Gen Re, AIG executives convicted of fraud

A handful of high level insurers were convicted yesterday by the U.S Department of Justice for taking part in a plan to manipulate financial statements, according to published reports. The defendants include former General Re Corp. CEO Ronald Ferguson; Christopher P. Garand, senior vice president; CFO Elizabeth Monrad and Robert Graham, who was the Stamford, Conn.-based company’s senior vice president and assistant general counsel for two decades through October 2005 as well as a former executive of American International Group Inc. Christian Milton, AIG's vice president of reinsurance from about 1982 through March 2005 was also charged in the scheme that prosecutors say inflated the New York-based company’s reserves through reinsurance deals by $500 million in 2000 and 2001 as a way to inflate AIG’s reported loss reserves through artificial means. Mr. Ferguson, Ms. Monrad, Mr. Milton and Mr. Graham each face up to 230 years in prison and a fine of up to $46 million while Mr. Garand faces up to 160 years in prison and a fine of up to $29.5 million according to the Department of Justice. "We're not done. The investigation continues," said Paul Pelletier, one of three federal prosecutors who tried the case in U.S. District Court in Hartford, Conn., according to The Wall Street Journal. "We've got a lot of work to do to work up the ladder."