Corporate Liability Blog

Execs In $500 Million Scam Receive Very Short Sentences

  • 05/05/09
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A former executive at General Re Corp, who was deeply involved in a reinsurance scam that cost American International Group (AIG) shareholders $500 million, was sentenced on May 4, 2009 to 1 year in prison.  Robert Graham, the defendant, was the the associate general counsel at Gen Re – an attorney.  He helped to draft the documents that made the fraud possible.  Other Gen Re executives convicted of participating in the fraud after a jury trial received sentences in the range of 1 to 4 years.  It is unfortunate when the high and mighty are treated leniently while the lowly are severely punished.

Compare this with the case Angela Thompson of New York, a 17 year old who sold 2 ounces of cocaine to an undercover police officer in the presence of her uncle.  Her sentence, of not less than 15 years to not more than 25 years, was upheld on appeal.  Although this case fell under state law, defendants arrested with even smaller amounts of crack cocaine routinely receive sentences of 5, 10 or even 20 years in prison in our federal courts.

Many workers and retirees have recently seen their retirement accounts decline by 40 to 50%, largely as a result of corporate crime and other misconduct.  Although we cannot allow street crime to proliferate, for most Americans, massive corporate crime is a greater threat than petty street crime.  For most people, its not the crime in the streets, its the crime in the corporate suites.

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