January 27, 2009 / 7:27 PM / 11 years ago

Ex-AIG exec Milton sentenced to four years in prison

NEW YORK (Reuters) - Christian Milton, a former executive at American International Group Inc was sentenced to four years in prison on Tuesday for his role in a reinsurance deal that prosecutors said misled AIG investors, according to a court official.

The logo of American International Group (AIG) is seen at their offices in New York September 18, 2008. REUTERS/Eric Thayer

Milton was also ordered to pay a $200,000 fine in U.S. District Court in Hartford, Connecticut. According to sentencing guidelines, U.S. District Judge Christopher Droney could have sentenced Milton to as much as 210 years in prison.

Milton, a former AIG vice president of reinsurance, and four former executives at Berkshire Hathaway Inc’s General Re Corp business were found guilty last year of conspiracy and fraud.

At the center of the case was a finite reinsurance transaction sold by General Re that prosecutors said allowed AIG to improperly boost its loss reserves by $500 million in 2000 and 2001. The use of finite reinsurance, often misused to smooth financial results, has largely ended.

Milton is currently scheduled to report to federal prison on March 25, according to a court spokesman, Thomas Carson.

Ronald Ferguson, General Re’s former chief executive, was sentenced to two years in prison last month in the same case.

Milton currently works for C.V. Starr, a New York-based insurance and investment firm run by Maurice “Hank” Greenberg, a former AIG CEO.

Elizabeth Monrad, General Re’s former chief financial officer, is scheduled to be sentenced on February 12, and Christopher Garand, a former General Re senior vice president and head of finite reinsurance operations in the United States, is expected to be sentenced on March 4.

No date has yet been set for sentencing of Robert Graham, Gen Re’s former general counsel.

Greenberg left AIG in 2005 after Eliot Spitzer, then the New York Attorney General, filed a lawsuit against him and the company, alleging manipulation of financial results, including the General Re case.

AIG paid $1.6 billion to settle the charges in 2006, while Greenberg has denied any wrongdoing and continues to fight civil charges.

Reporting by Lilla Zuill; editing by Jeffrey Benkoe

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