General Reinsurance loaned American International Group $500 million to increase its loss reserves and improve its standing with investors, but then disguised the deal as a sham reinsurance transaction to hide it from both the investment community and government regulators, prosecutors charged last week in the opening arguments of a long-anticipated federal trial on charges tarnishing the reputation of two heavyweight carriers.

Four former executives from Gen Re and one from AIG were accused in Hartford's U.S. District Court for the District of Connecticut of using a bogus finite reinsurance deal to puff up AIG's reserves and financial results.

The five executives (see infographic) are charged in a 16-count federal indictment with violation of federal securities law, securities fraud, mail fraud, and making false statements to the U.S. Securities and Exchange Commission.

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