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Chicago's Aon Corp. agrees to $1.76 million criminal penalty

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below, Justice Department release UPDATED BELOW WITH AON STATEMENT......

AON CORPORATION AGREES TO PAY A $1.76 MILLION CRIMINAL PENALTY
TO RESOLVE VIOLATIONS OF THE FOREIGN CORRUPT PRACTICES ACT

WASHINGTON - Aon Corporation, a publicly traded corporation headquartered in Chicago and one of the largest insurance brokerage firms in the world, has entered into an agreement with the Department of Justice to pay a $1.76 million penalty to resolve violations of the Foreign Corrupt Practices Act (FCPA), announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.

According to the non-prosecution agreement, Aon's United Kingdom subsidiary, Aon Limited, administered certain training and education funds in connection with its reinsurance business with Instituto Nacional De Seguros (INS), Costa Rica's state-owned insurance company. The supposed purpose of the funds was to provide education and training for INS officials. However, 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. Many of the invoices and other records for trips taken by INS officials did not provide any business purpose for the expenditures, or showed that the expenses were clearly not related to a legitimate business purpose.

As part of the agreement, Aon admitted that Aon Limited's accounting books and records related to the funds, which were consolidated into Aon's books and records, 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.

In addition to the monetary penalty, the agreement requires that Aon Corporation adhere to rigorous compliance, bookkeeping and internal controls standards and cooperate fully with the department.

The department entered into a non-prosecution agreement with Aon as a result of Aon's extraordinary cooperation with the department and the U.S. Securities and Exchange Commission (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 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.

Additional information about the Justice Department's FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.

In a related matter, Aon Corporation reached a settlement with the SEC and agreed to pay approximately $14.5 million in disgorgement and prejudgment interest. The SEC settlement was filed today.

This case is being handled by Trial Attorney Andrew Gentin of the Fraud Section in the Justice Department's Criminal Division with assistance from the FBI's Washington Field Office's dedicated FCPA squad. The department acknowledges and expresses its appreciation for the assistance provided by the SEC's Division of Enforcement.

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below, AON statement....

Aon Confirms Settlement Agreements with DOJ and SEC

CHICAGO, December 20, 2011 - Aon Corporation (NYSE:AON), today said it has agreed to a settlement agreement of approximately $16.3 million with the U.S. Department of Justice (DOJ) and the U.S. Securities and Exchange Commission (SEC) relating to certain payments made in overseas jurisdictions between 1983 and 2007.

Specifically, Aon has agreed to pay $1.76 million to the DOJ as part of a non-prosecution agreement and approximately $14.55 million to the SEC in disgorgement and interest to settle a civil action. The company expects no impact on fourth quarter results as the settlement amounts were accrued for in prior periods.

In the non-prosecution agreement, the DOJ cited Aon's extraordinary cooperation; its timely and complete disclosure of the facts; the early and extensive remedial efforts undertaken by the firm, including the substantial improvements Aon has made to its anti-corruption compliance procedures; and Aon Limited's prior settlement of these matters with its U.K. regulator. Aon Limited is the insurance brokerage and risk management business of Aon in the United Kingdom.

Since beginning an internal review of these issues in 2007, Aon has put in place a comprehensive, global and robust anti-corruption program designed to prevent and detect improper conduct. As part of a related settlement in 2009, Aon Limited's regulator, the U.K. Financial Services Authority (FSA), stated that "the pro-active determination of Aon Ltd.'s current senior management to identify past issues and improve the firm's systems and controls in this area is a model of best practice that other firms may wish to adopt."

"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," said Greg Case, president and chief executive officer of Aon. "Aon has invested a significant amount of time and resources in anti-corruption compliance and transparency to greatly enhance our controls and processes.

"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."

Throughout the course of its review, Aon cooperated fully with all relevant agencies, including the DOJ, the SEC and the FSA.

# # #

About Aon
Aon Corporation (NYSE:AON) is the leading global provider of risk management, insurance and reinsurance brokerage, and human resources solutions and outsourcing services. Through its more than 61,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via innovative and effective risk and people solutions and through industry-leading global resources and technical expertise. Aon has been named repeatedly as the world's best broker, best insurance intermediary, reinsurance intermediary, captives manager and best employee benefits consulting firm by multiple industry sources. Visit http://www.aon.com for more information on Aon and http://www.aon.com/manchesterunited to learn about Aon's global partnership and shirt sponsorship with Manchester United.

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Lynn Sweet

Lynn Sweet is a columnist and the Washington Bureau Chief for the Chicago Sun-Times.

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