The Hartford Latest Insurance Company to Hire Top Prosecutor to Deal with Blizzard of Subpoenas

December 22, 2004

The Hartford Financial Services Group has hired a top federal corruption prosecutor in Connecticut amid a wave of state investigations into the insurance industry.

The Hartford, which has been subpoenaed by attorneys general in several states and is facing an investigation by the U.S. Securities and Exchange Commission, named Ronald Apter as vice president and deputy associate counsel for compliance. Apter successfully prosecuted former Bridgeport Mayor Joseph Ganim on corruption charges.

The Hartford is the latest insurer to beef up its legal team with a high-profile prosecutor, said Paul Newsome, an insurance analyst with A.G. Edwards in St. Louis. Ace Ltd., one of four insurers named in connection with an investigation into alleged bid-rigging at Marsh & McLennan Cos., has hired Mary Jo White, the former U.S. attorney for the Southern District of New York.

“All major insurance companies are spending an enormous amount of time dealing with the blizzard of subpoenas,” Newsome said. “There’s absolutely an enormous effort trying to settle the situation as fast as they possibly can.”

The Hartford, which has not been charged with any wrongdoing, and other insurance companies have received subpoenas in recent months from New York, Connecticut and other states seeking information about insurance broker compensation practices.

New York Attorney General Eliot Spitzer filed a lawsuit in October against Marsh & McLennan Companies Inc., the nation’s largest brokerage. Spitzer has accused the New York-based brokerage of bid rigging, price fixing and demanding incentive fees from insurance companies in exchange for sending more property and casualty insurance business their way.

The Hartford recently fired two employees after the company concluded they were not fully cooperating with Spitzer’s investigation.

The company would not say whether Apter was brought in to handle the investigations. Corporate legal departments are facing growing demands to respond to inquiries and new regulations enacted in response to scandals in recent years.

“It’s related to The Hartford wanting to have the best legal department it can have to work on the wide variety of legal and compliance issues that a company such as ours deals with,” said Joshua King, a spokesman for The Hartford.

Bringing in an outsider like Apter suggests the company is confident it does not have major problems, Newsome said.

Apter is the latest of a string of top corruption prosecutors and FBI agents in Connecticut to leave for other jobs.

Apter, a federal prosecutor for 13 years who supervised the Hartford office, was renowned for his detailed knowledge of the Ganim case. The investigation took several years and involved nearly two years of wiretaps and dozens of interviews with cooperating witnesses.

‘”The whole case was in his head,” said Michael Sklaire, another former federal prosecutor who tried Ganim. “He lived and breathed the Ganim case for several years.”

Ganim, who had ambitions to become governor, was convicted last year of steering city contracts in exchange for cash, investment quality wine, monogrammed shirts and other expensive gifts. He is serving nine years in prison.

When Ganim took the stand in his own defense, Apter launched a blistering cross-examination in which the mayor struggled to explain how he paid for luxuries by saying he kept thousands of dollars stashed in his top drawer with his underwear.

“I think his cross-examination of the former mayor put the nail in the coffin,” said Edward Adams, a retired FBI agent who investigated Ganim.

Apter also won a conviction against the former city manager of Meriden, Michael H. Aldi, for accepting payoffs in return for awarding municipal contracts. Apter was among the seasoned prosecutors tapped for a new anti-terrorist task force.

“He obviously did a fantastic job in the Ganim case,” said U.S. Attorney Kevin O’Connor. “I think Ron has an innate ability to take very complex cases and present them to a jury in a manner the average person could understand.”

Nora Dannehy, who is leading the investigation into former Gov. John G. Rowland and is prosecuting his top aide, will replace Apteras supervisor of the Hartford office, O’Connor said. She will continue handling her cases as well.

Copyright 2004 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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