US prosecutors said a scheme to manipulate the financial statements of the world’s largest insurance company, American International Group Inc, resulted in a loss of more than US$1 billion to investors.
Four former executives of General Re Corp and a former executive of American International Group were convicted in February of conspiracy, securities fraud, mail fraud and making false statements to the Securities and Exchange Commission. They await sentencing.
The prosecution filed court papers on Friday citing a study by its expert, concluding the fraud-related losses to AIG shareholders totaled US$1.2 billion to US$1.4 billion. Another methodology from the expert put the losses at around US$543 million to US$598 million, but prosecutors said either method is reasonable.
The defendants are challenging the estimate, which could affect the length of their sentences. The defendants, all of whom await sentencing, are Christopher Garand, Ronald Ferguson, Elizabeth Monrad, Robert Graham, and Christian Milton.
Ferguson said in court papers last week he anticipated the government will advocate a loss amount that leads to a recommendation for life in prison. But prosecutors made no such recommendation, simply concluding that the defendants should receive a “substantial” prison sentence.
A report by the probation department recommends sentences of 14 to more than 17 years for each defendant.
In a separate set of court papers filed on Friday, Garand argued that prosecutors failed to show there was any loss caused by the deal that led to the charges.
Milton also filed court papers on Friday, saying he was not personally enriched by the scheme as defendants were in other recent corporate scandals.