General Re C.E.O. Sentence: 2 Years in Prison

Federal sentencing guidelines suggested he could well spend the rest of his life in a federal prison, but General Re Corp.'s former chief executive was instead ordered to jail for two years and fined $200,000 for his role in the collapse of American International Group.

Ronald Ferguson, 66, was convicted earlier this year of conspiracy and fraud, as well as lying to Securities and Exchange Commission investigators. He was accused of arranging sham reinsurance transactions whose sole purpose was to artificially inflate ailing A.I.G.'s reserves by half a billion dollars.

Three other executives at General Re, which is owned by Warren Buffett's Berkshire Hathaway Corp., also were convicted in February, as was the former head of American International Group Inc.'s reinsurance business, Christian Milton, 61. Milton is scheduled to be sentenced on January 27.

In imposing a relatively light sentence on Ferguson, District Judge Christopher Droney noted Ferguson's age and his intention to become an ordained minister. "This case is a tragedy, especially for Ronald Ferguson," Droney said, according to the Associated Press. "We will never know why such a good man did such a bad thing."

Prosecutors were unmoved. "Our financial system simply cannot function if people behave like Mr. Ferguson and his co-conspirators in this case," said Assistant U.S. Attorney Eric Glover. "Eroding the public trust in this day and age is an incredibly serious issue."

by Mark Stein