The former assistant general counsel of General Re Corp., Robert Graham, was sentenced Thursday to one year and one day in federal prison in a financial fraud case closely watched by in-house counsel nationwide.
Graham, 61, was found guilty last year of conspiracy, securities fraud, mail fraud and making false statements to the U.S. Securities and Exchange Commission. As part of his sentence, he was ordered to pay a $100,000 fine. He had faced a maximum sentence of up to 210 years in prison.
"Certainly, that kind of sentence seems more in line with a liability for a corporate failure than hundreds of years in prison," said Susan Hackett, general counsel for the Association of Corporate Counsel, of the sentence that Graham actually received.
Graham, who was senior vice president and assistant GC at Stamford, Conn.-based General Re from 1986 to 2005, will remain free on bond pending his appeal of his convictions. His lawyer, Alan Vinegrad, had sought a period of home confinement and community service.
"I realize there are no do-overs in life," Graham told U.S. District Judge Christopher Droney in Hartford, Conn. "Nothing I can say or do now can change what has happened or its impact on the lives of others or on me. Your honor, I regret that more than words can adequately express."
Graham, one of several former executives charged in the case, said he was very proud of having developed a reputation for honesty and integrity during his three decades as an attorney.
"That's all gone now," he said. "Instead of my career and reputation as a lawyer serving as a good example to others, as a disgraced and disbarred lawyer they will now serve only as a cautionary tale."
Tom Carson, a spokesman for the U.S. Attorney's Office for the District of Connecticut, which prosecuted the case, and Graham's lawyer, Alan Vinegrad, a partner in the New York office of Washington's Covington & Burling, declined to comment. In court documents, Graham's lawyers had argued for leniency.
"Lawyers across the country are now well aware of Mr. Graham's role in this transaction and the fact that, as a result, he has been convicted of a felony, will lose his license to practice law, and faces tremendous civil penalties," Vinegrad wrote in a Nov. 21 sentencing memorandum. "Mr. Graham is not a high-level executive accused of orchestrating a fraud for his own financial benefit. Rather, his case is more akin to other cases concerning in-house counsel involved in fraud schemes from which they did not personally benefit."
The charges against Graham, who was senior vice president and assistant general counsel of Gen Re, were part of a 16-count indictment involving four other defendants at Gen Re and American International Group Inc.
Prosecutors alleged that the five defendants schemed to inflate AIG's loss reserves, which indicate the financial health of an insurance firm, by creating two sham reinsurance transactions between the companies. AIG was forced to restate the transactions in 2005, causing losses of more than $400 million for hundreds of AIG shareholders.
All five were convicted last year. Graham is the last to be sentenced. On Dec. 16, Ronald Ferguson, Gen Re's former chief executive officer, was sentenced to two years in federal prison and ordered to pay a $200,000 fine. On Jan. 17, Christian Milton, former vice president of reinsurance at AIG, was sentenced to four years in prison and ordered to pay a $200,000 fine. Christopher P. Garand, a former senior vice president at Gen Re, was sentenced on March 4 to a year and one day in prison and ordered to pay a $150,000 fine. And on April 2, Elizabeth Monrad, Gen Re's former chief financial officer, was sentenced to 18 months in prison and ordered to pay a $250,000 fine.
Associated Press reports contributed to this story.