Sunday, September 14, 2008
The defendants found guilty following a reinsurance contract between AIG and General Re, contracts that the the government argued made it appear that (1) "General Re had transferred approximately $100 million in insurance risk ... to AIG when in fact, no real insurance risk had been transferred; (2) General Re was Paying AIG $10 million in cash 'premiums' when, in fact, General Re never would be out on the transaction; and (3) General Re had offered the transaction to AIG when, in fact AIG offered the transaction to General Re." Sham deals and side-deals form the basis of the criminality alleged by the government. And with convictions in hand, the government is moving to sentencing.
The government has filed its sentencing memo and so too the defendants. The ball now rests with the judge. The disparity is great - with one side focusing on the offender loss and computing numbers and another looking at a first offender with a truly stellar life record. It is fascinating to see in the government's sentencing memo, the admission that there can be more than one way to compute the loss. The government presents two different ways. Should a sentence for a crime be based on mathematical calculations that by the government's own admission are subject to multiple approaches? The real showdown here is with the U.S. Sentencing guidelines.
Government's Sentencing Memo - Download us_sentencing_memo.pdf
See also Douglas McLeod, Sentencing Fight Looms in Finite Case