Former Gen Re executive Garand sentenced to one year

 

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4 March 2009 Wednesday 02:35 PM EST

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Former Gen Re executive Garand sentenced to one year

Chad Hemenway

HARTFORD, Conn.



The third of five former insurance executives convicted about a year ago to securities fraud as part of a sham reinsurance deal was sentenced to serve time in federal prison.

Christopher P. Garand, former General Reinsurance Corp. Senior Vice President and Chief underwriter, was sentenced in District Court of the United States in Hartford, Connecticut for a year and a day in prison and a $ 150,000 fine for his role in a transaction involved a loss portfolio transfer that prosecutors said allowed American International Group Inc to book $ 500 million loss reserves during the fourth quarter 2000 and first quarter of 2001, without assuming any real risk.

Garand was convicted of 10 counts related to the transaction while the simulated co-defendants - Ronald Ferguson, Elizabeth Monrad, Robert Graham, and Christian Milton - were convicted of 16 counts.

Ferguson, former CEO of Gen Re, was sentenced on 16 December to two years in prison plus two years probation and fined $ 200,000. Ferguson is on bail while he appealed the sentence and conviction. Milton was the second group to be sentenced. Former Vice President AIG was given four years in prison and was ordered to pay $ 200,000 for his role in the comedy of finite reinsurance deal (BestWire, Jan. 27, 2009).

So far, the sentences imposed by Judge Christopher F. Droney have deviated from the sentencing guidelines. The three leaders were sentenced to spend many years in prison. The U.S. Attorney's Office has filed documents indicating he may appeal against the sentence Ferguson (BestWire, 23 January 2009).

Since he was convicted, Garand shared personal life stories with the court. He told the judge his suicidal mother and father's verbal abuse and other personal struggles such as the sudden loss of his wife at the age of 39 and the near loss of his second wife, because of cerebral aneurysms (BestWire, Oct. 6, 2008).
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Monrad, former chief financial officer of Gen Re, is scheduled to be sentenced April 2. Graham, former Assistant General Counsel at General Reinsurance Corp., is to be sentenced April 30.

Mark H. Allenbaugh, former Staff Attorney U.S. Sentencing Guidelines Commission, said in December BestWire co-defendants have been relieved when a federal judge deviated from the sentencing provide guidelines Ferguson two years in prison. Ferguson was to spend the rest of his life in prison. The judge, Allenbaugh said, would probably take into account what is called "inter-defendant disparity." Because Ferguson, the greater visibility of Defense, received two years, it is unlikely that any of the other defendants are much more or less Allenbaugh said (BestWire, Dec. 18, 2008).

General Reinsurance Corp., a member of the Berkshire Hathaway Insurance, currently has a Best's financial strength rating of A + + (Superior).

(By Chad Hemenway, associate editor, BestWeek: Chad.Hemenway @ ambest.com)

5 March 2009

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