LOS ANGELES (Reuters) - U.S. prosecutors on Friday asked a Connecticut judge to sentence five former executives of Berkshire Hathaway Inc’s (BRKa.N) General Re Corp and American Insurance Group Inc to “substantial” prison terms for misleading investors about AIG’s (AIG.N) financial condition.
In a sentencing memorandum filed late on Friday, prosecutors argued that sentences for the five defendants should be stiffer than the range of 168 months to 210 months calculated in a pre-sentence report.
The government also said losses to AIG investors could be estimated at more than $400 million — with the government’s expert calculating fraud-related losses as much as $1.4 billion — a factor that should enhance the defendants’ sentences.
“(T)he Court should sentence the defendants to a substantial period of incarceration,” prosecutors wrote in the memo.
Attorneys for defendants Chris Milton, AIG’s former vice president of reinsurance, and ex-Gen Re senior vice president Christopher Garand pleaded for leniency for their clients in sentencing memos filed on Friday.
The sentencing memos for both men contained testimonials from friends and family members who attested to their good deeds and characters.
“This is who Chris Milton is: a man who sees people in distress and seeks to restore them to dignity,” his attorneys concluded in their memo.
Garand’s lawyers argued that the judge should be lenient because Garand was “a bit player in a transaction conceived of and directed by others,” and that, at age 61, a lengthy prison term would amount to a life sentence.
Sentencing memos were not available for the remaining defendants: Ronald Ferguson, former Gen Re chief executive; Elizabeth Monrad, Gen Re’s former chief financial officer; and Robert Graham, former Gen Re senior vice president and assistant general counsel.
Garand was senior vice president and head of Gen Re’s finite reinsurance operations in the United States.
In February, a federal jury in Hartford, Connecticut, found the five guilty of conspiracy, securities fraud, making false statements to the SEC and mail fraud.
The defendants were convicted in connection with a reinsurance deal that prosecutors said misled AIG investors because it enabled the company to improperly inflate its loss reserves, painting an artificially bright picture of its financial results.
AIG previously acknowledged accounting improprieties and restated $3.8 billion in earnings from 2000 through 2004 and agreed to a $1.64 billion regulatory settlement in 2006.
Editing by Braden Reddall