HARTFORD, Conn.--A government witness in the trial of five insurance executives accused of illegal moves to improve American International Group's financial picture said today that one of them had advised him to take steps to limit who knew about their activity.

Richard Napier, a former General Re senior vice president and key prosecution witness, told a jury today in federal court here that he'd received an e-mail from defendant Ronald E. Ferguson, former chief executive of Gen Re, in early 2001.

The e-mail said, in part, "let's keep the circle of people involved as tight as possible."

The e-mail, which Mr. Napier read aloud, was part of series of communications between Mr. Napier and Mr. Ferguson, which Mr. Napier testified to during questioning by Assistant U.S. Attorney Raymond Patricco.

Mr. Napier pled guilty to participation in a scheme that the government says involved a sham finite reinsurance transaction between AIG and General Re, designed to improve AIG's reserve picture and bolster its stock.

On trial with Mr. Ferguson are:

o Elizabeth Monrad, of New Canaan, Conn., Gen Re's former chief financial officer.

o Robert Graham, of Westport, Conn., former Gen Re senior vice president and assistant general counsel.

o Christopher Garand, of Upper Saddle River, N.J., formerly a Gen Re senior vice president, and the 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.

o Christian Milton, of Winnewood, Pa., formerly AIG's vice president of reinsurance.

In a later e-mail, Mr. Napier testified, after he had prepared a briefing package for Mr. Ferguson for a meeting with Maurice R. Greenberg--AIG's former chief executive--Mr. Ferguson wrote, "Thank you for your stewardship of this important account."

Reading from the same e-mail, Mr. Napier said, Mr. Ferguson also wrote that Mr. Greenberg "trusts me and for some strange reason, likes me."

Mr. Napier gave short, crisp answers, looking directly at Mr. Patricco as he was questioned. He first gave testimony last Thursday, and resumed today after a court recess. He is due to undergo cross-examination tomorrow.

In 2005, as part of a plea deal with the government, Mr. Napier pled guilty to conspiracy to falsify SEC filings. Defense attorneys have pictured him as unreliable--a description they will try to make him fit during their cross-examination.

Special Reports /

Ferguson Wanted AIG Deal Kept Quiet, Witness Says

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