AIG and General Re executives convicted of fraud

by Gill Montia

Story link: AIG and General Re executives convicted of fraud

Five former employees of insurers, American International Group (AIG) and General Re, have been convicted of fraud and conspiracy to defraud. The executives misled investors by inflating AIG’s reserves.

Four of those convicted worked for General Re and one for AIG; it can be argued that their conduct led to the resignation of AIG founder and head, Hank Greenberg, in 2005.

All five were accused of conspiring to artificially inflate AIG’s reverses by $500 million, in 2000 and 2001, via a deal between the two companies.

This involved an agreement that AIG would refund a $10 million premium charged by General Re and pay it a fee of $5 million.

Ronald Ferguson, General Re’s chief executive from 1987 to September 2001; Elizabeth Monrad, General Re’s former chief financial officer; Robert Graham, a former Gen Re senior vice-president and assistant general counsel, and Christopher Garand, a former General Re senior vice-president and head of General Re’s US reinsurance operations have all been convicted.

Christian Milton, AIG’s former vice-president of reinsurance, was also found guilty. All face custodial sentences.