Wednesday, January 28, 2009

AIG Executive Sentenced to Prison

By Shu Zheng

A former vice president at American International Group Inc. was sentenced to four years in prison for defrauding shareholders, avoiding a possible life term.

Christian Milton, 61, was convicted Feb. 25 with four former executives of General Reinsurance Corp. of using a sham transaction in 2000 to help AIG improve its balance sheet. The judge could have given Milton a life sentence after ruling that the fraud cost AIG shareholders as much as $597 million.

Milton asked U.S. District Judge Christopher Droney for a “minimal” term, citing his good work in the community. Droney said that while life in prison would be too severe, the sentence must deter other executives, and that Milton’s conduct showed a “stark lack of honesty and respect” for investors.

by Jane Mills and David Voreacos (Bloomberg)

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