A former executive with global insurance brokerage firm Marsh has pleaded guilty to misdemeanor fraud charges related to the contingency fee abuses that have rocked the industry.
The office of New York State Attorney General Eliot Spitzer confirmed that Todd Murphy, a former senior vice president in the Excess Casualty Division of Marsh's Global Broking Unit, entered a plea in Manhattan Criminal Court admitting that he engaged in a scheme to defraud clients.
He is the fourth Marsh executive to enter a guilty plea. Mr. Murphy, who lives in Connecticut, could face up to one year in prison, but prosecutors said he is cooperating with investigators and has agreed to testify in future cases.
A spokeswoman for Marsh & McLennan Companies, the parent company of New York-based Marsh, said there would be no comment. She acknowledged Mr. Murphy had been employed by Marsh but is no longer with the company.
Mr. Murphy is the fourth person in Marsh management to admit he engaged in activity to defraud clients by steering insurance contracts to certain carriers in return for lucrative contingent commissions.
The others were Josh Bewlay, Robert Stearns and Kathryn Winter.
According to Mr. Spitzer's office, the evidence against Mr. Murphy involves e-mails allegedly requesting insurers to submit bogus quotes in an effort to steer business toward a preferred carrier, American International Group.
In order to steer business to AIG it was alleged that he had asked four different carriers on at least two occasions, once in 2001 and once in 2002, to supply bids in excess of the AIG bid. In both cases, the client bound the policy with AIG.
Mr. Spitzer's office indicated there are four more pleas pending related to contingency fee illegality.
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