Prosecutors Seeking Substantial Time For Ferguson

A spokesman for the Connecticut U.S. Attorney's Office said today that the government seeks “substantial” prison time, but not a life term for the former chief executive office of General Reinsurance, Ronald E. Ferguson.

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

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

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

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

After calculating the impact of various enhancements for various acts by the defendants, the report recommended a “sentencing guidelines range of 168-to-210 months of imprisonment” for all five, according papers filed by prosecutors.

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

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

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

On Monday, Mr. Ferguson's attorneys asked the court to seal various 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 of six-to-12-months, citing her “exemplary life,” integrity in business, devotion to family and contributions to her church and community.