Former General Re CFO Monrad Sentenced to 18 Months in Prison

April 2, 2009

The former chief financial officer at a unit of Berkshire Hathaway Inc. was sentenced to 18 months in prison Thursday for her role in a scheme to manipulate American International Group Inc.’s financial statements.

Elizabeth Monrad, who was finance chief for General Re Corp. from 2000 to 2003, was one of five defendants found guilty last year of conspiracy and fraud in the case.

Her sentence was handed down by U.S. District Judge Christopher Droney in Hartford, Connecticut, according to a statement from federal prosecutors.

Monrad, 54, of New Canaan, Connecticut, was also ordered to pay a $250,000 fine.

A lawyer for Monrad could not be reached immediately for comment.

Prosecutors said Monrad and the others harmed AIG shareholders through sham transactions that allowed the insurer to improperly boost loss reserves by $500 million in 2000 and 2001. AIG restated the transactions in 2005.

AIG acknowledged accounting improprieties and restated $3.9 billion in earnings from 2000 through 2004 and agreed to a $1.64 billion regulatory settlement in 2006.

The matter led to the 2005 ouster of AIG’s longtime chief executive, Maurice “Hank” Greenberg, who is an unindicted co-conspirator in the government’s case. Greenberg has denied wrongdoing.

The Gen Re case is unrelated to AIG’s current financial distress. The company posted a record $61.7 billion quarterly loss last month and has received nearly $180 billion in government aid to date.

Monrad is the fourth defendant in the case to be sentenced. Christian Milton, a former AIG vice president of reinsurance, was sentenced in January to four years in prison, while former General Re CEO Ronald Ferguson was sentenced in December to two years in prison. Another General Re insurance executive, Christopher Garand, was sentenced to one year last month.

(Reporting by Lilla Zuill in New York; Editing by Andre Grenon and Jeffrey Benkoe)

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