A spokesman for the Connecticut U.S. Attorney's Office saidtoday that the government seeks “substantial” prison time, but nota life term for the former chief executive office of GeneralReinsurance, Ronald E. Ferguson.

Mr. Ferguson was convicted in February with three other GeneralRe. Corp. executives and one from American International Group fora variety of conspiracy charges, securities fraud and mail fraud,for participating in a sham reinsurance transaction to artificiallypump up AIG's financial picture.

Tom Carson, with the U.S. Attorney's office, said the statutorymaximum sentence for Mr. Ferguson, Gen Re's former chief financialofficer, Elizabeth Monrad, Robert Graham, a former Gen Re seniorvice president, and Christopher Milton, former AIG senior vicepresident, was 210 years for 16 counts.

For Christopher Garand, a former Gen Re senior vice presidentfor finite reinsurance, the maximum would be 150 years on 10counts.

Lawyers for Mr. Garand suggested in court papers that thegovernment was seeking what amounted to a life term by asking formore than the recommendation in a pre-sentence report from U.S.probation officials.

After calculating the impact of various enhancements for variousacts by the defendants, the report recommended a “sentencingguidelines range of 168-to-210 months of imprisonment” for allfive, according papers filed by prosecutors.

In addition to arguing that significant prison time for theirclients is unwarranted, defense lawyers have filed papers arguingthat “restitution is neither required nor warranted.” The acts ofthe defendants, they argue, resulted in “no statisticallysignificant decline in AIG's stock price…”

Meanwhile, the government contends that AIG gained $495 millionas a result of the offenses committed by the executives and theloss to stockholders exceeded $400 million.

Lawyers for both sides are due to speak by conference calltomorrow with U.S. District Judge Christopher Droney, who willsentence the group. The talk with the judge is to go over issues tobe discussed at a hearing in advance of sentencing on Sept. 25.

On Monday, Mr. Ferguson's attorneys asked the court to sealvarious portions of the sentencing memorandum they submitted,citing legal precedents for keeping secret “personal matters”related to a defendant.

Ms. Monrad's lawyers submitted papers seeking a sentence ofsix-to-12-months, citing her “exemplary life,” integrity inbusiness, devotion to family and contributions to her church andcommunity.