NEW YORK -- A former senior executive at Marsh & McLennan Cos. Inc. and two American International Group Inc. employees pleaded guilty yesterday to criminal charges in New York's probe of bid rigging and price fixing in the insurance industry.
Joshua Bewlay, 39, of Tuxedo Park, N.Y., a former managing director at Marsh; John Mohs, 36, of Manhattan, a vice president in a unit of AIG, and Carlos Coello, 33, of Teaneck, N.J., an AIG underwriter, entered their pleas yesterday in Manhattan's state Supreme Court.
All three defendants admitted to participating in a scheme that allowed Marsh, the nation's largest insurance broker, to protect incumbent insurance carriers when their business was up for renewal.
Bewlay, fired last week, and Mohs, currently on leave, pleaded guilty to one felony count each of scheme to defraud and face up to four years in prison if convicted. Coello, also on leave, pleaded guilty to a misdemeanor count of scheme to defraud, punishable by up to one year in jail.
New York Attorney General Eliot Spitzer said the defendants are expected to testify in future cases, as are the six other insurance industry employees who have already entered guilty pleas.
Bewlay told the court the practice of obtaining losing quotes -- known as "B quotes" -- to steer business was widespread in the industry and in the company, not just the effort of a few employees.
"I personally solicited losing quotes on a number of occasions," Bewlay said in his plea statement. Spitzer sued Marsh in October and also implicated AIG and several other major insurance companies. He said brokers throughout the industry, rather than get the best prices for policies as they are required to do, took payoffs from insurance companies to steer corporate clients their way.
Justice James Yates accepted the pleas but deferred sentencing, saying he will impose punishment -- depending on each defendant's level of cooperation -- when Spitzer's investigation is completed.