A former General Reinsurance senior vice president who confessed to a role in a plot to manipulate American International Group financial statements will be one of the first prosecution witnesses in the trial of five others charged in the scheme, the government said today.
The media advisory, from the U.S. Attorney's Office in Hartford, Conn., said it would call Richard Napier, who in 2005 pleaded guilty to conspiracy to falsify SEC filings in the AIG case.
Also due to appear as one of the government's first three witnesses are Charlene Hamrah, director of investor relations for AIG, and stock analyst Alice Schroeder.
Opening arguments and testimony at the trial of four former Gen Re executives and a former AIG executive is due to get underway Monday in Hartford federal court before U.S. District Judge Christopher F. Droney.
Facing charges are:
o Ronald E. Ferguson, 63, of Fairfield, Conn., formerly Gen Re's chief executive officer.
o Elizabeth Monrad, 51, of New Canaan, Conn., former Gen Re's chief financial officer.
o Christian Milton, 58, of Winnewood, Pa., formerly AIG's vice president of reinsurance.
o Robert Graham, 58, of Westport, Conn., former Gen Re senior vice president and assistant general counsel.
o Christopher Garand, 59, of Upper Saddle River, N.J., formerly a Gen Re senior vice president and the head and chief underwriter of Gen Re's finite reinsurance operations in the United States. He was also a member of the board of directors of Cologne Re Dublin, a Gen Re entity.
The five are facing various charges–including securities fraud, mail fraud and conspiracy–in a scheme to make it appear as though AIG increased its loss reserves, which the U.S. Attorney's Office called “a key financial indicator to analysts and investors.”
At issue are two allegedly sham reinsurance transactions between subsidiaries of AIG and Gen Re that were initiated by an AIG senior executive to quell criticism by analysts of an approximate $59 million reduction in AIG's loss reserves in the third quarter of 2000.
Gen Re is a subsidiary of billionaire investor Warren Buffet's Berkshire Hathaway. Mr. Buffet has been listed as a possible government witness, but according to some reports he will not be called.
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