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The Anticorruption Blog

Aon settles FCPA enforcement actions with DOJ, SEC

Posted in Commercial Bribery, Foreign Corrupt Practices Act

Aon Corp., an Illinois-based world leader in risk management, insurance, and reinsurance brokerage services, has entered into a Non-Prosecution Agreement (“NPA”) with the Department of Justice (“DOJ”) and has settled a civil action brought by the Securities and Exchange Commission (“SEC”) stemming from alleged violations of the anti-bribery, books and records, and internal controls provisions of the Foreign Corrupt Practices Act (“FCPA”).

Conduct

  • Between 1983 and 2007, A group of Aon’s subsidiaries are alleged to have made over $3.6 million in improper payments to secure or retain business in Costa Rica, Egypt, Vietnam, Indonesia, the United Arab Emirates, Myanmar, and Bangladesh, a portion of which were made directly or indirectly to government officials in these countries.  Aon is alleged to have failed to accurately record these payments in its books and records or to maintain adequate internal controls to detect and prevent these payments.
  • The improper payments at issue fell into two categories: (1) training, travel, and entertainment for employees of foreign government-owned clients and third parties and (2) payments made to third-party facilitators.  Under the first category, Aon or its predecessor, while serving as insurance broker for an Egyptian government-owned company, allegedly funded U.S. trips for company employees that included a disproportionate amount of leisure activities and lasted longer than the business component would justify; the company’s books and records did not accurately reflect the true nature of these payments.  As to the second category, Aon subsidiaries purportedly made payments to third parties without taking steps to ensure that the money did not pass to government officials.  Some of the payments to third parties also appeared not to come in response to any legitimate services, raising the suspicion that such third-party payments were merely fronts for payments to government officials.

Penalties

  • Pursuant to its settlement with the SEC, Aon agreed to pay disgorgement of $11,416,814 in profits and $3,128,206 in prejudgment interest, totaling $14,545,020.  The company also consented to entry of a final judgment permanently enjoining future books and records and internal controls violations under the FCPA.  As part of the NPA, Aon agreed to a $1.764 million criminal fine and to boost its compliance, bookkeeping, and internal controls programs.

Notes

  • In its press release announcing the NPA, the DOJ commended Aon for its “extraordinary cooperation with the Department, including its thorough investigation of its global operations and complete disclosure of facts to the Department, and its early and extensive remediation.”
  • In spite of the seemingly corrupt nature of the improper payments at issue, the SEC’s complaint did not allege anti-bribery violations on Aon’s part.