Jardine Lloyd Thompson Group Holdings Ltd: The Corporate Declination

Jardine Lloyd Thompson Group Holdings Ltd agreed to give up $29,081,951 in profits from Ecuador insurance contracts under its March 2022 declination letter. The Justice Department’s investigation found that an employee and agents used intermediary payments to fund bribes for business with Seguros Sucre, Ecuador’s state-owned insurer. The company’s FCPA case ended in a decision not to prosecute JLT, with cooperation and disgorgement obligations.

The letter describes approximately $10,800,000 paid to a Florida-based intermediary between 2014 and 2016, with approximately $3,157,000 used for bribes to Ecuadorian officials. Those figures describe different parts of the payment trail: what went to the intermediary and what funded the bribes. JLT’s profit from the contracts was the separate basis for the disgorgement agreement.

The Renewal the Intermediary Helped Keep

The criminal factual proffer of the Colombian subsidiary’s chief executive describes the business behind the commissions. Seguros Sucre appointed the broker to handle reinsurance for Ecuador’s Ministry of Defense for 2013 through 2014, then indicated that it might not renew the business. The executive and the owners of a Panama-registered introducer operating from Miami discussed retaining that account.

According to the executive’s admissions, the introducer’s owners arranged meetings with Seguros Sucre officials, including its chairman, after which Seguros Sucre agreed to retain the broker. The executive and his co-conspirators agreed to pay bribes to the chairman and another official in exchange for the business. The chairman had authority over awarding Seguros Sucre business, making the official relationship part of the commercial bargain.

The Justice Department’s later announcement identifies the executive as the former chief executive of JLT’s Colombian subsidiary. The proffer describes an executive who introduced the broker to the intermediary, learned how the scheme worked and directly caused some of the illegal payments. For someone inside the business, the useful connection is between the threatened renewal, the intermediary’s meetings and the executive’s payment decisions.

Approved in Panama, Paid Somewhere Else

The executive’s proffer says the broker approved the introducer in May 2014 and authorized commissions to its Panama bank account. The later commission agreement called for $1.8 million on the Ministry of Defense’s 2013 through 2014 reinsurance contract and an 8% commission on the following year’s contract. Those terms put a price on the introducer’s role in keeping government insurance business.

The payments did not follow the approved destination. At the introducer owners’ request and with the executive’s approval, commissions went to accounts in the United States, Panama and Switzerland that were not in the introducer’s name. The executive’s admissions connect the approved relationship to the people who authorized a different route for the money.

The introducer owner’s criminal factual proffer traces at least eleven transfers from the Colombian subsidiary’s U.S. bank account to a Swiss brokerage account. It describes commissions from reinsurance policies covering the Ministry of Defense and other Ecuadorian state-owned entities, with a portion intended for Seguros Sucre’s chairman in exchange for official influence. An insider who knows why a different beneficiary appeared on the payment request can explain a part of that trail that the approved vendor file alone would miss.

A Contract Created to Explain the Transfers

The executive’s proffer describes a false, backdated contract created in February 2015 between the Colombian subsidiary and the company holding the Swiss account. The executive signed it even though that company provided no services to the broker. The contract went to the Swiss bank to justify the payments already being routed there.

The introducer owner’s admissions describe the next part of the route: cash and securities moved to another Swiss account held for the chairman’s benefit, with transfers passing through U.S. accounts held by a Cayman Islands company. Money then reached U.S. accounts controlled by the chairman, including accounts held jointly with relatives. The proffer also describes false explanations given to banks and the broker’s compliance personnel.

We see a concrete mismatch here: the company named in the contract had supplied no service, but the contract supplied an explanation for its receipts. The employee who knows when that document was created, who requested it and what work actually occurred can connect the paperwork to the payment. In this case, the executive’s admissions supply that connection directly.

What the Corporate Declination Required

The Justice Department’s letter credits JLT’s voluntary disclosure, cooperation and remediation, including separation from the executive and intermediary involved. It also identifies improvements to anti-corruption training and compliance. JLT agreed to continue providing information and making knowledgeable officers, employees and agents available for interviews or testimony.

The agreement measured disgorgement by the profit from the corruptly obtained and retained contracts. It allowed credit for payment to the U.K. Serious Fraud Office under a separate resolution addressing the same conduct, with any unpaid balance due to the United States Treasury under the letter’s terms. In its November 2023 announcement, the Justice Department reported that JLT had disgorged the profits. The payment account belongs beside the Justice Department’s decision not to prosecute JLT; the individual proffers explain how the commissions worked.

What an Insurance Insider Can Explain

An insurance insider may see the payment trail from the commercial side or the finance side. The person handling the intermediary relationship may know the promised service and the customer contact. Someone approving or recording the payment may know the beneficiary, the invoice description and the questions raised internally.

An engagement agreement describes the services someone was hired to perform, while invoices, evidence of delivery and beneficiary records help explain what followed. Third-party due diligence also leaves an internal history: the reason for choosing an intermediary, the qualifications offered, questions raised and management’s response. For someone who approved or questioned the payment, those decisions may explain why the business kept paying.

That knowledge can also sit outside the company making the payment. The New York State Bar Association’s 2011 article The Multinational Employer in the Age of the Whistleblower discusses how employees of agents, consultants, distributors, vendors, service providers and customers may learn about a violation. The commercial relationship gives people a view of conduct that an organization chart alone would miss.

We connect those records to the business decision the payment was meant to influence. Our whistleblower experts work with your knowledge of the transaction and bring in foreign-bribery whistleblower lawyers to build the case with you.

The Whistleblower’s Reward Is a Separate Question

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. Foreign-bribery reporting uses separate agency whistleblower programs, and we work out with you which one fits what you know.

You Know What the Commission Was For

If you know the business reason given for a commission and what the intermediary actually did, speak with our whistleblower experts about the payment. We build the case with you, bring in foreign-bribery whistleblower lawyers who understand intermediary payments, and stay beside you through the process.