Former General Re and AIG executives in talks

New York: Four former General Reinsurance Corp executives and one at American International Group are in talks with prosecutors to resolve criminal charges that they defrauded investors, according to a court filing.

General Re Chief Executive Officer Ronald Ferguson, ex-Chief Financial Officer Elizabeth Monrad, ex-Senior Vice President Christopher Garand and ex-Assistant General Counsel Robert Graham and former AIG Vice-President Christian Milton were convicted in 2008 by a federal jury in Hartford, Connecticut.

A federal appeals court in New York reversed the convictions in August, and the former executives were scheduled to be retried on the charges in January. In documents filed on May 24 in federal court in Connecticut, prosecutors and defence lawyers asked to delay pre-trial proceedings in the case by two weeks.

"The parties have been, and continue to be, engaged in discussions concerning a potential global resolution of this matter," the defence lawyers said in the court document. "If such discussions result in such a resolution, that would obviate the need for the filing of the pre-trial motions as well as any other pre-trial and trial proceedings in the case."

Prosecutors said the fraud involved a sham transaction in 2000 and 2001 to inflate AIG's loss reserves by $500 million (Dh1,836 million). It preceded the financial crisis of New York-based AIG, which got a bailout of $182.3 billion from US taxpayers. The appeals court said the trial judge at the time, Christopher Droney, erroneously let prosecutors show jurors three charts with AIG stock-price data. Droney has since joined the appeals court.

Droney also erred by improperly instructing the jury on causation, according to the appeals court opinion.

Prison terms

He sentenced Milton to four years in prison, Ferguson to two years, Monrad to 18 months, and Garand and Graham each to one year. They are free on bail pending appeal. Two General Re executives who pleaded guilty testified as prosecution witnesses and were sentenced to probation.

General Re, a unit of Berkshire Hathaway, is based in Stamford, Connecticut.