Former General Reinsurance executive Christopher P. Garand has been sentenced to serve a year and a day in prison following his conviction for being involved in a scheme to manipulate American International Group's financial statement.

In addition to his prison term, the former Gen Re senior vice president and assistant general counsel also was sentenced to serve two years of supervised release and pay a $150,000 fine by Federal District Court Judge Christopher F. Droney, sitting in Hartford, Conn. Mr. Garand had faced a maximum prison term of 150 years and a fine of up to $29.5 million.

Mr. Garand, along with four others, was convicted in February 2008 of 16 counts that included conspiracy, securities fraud, making false statements to the Securities and Exchange Commission, and mail fraud.

The five were convicted of a scheme between Gen Re and AIG to inflate AIG's earnings with two sham finite reinsurance transactions. The deal increased AIG's loss reserves by $250 million in the fourth quarter of 2000 and $250 million in the first quarter of 2001, masking reserve declines.

After investigators uncovered the activity, AIG restated its earnings, costing shareholders more than $500 million.

Among others convicted in the scam.

o Christian Milton, formerly vice president of reinsurance for AIG, and the only AIG executive found guilty in the scheme, received the harshest sentence so far--four years in prison, two years probation and a $200,000 fine.

o Ronald E. Ferguson, Gen Re's former chief executive officer, received two years in prison, two years probation and a $200,000 fine.

o Elizabeth Monrad, Gen Re's former chief financial officer, and Robert Graham, a former Gen Re senior vice president and assistant general counsel, have yet to be sentenced.

Special Reports /

Ex-Gen Re Executive Garand Gets Prison Time

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