White collar prosecutions are inevitable in the next phase of the crisis, and as we’ve suggested, AIG may prove fertile ground for investigators. In the past, top execs at fallen firms have faced some medieval sentences. Jeff Skilling of Enron got a 24 year sentance. Timothy Regas of Adelphia got 20 years. Dennis Kozlowski of Tyco got a relatively light 8 years.
But those all might look easy compared to what prosecutors are now looking for.
Prosecutors are hoping to throw the former senior council of General Re, Robert Graham, in jail for 230 years. Let it sink in 230 years. Fortunately for the 60-year old Graham, it looks like his actual sentance will be in the range of 12-17 years, according to Tom Kirkendall. As a refresher, Graham was involved in an alleged sham insurance deal between General Re and AIG, which ultimately led to the ouster of Hank Greenberg from the fallen insurer.
AmLawDaily has more:
The government arrived at the severe prison terms by using a formula in the federal sentencing guidelines which provides for steeper penalties as the amount of loss and number of victims rises. Prosecutors argue that the defendants deserve heavy sentences because more than 250 AIG investors lost at least $544 million from the fake deal with Gen Re. The defendants have countered with an expert who maintains that there was zero loss and no victims.
Note that all of this was before the utter wipeout of AIG. For those at the helm of these firms during the decline, this is some chilling stuff.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.