Gen Re, AIG execs convicted

Five former executives of insurance giants General Reinsurance Corp. and American International Group Inc. were convicted Monday on charges accusing them of helping to deceive AIG investors through a sham transaction in 2000.

Prosecutors in the case, tried in Hartford, Conn., said the defendants helped AIG fraudulently inflate its loss reserves by $500 million.

AIG acknowledged accounting improprieties, restated its earnings for 2000 through 2004 and agreed to pay $1.64 billion to settle sales and accounting probes in 2006.

The matter led to the ouster in 2005 of Maurice “Hank” Greenberg, AIG’s longtime chief executive, who wasn’t charged in the case and has denied wrongdoing.

The trial featured testimony about Warren Buffett, chairman of Berkshire Hathaway Inc., which owns General Re. Buffett also wasn’t charged and has denied wrongdoing.

Jurors convicted the defendants on all counts, including conspiracy, securities fraud, mail fraud and making false statements.

The defendants are due to be sentenced May 15. They face maximum 20-year terms on the most serious charges.

Former Gen Re Chief Executive Ronald Ferguson, 66, was convicted along with former General Re finance chief Elizabeth Monrad, 53; ex-Senior Vice President Christopher Garand, 60; former General Re assistant general counsel Robert Graham, 59; and AIG’s ex-head of reinsurance Christian Milton, 60.

Lawyers for at least three defendants promised appeals.