10th Guilty Plea in Spitzer Investigation of Insurance Industry|
By Joel Stashenko
The Business Review
A former broker and managing director at Marsh Inc. pleaded guilty Thursday to charges in connection with New York Attorney General Eliot Spitzer's investigation of bid-rigging in the insurance industry.
Kathryn Winter, 50, of Manhattan became the 10th insurance industry executive to admit criminal wrongdoing. Spitzer's office said Thursday that all 10 are cooperating with the attorney general's investigation and are expected to testify at the trials of other industry executives.
Winter admitted directing insurance carriers to submit non-competitive bids for insurance business between 2001 and 2004. The bids gave Marsh customers the false impression of being submitted in a competitive process and that the lowest-cost insurance available was being purchased.
In reality, Spitzer said, the phony bids let Marsh protect insurance carriers and maximize profits from its insurance brokerage business by collecting fees known in the industry as contingent commissions or market service agreements.
Winter entered her plea before state Supreme Court Justice James Yates in Manhattan. She admitted to a count of first-degree scheming to defraud, a felony, and faces a possible maximum sentence of 1 1/3 to 4 years in prison.
However, Spitzer aides said Winter is cooperating with the attorney general's investigation of insurance bid-rigging and is likely to end up with a lighter punishment. Yates did not set a sentencing date Thursday.
Winter's attorney David Wickstrom declined comment Thursday.
Marsh spokeswoman Barbara Perlmutter said Thursday the company has settled with Spitzer and New York state insurance regulators, but that the company expects former employees to continue to face charges as Spitzer's investigation continues
"While this is unfortunate, it certainly is not an unexpected development," Perlmutter said. "We continue to cooperate with the office of the attorney general."
Winter is the third Marsh executive to plead guilty in connection with the insurance industry investigation. Four former executives at the American International Group Inc., two at the Zurich American Insurance Co. and one at ACE Ltd. have also pleaded guilty to charges.
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