HARTFORD, CONN.–The defense for an executive accused of helping American International Group with an accounting fraud in 2000 sought unsuccessfully to secure a mistrial today.

Attorney Jonathan Rich, representing Christopher Garand, former senior vice president in charge of U.S. finite underwriting for General Reinsurance, made a motion for mistrial after the jury in U.S. District Court here heard his client on tape discussing how much false accounting activity AIG might be involved in.

Mr. Garand is on trial with four other executives accused of participating in a finite reinsurance deal between AIG and Gen Re subsidiary Cologne Re that inflated AIG loss reserve by $500 million in the final quarter of 2000 and the first quarter of 2001.

His codefendants are Ronald Ferguson, former Gen Re chief executive officer; Robert Graham, former Gen Re senior vice president and counsel; and Christian Milton, former AIG vice president for reinsurance.

During testimony by government witness John Houldsworth, former Cologne Re Dublin CEO, who has pleaded guilty to charges in the case, prosecutors played a tape of Mr. Houldsworth inquiring of Mr. Garand, “How much cooking goes on” at AIG? The response, “They are fairly aggressive. They'll do whatever they need to make the numbers look right.”

The dialogue in question had been previously disclosed in a prosecutors' information that was filed at the time of Mr. Houldsworth's guilty plea in 2005. He has yet to be sentenced.

Mr. Garand's attorney asked for a mistrial on the grounds that playing of the tape was unfairly prejudicial to his client.

Judge Christopher Droney denied the motion but agreed to instruct the jury to disregard other material on the tape that dealt with a conversation concerning another suspect deal that AIG was involved in.

Mr. Houldsworth, who has been on the stand for three days, is due to undergo cross examination on Monday.

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