General Re, AIG Former Execs Convicted of Fraud
A federal jury has found five former insurance company executives guilty of a scheme to manipulate the financial statements of the world's largest insurance company.
Monday's verdict came in the seventh day of jury deliberations following a monthlong trial in federal court.
The defendants were four former executives of General Re -- a unit of Warren Buffett's Berkshire Hathaway -- and a former executive of American International Group .They sat stone-faced as the verdict was read.
They were accused of inflating AIG's reserves through reinsurance deals by $500 million in 2000 and 2001 to artificially boost its stock price.
The defendants were former General Re Chief Executive Officer Ronald Ferguson; former General Re Senior Vice President Christopher P. Garand; former General Re Chief Financial Officer Elizabeth Monrad; and Robert Graham, a General Re senior vice president and assistant general counsel from about 1986 through October 2005.
Also charged was Christian Milton, AIG's vice president of reinsurance from about April 1982 until March 2005.
Ferguson, Monrad, Milton and Graham each face up to 230 years in prison and a fine of up to $46 million. Garand faces up to 160 years in prison and a fine of up to $29.5 million.
"This is a very sad day, not only for Ron Ferguson, but for our criminal justice system," Clifford Schoenberg, Ferguson's personal attorney, said in a statement distributed at U.S. District Court in Hartford. "I and the rest of Ron's legal team will not rest until we see him -- and justice -- vindicated."
Prosecutors said during the trial that AIG Chief Executive Maurice "Hank" Greenberg was an unindicted co-conspirator in the case. Greenberg has not been charged and has denied any wrongdoing, but allegations of accounting irregularities, including the General Re transactions, led to his resignation in 2005.
In their closing statements, defense attorneys repeatedly invoked the name of the widely admired Buffett in arguing there was no wrongdoing and only a routine deal between AIG and Gen Re.
Buffett was not charged with any wrongdoing and did not testify at the trial.