Jurors heard from Assistant U.S. Attorney Eric Glover that the evidence in the case, which included dozens of e-mails, recorded phone conversations and testimony from two cooperating witnesses, hows that the five engineered a loss portfolio reinsurance deal that allowed AIG to inflate its loss reserves by $500 million in 2000 and 2001.
The deal appeared to transfer risk, but the defendants agreed that AIG would not be billed for losses and would secretly refund Gen Re’s $10 million premium and pay Gen Re a $5 million fee, prosecutors allege.
“That’s how you know AIG was not reinsuring General Re for anything: They were paying Gen Re $5 million,” Mr. Glover told the jury. “It was paid to Gen Re so that AIG could add zeros to its balance sheet.”