Sex party charges hit insurance managers

Two former managers at a German insurance firm have been charged with criminal breach of trust - for organising a sex party and trying to hide the costs of prostitutes hired for their colleagues.

• Prostitute-orgy insurer had a sex habit - Business & Money (30 Aug 12)
• Insurer loses customers after orgy scandal - Business & Money (16 Jul 11)
• Budapest sales rep sex party cost €83,000 - National (22 May 11)

The orgy party involved around 20 prostitutes at the historic Gellert spa in Budapest, organised for sales representatives who had performed well - although presumably only male heterosexual ones.

It became a national scandal for Ergo insurance, a subsidiary of Hamburg-Mannheimer when details leaked last year.

Now two former Ergo managers aged 42 and 53, are accused of violating the company’s internal rules by commissioning the prostitutes and concealing the associated costs, said a state prosecutor spokesman.

The 2007 sex party was not consistent with the business’ objective, nor with the image of the insurer, the spokesman said, and the two managers knew that. The criminal investigation into the matter was carried out after a complaint was filed by Ergo in Düsseldorf.

The state is also filing charges against the former joint manager of an event-planning agency who worked with the two company managers to plan the trip. The participation of prostitutes in the party was part of the plan from the start, as the two managers approached the company about the trip with a motto “total party,” the prosecutor’s office said.

The prosecutor’s office estimates that the party, which involved at least 64 insurance agents, cost Ergo €52,000. An investigation shows that the company’s executive board at the time did not know of the trip, the spokesman for the prosecutor’s office said.

The event planning agency reportedly used a contact in Budapest, who had connections in the red-light milieu, to organise the prostitutes. The agency then reportedly helped disguise their costs in its bill.

Ergo lost more than 500 customers during 2011 in the wake of the scandal.

At the three-day party, four-poster beds were reportedly set up on either side of the well-known Gellert baths, and an individual salesman could do “what he wanted” with the prostitutes, who received stamps on their arms after each visit with a man.

Certain prostitutes, with white armbands, were reserved only for the top employees.

In August it was reported that though the Ergo CEO Torsten Oletzky had maintained that the 2007 Budapest trip was an isolated incident, from 2009 to 2011 the company also paid for employees to visit Hedonism II, a swingers hotel in Jamaica, and a brothel on the Spanish island of Majorca.

Ergo told the business newspaper Handelsblatt at the time that the trips to Majorca and Jamaica were not the same as the Budapest party, because they were organised by decentralised offices, and the choice of hotels was made by independent agents.

DPA/The Local/mbw