NU Online News Service, Dec. 20, 2:28 p.m. EST

Aon Corp. has reached settlements with the U.S. Department of Justice and the Securities and Exchange Commission totaling around $16.3 million to resolve violations of the Foreign Corrupt Practices Act.

The DOJ says Aon's United Kingdom subsidiary, Aon Limited, administered training and education funds in connection with its reinsurance business with Costa Rica's state-owned insurance company, Instituto Nacional De Seguros (INS). While the funds were supposed to provide education and training for INS officials, the DOJ says between 1997 and 2005 Aon Limited used “a significant portion of the funds to reimburse INS officials for non-training related activity, including travel with spouses to overseas tourist destinations, or for uses that could not be determined from Aon's books and records.”

As part of the agreement, the DOJ says Aon admitted that Aon Limited's accounting books and records related to the funds “did not accurately and fairly reflect the purpose for which the expenses were incurred.”

Aon also admitted that it failed to devise and maintain an adequate system of internal accounting controls with respect to foreign-sales activities sufficient to ensure compliance with the FCPA, the DOJ adds.

The SEC says its complaint alleged that Aon's subsidiaries “made over $3.6 million in improper payments to various parties between 1983 and 2007 as a means of obtaining or retaining insurance business in those countries.”

The complaint says some of the improper payments were made “directly or indirectly to foreign-government officials who could award business directly to Aon subsidiaries, who were in position to influence others who could award business to Aon subsidiaries, or who could otherwise provide favorable business treatment for the company's interests.”

The SEC says Aon did not admit or deny these allegations as part of the settlement.

The DOJ notes that it entered into a non-prosecution agreement with Aon “as a result of Aon's extraordinary cooperation with the department and the SEC; its timely and complete disclosure of improper payments in Costa Rica and other countries that it discovered during its thorough investigation of its global operations; its early and extensive remedial efforts; the prior financial penalty of £5.25 million ($ 8.22 million at current exchange rate) that Aon Limited paid to the United Kingdom's Financial Services Authority (FSA); and the FSA's close and continuous supervisory oversight over Aon Limited. These factors also led to a substantially reduced monetary penalty.”

Greg Case, president and chief executive officer of Aon, says in a statement, “Acting with integrity is Aon's core value and we embody this in our commitment to the highest professional standards for our clients, markets and colleagues. Aon has invested a significant amount of time and resources in anti-corruption compliance and transparency to greatly enhance our controls and processes.”

He adds, “The FSA, DOJ and the SEC all have recognized Aon's determination to set and meet the requisite high standards of compliance in this area. We believe that today our compliance practices are a model of best practice for other firms to adopt.”

Aon says it expects no impact on fourth quarter results as the settlement amounts were accrued for in prior periods.

Special Reports /

Aon Settles with DOJ, SEC for Over $16M on FCPA Violation Charge

Related Stories

Recommended For You