Legal News

Defendants Found Guilty in General Re Fraud Scheme

By Dan Slater

1,080 years. It may wind up being a meaningless number, but that’s the combined jail time faced by the four former executives of General Re Corp. and the one former executive of AIG who were found guilty today by a Connecticut jury for in a fraud scheme. In 2000 and 2001, they allegedly used reinsurance deals to inflate AIG’s reserves by $500 million, thereby artificially boosting its stock price. Here’s the early WSJ report. Click here, here and here for past LB coverage.

The defendants were former General Re CEO Ronald Ferguson, represented by Clifford Schoenberg; former General Re CFO Elizabeth Monrad, represented by Reid Weingarten; former assistant general counsel Robert Graham, who was represented by Alan Vinegrad; and former General Re Senior Vice President Christopher Garand. Also charged was Christian Milton, AIG’s former vice president of reinsurance.

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, Mr. 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.”

Full post as published by Law Blog - WSJ.com on February 25, 2008 (boomark / email).