A Westport man who formerly served on two town boards was among four former insurance executives indicted today on charges of fraud and conspiracy, the Justice Department announced.
Robert D. Graham, 57, was one three former executives at Berkshire Hathaway’s Stamford-based General Re insurance unit indicted by a grand jury in Norfolk, Va., along with a former American International Group executive, department officials said.
Graham, a former General Re senior vice president and assistant general counsel, served as a Republican member of the Westport Planning and Zoning Commission from 1995 to 1999 and was on the Board of Finance from 1999 to 2003.
Alan Vinegrad, attorney for Graham, said his client “is an attorney of the highest integrity … He looks forward to having his day in court and expects to be vindicated at trial,” Reuters reported.
The indictment, returned Wednesday, charged the former executives with conspiring to make AIG’s finances appear better than they were.
In addition to Graham, those charged included: Ronald Ferguson, who was General Re’s chief executive; Elizabeth Monrad, the former chief financial officer; and Christian Milton, who ran AIG’s reinsurance division.
The defendants put together a bogus reinsurance transaction that allowed AIG to fraudulently report about $500 million in loss reserves “to mislead AIG’s shareholders, stock market analysts and the investing public,” the indictment said.
The conspiracy was designed to make it appear AIG’s loss reserves were growing in order to pump up the price of AIG stock, according to the indictment.
Justice Department officials said each of the defendants could face a maximum penalty, if convicted on all the criminal charges, of 95 years in prison and a $7.75 million fine.
An arraignment and initial court appearance was set for Feb. 16 in U.S. District Court in Alexandria, Va.
