were indicted in 2005 and later faced trial.
Prosecutors from New York Attorney General Andrew Cuomo’s office, which inherited the case, asked the judge to grant the dismissals “in the interest of justice.”
“Considering the related cases, and the results that were obtained with respect to the other individuals in this case, this is the most just and appropriate thing to do at this time,” the judge said in granting the motions.
Last October, Judge Yates acquitted three former Marsh executives of all charges in the case after a nearly 11-month trial. They are: Joseph Peiser, former managing director and head of Marsh’s global broking excess casualty unit; Greg J. Doherty, former Marsh senior vp and ACE USA local broking coordinator team leader; and Kathleen M. Drake, former Marsh managing director and local broking coordinator team leader.
In November, the judge dismissed criminal charges against three remaining defendants before their trial began. They are former Marsh Senior Vps Thomas T. Green Jr. and William L. McBurnie; and Geri Mandel, former senior vp at Zurich American Insurance Co.
In February 2008, former Marsh Managing Directors William Gilman and Edward J. McNenney were found guilty of an antitrust charge but acquitted of other charges. They were sentenced to 16 weekends in jail, which has been stayed pending appeal.
Marsh itself did not face any criminal charges in the case but paid $850 million in January 2005 to end officials’ bid-rigging and fraud probes.