AIG Tower in Hong Kong
Also see: "Bailout of AIG, the CIA & Covert Operations," and "COMAIR CRASH: THE AIG-9/11 CONNECTION"
" ... Four former executives at General Re Corp, a unit of Warren Buffett's Berkshire Hathaway Inc, and one former AIG executive were found guilty by a federal jury in Connecticut in February of fraud and conspiracy. The charges stemmed from a reinsurance deal in 2000 that prosecutors said misled investors about AIG's financial condition. ... "
Judge: AIG Reserves Fraud caused Big Investor Loss
Nov 3, 2008
By Martha Graybow
NEW YORK (Reuters) - A financial manipulation scheme cost American International Group Inc investors at least $544 million, a judge has estimated, a finding that could mean the five former executives convicted in the fraud will face lengthy prison terms when sentenced.
The case is unrelated to AIG's mortgage-related losses that led to a near collapse of the company in September and an $85 billion emergency line of credit from the U.S. Federal Reserve.
Four former executives at General Re Corp, a unit of Warren Buffett's Berkshire Hathaway Inc, and one former AIG executive were found guilty by a federal jury in Connecticut in February of fraud and conspiracy. The charges stemmed from a reinsurance deal in 2000 that prosecutors said misled investors about AIG's financial condition.
A sentencing date has not yet been set, but the judge's written ruling on Friday on the size of the investors' losses means that each defendant is expected to face stringent sentencing guidelines when their penalties are determined.
In economic crimes, victims' financial losses are central in calculating sentencing guidelines for defendants. The judge's finding that the fraud had more than 250 victims also ratchets up the potential prison time each defendant may face.
Federal sentencing guidelines are advisory for judges, who can depart from them if they choose.
Based on the judge's calculations, the sentencing guidelines in the case likely will be "through the roof," said Douglas Berman, a law professor at Ohio State University and expert in white-collar sentencing matters.
"We're looking at a suggested guideline range of at least decades" of prison time for each defendant, he said. "There is a separate question of whether the judge will consider it necessary and appropriate to impose a prison sentence that is so long, particularly because these are first-time offenders."
Convicted at trial were General Re's former chief executive Ronald Ferguson, former chief financial officer Elizabeth Monrad, former assistant general counsel Robert Graham, former senior vice president Christopher Garand, and AIG former vice president of reinsurance Christian Milton.
Prosecutors, in court papers, have sought "substantial" prison terms. Defense lawyers have pleaded for leniency.
At the center of the case was a finite reinsurance transaction that prosecutors said allowed AIG to improperly boost loss reserves by $500 million in 2000 and 2001, artificially bolstering its share price.
In estimating the investor losses, U.S. District Judge Christopher Droney rejected calculations by a government expert that they could be as high as $1.4 billion. The judge concluded that the same expert, using a different methodology, made a "reasonable estimate" of losses between $544 million and $597 million.
(Reporting by Martha Graybow, editing by Matthew Lewis)
Wednesday, November 12, 2008
Execs of Warren Buffett's Berkshire Hathaway, AIG Convicted of Conspiracy/Fraud Caused "Big Investor Loss" at AIG Unrelated to Mortgage Mess
Posted by Alex Constantine at 2:54 PM
Subscribe to: Post Comments (Atom)
Warren Buffett Murder Mystery??
Post a Comment