The head of Mark Walter’s insurance companies told authorities he was unaware that the firms had loaned more than $20 billion to the sports mogul’s other businesses, according to people with knowledge of the matter. Dan Towriss, chief executive officer of Walter’s Delaware Life Insurance Co. and Clear Spring Life and Annuity Co., made the statements in a voluntary interview with federal prosecutors in New York in late August, two of the people said. Towriss made similar remarks in recent months to regulators at the Delaware Department of Insurance, another person said.
The comments heighten questions about how Walter, the billionaire owner of the Los Angeles Dodgers, was able to borrow from his insurers without having them disclose the arrangements to state regulators as required. The insurers belatedly reported the loans in June and said the US Department of Justice and Securities and Exchange Commission are investigating. Insurers are legally required to tell regulators which of their investments involve so-called affiliates – companies with which they share a common owner.
In his statements to authorities, Towriss said he didn’t know that the ultimate recipients of the loans were connected to Walter, the people said. Walter’s TWG Global holding company said in a statement that “no one has been harmed, there is no fraud, and no one at TWG Global has committed any wrongdoing.” The firm added that it’s continuing to work with the Justice Department and SEC “and we look forward to resolving this matter.”
Towriss isn’t thought to be a target of the probe, the people said. His statements add to the intrigue around a lending arrangement that swelled in recent years to represent more than 40% of the insurers’ investment portfolio. Many of the loans in question went to third-party companies controlled by people with longstanding ties to Walter, Bloomberg reported earlier. From there, the money was loaned back to other businesses controlled by Walter. It’s unclear who knew about the ultimate destination of the funds.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing