Saturday, March 7, 2009

AIG executive gets 4 years in prison; it could have been life sentence

AIG executive handed 4-year sentence
Jan. 28, 2009

A federal court in Hartford, Conn., handed a former American International Group Inc. (NYSE:AFF) executive a four-year sentence for his role in a $500 million fraud scheme.

Judge Christopher Droney ignored sentencing guidelines that could have given former vice president of reinsurance Christopher Milton a life sentence, Business Insurance reported Wednesday.

Droney said Milton's actions were deliberate. "He knew this was not a bona fide transaction, but rather one designed to cook the books of AIG," Droney said.

Milton was convicted along with former General Re executives Christopher Garand, Robert Graham and Elizabeth Monrad, and former General Re Chief Executive Officer Ronald Ferguson. Prosecutors said the executives created General Re Corp. for the purpose of making AIG appear wealthier than it was.

The federal government last fall stepped in to rescue AIG, the nation's largest insurance company, with a $150 billion rescue package.

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