Robert Graham, the former assistant general counsel of General Re Corporation who was convicted in a fake reinsurance deal, is hoping to avoid prison by arguing on appeal that his general counsel knew all about the sham but wasn’t allowed to testify at Graham’s trial.

Graham and four other executives were convicted in February of 2008 in federal court in Hartford, Conn. Prosecutors said the group created a fake insurance deal between Gen Re and American International Group, Inc., in order to add $500 million in reserves to AIG’s bottom-line.

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