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WASHINGTON - US officials Wednesday announced a $92 million settlement with insurance firm General Re, controlled by investor Warren Buffett, for its role in fraudulent accounting practices, including a scheme to help AIG.
The Securities and Exchange Commission said it sued General Re for accounting schemes involving AIG and another insurance company, Prudential Financial, "to manipulate and falsify their reported financial results."
Gen Re, one of the largest reinsurance firms, agreed to pay $12.2 million to settle the SEC's charges.
In addition, in a non-prosecution agreement announced today by the Department of Justice in connection with a related criminal investigation of Gen Re's transactions with AIG, Gen Re agreed to pay $19.5 million to a US Postal Inspection Service Consumer Fraud Fund.
The company also agreed to pay $60.5 million through a civil class action settlement to AIG's injured shareholders.
Gen Re previously forfeited to the government around $5.0 million in fees it earned for its participation in the scheme with AIG.
According to officials, Gen Re, a reinsurance firm that provides insurance to commercial insurers, arranged to sell financial products to AIG and Prudential "for the sole purpose of enabling those companies to manipulate their accounting results and mislead investors," said SEC regional director Andrew Calamari.
The SEC previously charged AIG with securities fraud and improper accounting, and the company settled the charges by paying more than $800 million.
Separate agreements were reached with former AIG chairman Maurice Greenberg and former chief financial officer Howard Smith.
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