Five found guilty of accounting scam

Five co-defendants were found guilty of doctoring the books to inflate the share value of insurance giant AIG, it was reported Tuesday.

Prosecutors said fraudulent transactions in 2000 and 2001 added $500 million to AIG's reserve fund.

The co-defendants at the trial in Hartford, Conn., included four former executives at General Re and Christian Milton, AIG's former director of reinsurance.

After six days of deliberations, the defendants were found guilty of 16 counts, including conspiracy, securities fraud and lying to the Securities Exchange Commission, The New York Times reported.

Former General Re executives Ronald E. Ferguson, Elizabeth A. Mondrad and Robert Graham and Milton face prison sentences and fines of $46 million, the report said. Former General Re Senior Vice President Christopher P. Garand faces a fine of $29 million.

AIG has agreed to pay $1.6 billion to settle charges against it but analysts question whether AIG's former Chief Executive Maurice R. Greenberg would be implicated further.

Mr. Greenberg acted responsibly, ethically and legally during his career at AIG, his attorney Nicholas Gravante told the Times.

But defense lawyers and prosecutors both claimed Greenberg initiated the fraudulent transactions.

Copyright 2008 by United Press International