Former vice-president of insurance American International Group Inc. (AIG) was sentenced to four years in prison for his role in a fraudulent scheme to manipulate AIG Finally, in accordance with the Department of Justice.
Christian M. Milton, 61, of Wynnewood, Pennsylvania, and vice-president of AIG Reinsurance 1982 to March 2005, was convicted by federal jury on Feb. 25, 2008 on charges of conspiracy, securities fraud, false statements by the U.S. Securities and Exchange Commission and mail fraud.
AIG shareholders have lost at least $ 544 million as a result of this scheme, according to the court.
In addition to imprisonment, Milton was the U. S. District Judge Christopher F. Droney two years probation period after his release from prison and a fine of $ 200000. Milton was to surrender to federal authorities for 60 days.
Prosecutors evidence that during the trial showed that Milton and his co-defendant, Ronald E. Ferguson, Elizabeth A. Monroe, Robert D. Graham, and Christopher P. Garand, all former executive of General Reinsurance Corp. officials in a scheme to inflate AIG falsely reported reserves, which is an important indicator of financial health insurance industry analysts and investors. The research evidence that fraud took place through the use of two sham reinsurance transactions between subsidiaries of AIG and the exploitation of the General Re, in response to criticism from analysts to reduce the $ 59 billion in AIG stock losses in the third quarter of 2000.
The two sham transactions, exploitation, prosecutors have shown to increase the reserves AIG $ 250 million in the fourth quarter of 2000 and $ 250 million in the first quarter of 2001, the trend of concealing the loss of reserves due to rising premiums. Experiments have shown that this question AIG confirmed that the filing with the SEC in May 2005. Evidence in the production said that the result was disclosed to investors, AIG and through various media of 14 and 14 February, in March 2005, shares of AIG populations ranged from $ 73.12 to $ 61.92.
Five defendants were found guilty on all charges against him, instead of 16-count indictment. Then, 31 October 2008, Judge Droney found that the shareholders of AIG lost $ 544 million and $ 597 million as a result of the defendant's fraudulent scheme.
Last month, Ronald Ferguson, former chief executive of General Re, has been to two years' imprisonment and a fine of $ 200,000 for his role in the fraud. Three other former General Re - Garand, Monrad and Graham - have not yet been sentenced.
General Re is Warren Buffett of Berkshire Hathaway Inc.
According to evidence at the trial stage, each of the defendants knew that the real purpose of the transaction to allow AIG to falsely report an increase of reserves in their statements to analysts, investors and the SEC. The defendants structured a sham reinsurance transaction that is in accordance with the evidence in court, and a wrong way to the paper, make it appear as if they were AIG General Re reinsurance, when tests showed that the parties knew AIG transaction, I would like to manage its financial reporting.
In addition, evidence that during the trial showed that the defendants had a secret agreement that AIG will not have to pay for the loss of contracts, AIG would return to Gen Re $ 10 million in payment of AIG and General Re AIG paid General Re $ 5 million fee to the transaction.
According to prosecutors, Milton, when he was a former Director General of the General Director of Maurice "Hank" Greenberg, AIG resignation in 2005, has denied knowledge of the unauthorized transactions, and not to attack.
After leaving AIG in March 2005, Milton Greenberg is set to work in its current businesses CV Starr and to the insurance and investments.
Source: U. S. Department of Justice
Contact: U. S. Department of Justice Office of Public Relations,
+1-202-514-2008, TDD: +1-202-514-1888
Former vice-president of AIG sentenced to 4 years in the reinsurance plan
Labels: Global Market, Insurance