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Christian Milton, a former vice president of American International Group convicted last year in connection with a scheme to manipulate the company’s financial statement through a finite reinsurance deal with General Re Corp., was sentenced today to four years in prison.
Mr. Milton, who was found guilty of conspiracy, securities fraud, false statements to the Securities and Exchange Commission, and mail fraud, was sentenced to serve four years on each count by Federal District Court Judge Christopher F. Droney sitting in Hartford, Conn. The sentence is to run concurrently, according to a spokesman for the U.S. Attorney’s Office.
In addition to the four years in prison, Mr. Milton was sentenced to serve two years of supervised release and pay a fine of $200,000.
Mr. Milton was one of five executive convicted in connection with a scheme between General Re Corp. and AIG to inflate AIG’s earnings with two sham reinsurance transactions. The deal increased AIG’s loss reserves by $250 million in the fourth quarter of 2000 and $250 million in the first quarter of 2001, masking declines in loss reserves.
After investigators uncovered the activity AIG restated its earnings, costing shareholders more than $500 million.
Mr. Milton was the only AIG executive convicted in the scheme. The remaining four were Ronald E. Ferguson, Gen Re’s chief executive officer at the time of the deal; Elizabeth Monrad, Gen Re’s chief financial officer; Robert Graham, a Gen Re senior vice president and assistant general counsel; and Christopher P. Garand, Gen Re senior vice president and chief underwriter of finite reinsurance operations.
In December, Judge Droney sentenced Mr. Ferguson to two years in prison, two years of supervised service and a $200,000 fine. Sentence is pending for the others.