NU Online News Service, April 2, 2:59 p.m. EST
Elizabeth A. Monrad, the former chief financial officer for Gen Re, was sentenced today to 18 months in federal prison for her role in a sham insurance scheme involving American International Group.
U.S. District Court Judge Christopher F. Droney in Hartford, Conn., in addition to the prison term, sentenced Ms. Monrad to three years probation and fined her $250,000.
Ms. Monrad was found guilty in February of last year of conspiracy, securities fraud, making false statements to the U.S. Securities and Exchange Commission and mail fraud.
Ms. Monrad and four others were convicted of creating two shame insurance deals that were created to inflate AIG's earnings.
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 declines in loss reserves. An investigation forced AIG to restate its earnings in 2005, costing shareholders more than $500 million.
Ms. Monrad was the fourth defendant to be sentenced in the case.
The other defendants included Ronald E. Ferguson, Gen Re's former chief executive officer; Robert D. Graham, formerly Gen Re senior vice president and assistant general counsel, and Christian M. Milton, a vice president of reinsurance at AIG.
Mr. Ferguson was sentenced to two years in prison and fined $200,000. Mr. Milton was sentenced to four years in prison and fined $200,000. Mr. Garand received a year and a day in prison and fined $150,000.
Mr. Graham is due for sentencing at the end of the month.
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