Former Gen Re CFO Monrad Sentenced to 18 Months in Prison

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April 2, 2009 Thursday 01:41 PM EST

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Former Gen Re CFO Monrad Sentenced to 18 Months in Prison

Chad Hemenway

HARTFORD, Conn.

Elizabeth Monrad, former chief financial officer of General Reinsurance Corp., was sentenced to 18 months in prison on charges related to a sham finite reinsurance transaction between Gen Re and American International Group Inc.

Monrad was convicted in February 2008 along with former Gen Re chief executive Ronald Ferguson, Christian Milton, Christopher Garand and Robert Graham on charges of conspiracy, securities fraud, making false statements to the U.S. Securities and Exchange Commission and mail fraud.

Monrad had her sentencing date changed twice before finally facing Judge Christopher F. Droney in Hartford, Conn. to hear her term. Following her prison stay, Monrad will have three years of supervised released. She was also ordered to pay a $250,000 fine.

Ferguson was sentenced on Dec. 16 to two years in prison plus two years supervised release and a $200,000 fine after being found guilty on 16 counts. Attorneys for Ferguson have notified the court that they plan to appeal Ferguson's conviction and sentence, according to court documents. He remains free during the appeal process.

Late in January, Milton was the second of the group to be sentenced. The former AIG vice president was given four years in jail and was ordered to pay $200,000 for his role in the sham finite reinsurance deal. Garand, former Gen Re senior vice president and chief underwriter, was sentenced in March to a year and one day in prison and a $150,000 fine for his role in the transaction (BestWire, March 4, 2009).

The sentences have been far below the amount of years each executive could have been given in prison, according to federal sentencing guidelines. Ferguson could have spent the rest of his life behind bars. The U.S. Attorney's Office filed court papers indicating it could appeal Ferguson's sentence (BestWire, Jan. 23, 2009).

Milton's attorneys have filed a motion asking for Milton's release while he appeals his sentence, according to court records, which also shows Milton already paid his fine. The government had filed a motion in opposition to Milton's release but has since withdrawn it. Milton is scheduled to surrender on April 29. Garand has been released pending his appeal as the government filed to possibly appeal his sentence.

Graham, former assistant general counsel at General Reinsurance Corp., is to be sentenced in federal court in Hartford, Conn., on April 30.

General Reinsurance Corp., a member of the Berkshire Hathaway Insurance Group, currently has a Best's Financial Strength Rating of A++ (Superior).

(By Chad Hemenway, associate editor, BestWeek: [email protected])

April 3, 2009