Alexandria, Va.–Three former General Reinsurance executives and one formerly with American International Group pleaded innocent in federal court today to charges they helped AIG improperly bolster earnings reports.
Despite efforts by their lawyers to secure a delay until September, trial for the four was set for May 22 in Alexandria, Va.
The four are facing a 13 count indictment, including conspiracy, securities fraud, false statements to the SEC, wire fraud and mail fraud.
The defendants are:
o Ronald Ferguson, former chief executive officer at Gen Re, a subsidiary of Berkshire Hathaway.
o Betsy Monrad, Gen Re's former chief financial officer.
o Robert Graham, former Gen Re assistant general counsel.
o Christian Milton, AIG's former vice president of reinsurance.
“No one is more looking forward to a trial in this matter than Betsy Monrad,” her lawyer, Paul Shechtman of Stillman and Friedman in New York, said after the arraignment. “Virginia moves fast, but we'll be ready.”
Prosecutors and other defense counsel declined comment after the arraignment. U.S.District Court Judge Gerald Bruce Lee set aside four weeks for the jury trial.
The charges revolve around allegations that AIG and Gen Re executives engaged in a scheme involving bogus finite reinsurance arrangements designed to improve AIG's financial picture to impress securities analysts and sustain its stock performance.
In addition to the indictment by a federal grand jury in Norfolk, Va., the four were also hit with a civil suit by the U.S. Securities and Exchange Commission.
The deals at issue, according to the indictment, began in 2000 after AIG stock prices dropped and the company encountered negative analyst reports.
According to a previous filing in a guilty plea last year by John Houldsworth–former CEO for Gen Re subsidiary Cologne Re Dublin–Maurice Greenberg, AIG's former chairman and CEO, called Mr. Ferguson and asked if Gen Re could lend AIG up to $500 million in reserves on a short-term basis through a loss-portfolio transfer without transferring any risk of loss to AIG.
Mr. Greenberg so far has not been charged in the case, although prosecutors say the probe is continuing.
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