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AmTrust Financial Services Inc., a multi-national insurer which includes an insurer and handler of workers’ compensation claims in California, has recently been the subject of a federal investigation into its accounting practices aided by an auditor who worked for the accounting firm BDO USA L.L.P., that audited AmTrust in 2014.

AmTrust provides property-casualty and workers’ compensation insurance for small to mid-sized businesses. The company reported $5.92 billion in direct written premiums in 2015, including $2.97 billion in workers compensation direct written premiums, according to a report released last month by rating agency A.M. Best Co. Inc.

The Wall Street Journal recently reported that a BDO USA auditor secretly taped conversations with colleagues about an audit of AmTrust using a recording device disguised as a Starbucks gift card. The auditor was cooperating as a whistleblower with the U.S. Securities and Exchange Commission and taped the conversations on behalf of the FBI, according to the article. One AmTrust spokesperson said the questioning about its accounting practices are "Fantasies concocted and intentionally publicized by parties who clearly have a self-serving agenda and appear to be trying to profit from misinformation about AmTrust." 

In statements given to the publication Business Insurance, AmTrust said it is unaware of any federal investigation, has not been contacted by the FBI, and is not aware of any special examination by the New York Department of Financial Services, which the Wall Street Journal article stated is ongoing.  The auditor who conducted the recordings now works for a group associated with forensic accountant Harry Markopolous, which aims to profit from rewards handed out under the SEC’s Whistleblower Program, the article reported. 

AmTrust was founded 19 years ago and has grown mostly through acquisitions into the nation’s third-largest workers’ compensation insurer by market share.  Its revenue in 2016 was $5.45 billion.