Former General Re chief faces jail term

THE former chief executive of General Re in Ireland pleaded guilty yesterday to helping its top customer, American International Group (AIG), concoct a sham transaction that made AIG’s finances appear better than they were.

John Houldsworth, 46, of Dublin, who was chief executive of Cologne Re Dublin, a General Re unit, from May 1990 to June 2001, admitted in federal court his role in creating a phoney deal that made it appear AIG had boosted its loss reserves by $500 million in late 2000 and early 2001.

As part of a plea bargain for the criminal conspiracy charge, Mr Houldsworth has agreed to co-operate in the Justice Department’s investigation of the companies. Prosecutor Thomas Hanusik said Mr Houldsworth has already met with investigators four times, and more meetings are expected.