Former Top Lawyer Faces Life in Jail for Phony Deal

March 26, 2008 Robert Graham, a former staff lawyer at General Re Corp., could spend the rest of his life in jail for helping another company commit fraud. On Feb. 25 a federal jury convicted Graham and four other defendants for aiding a sham deal at American International Group Inc.

A subsidiary of Berkshire Hathaway Inc. (Warren Buffett's holding company), Gen Re sells reinsurance -- in essence, insurance for insurance companies. New York-based AIG, the world's largest insurer, is a frequent customer. But in 2000 the two businesses concocted a fake transaction to make it appear as though Gen Re was buying reinsurance from AIG. According to federal prosecutors, AIG needed the fraudulent deal to make Wall Street think that it was in better financial shape than it really was.

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