Former Gen Re, AIG execs plead not guilty

ALEXANDRIA, Va.—General Re Corp. Chief Executive Officer Ronald Ferguson, other former Gen Re officers and a former American International Group Inc. executive all have pleaded not guilty to charges stemming from their alleged involvement in a 2000 loss-portfolio transaction that has been the subject of regulatory probes.

Mr. Ferguson, former Gen Re Chief Financial Officer Elizabeth Monrad, former Gen Re Assistant General Counsel Robert Graham and former AIG Vp-reinsurance Christian Milton all entered not-guilty pleas to charges that they conspired to commit fraud in connection with the transaction. The pleas were heard at their arraignments Thursday morning in U.S. District Court in Alexandria, Va.

All four on Feb. 2 were charged with one count of conspiracy, four counts of securities fraud, two counts of making false statements to the U.S. Securities and Exchange Commission, four counts of wire fraud and two counts of mail fraud.

The four individuals have posted personal recognizance bonds of $1 million. Trial has been set for May 22.

Announcing the charges earlier this month, Assistant Attorney General Alice Fisher said that, according to the indictment, the defendants "arranged a complex scheme to cook the books at AIG."

AIG last year conceded that the deal, a retrocessional loss-portfolio transaction, did not transfer risk and restated its results to account for the deal as a deposit rather than as reinsurance. Last week, the New York-based insurer paid $1.64 billion to settle civil charges—including those relating to the transaction—with the SEC, New York Attorney General Eliot Spitzer and New York Insurance Superintendent Howard Mills.

Messrs. Ferguson, Graham and Milton and Ms. Monrad also face a civil suit from the SEC charging them with aiding and abetting securities fraud. Also charged in that suit is Christopher Garand, a retired senior vp of Gen Re.

Mr. Ferguson retired as CEO of Stamford, Conn.-based Gen Re in 2001, and Ms. Monrad left the reinsurer in 2003 to become CFO of New York-based TIAA-CREF, from which she resigned in November 2005. Mr. Graham retired from Gen Re in October 2005.

New York-based AIG terminated Mr. Milton last March.

Two other former Gen Re officials—John Houldsworth, former CEO of the reinsurer's Cologne Re Dublin unit; and Richard Napier, a former senior vp—pleaded guilty to criminal conspiracy charges related to the investigation in June 2005.

No other AIG officials have faced criminal charges stemming from the probe.