Defendant in General Reinsurance, AIG Fraud Faces Sentencing

April 28, 2009

A former General Re senior vice president faces sentencing for his role in an accounting fraud scandal that artificially inflated the stock price of insurer American International Group Inc.

Robert Graham is scheduled to be sentenced Thursday in federal court in Hartford. He is the last of five defendants to be sentenced.

Federal prosecutors say New York-based AIG paid Stamford-based Gen Re in a secret deal to take out reinsurance policies with AIG in 2000 and 2001.

They say the scheme propped up AIG’s stock prices and inflated reserves by $500 million with the goal of quelling criticism by analysts and easing concerns by investors.

The other defendants received prison sentences ranging from one to four years.

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