HARTFORD, Connecticut (AP) — Five former insurance company executives were found guilty yesterday of a scheme to manipulate the financial statements of the world's largest insurance company, American International Group Inc.

The defendants, including four former executives including a one-time CEO of General Re Corp., and a former executive of AIG, sat stone-faced as they were convicted of conspiracy, securities fraud, mail fraud and making false statements to the Securities and Exchange Commission.

Prosecutors said they participated in a scheme in which AIG paid Gen Re as part of a secret side agreement to take out reinsurance policies with AIG in 2000 and 2001, propping up its stock price and inflating reserves by $500 million.

"The case sends the message to executives that their decisions will be scrutinised ... and these types of offences aren't just speeding tickets that you can pay," prosecutor Paul Pelletier told reporters after the verdict was read.

The verdict came in the seventh day of jury deliberations following a month-long trial in federal court in Hartford.

The defendants were former General Re CEO Ronald Ferguson; former General Re senior vice-president Christopher Garand; former General Re chief financial officer Elizabeth Monrad; and Robert Graham, a General Re senior vice-president and assistant general counsel from about 1986 through October 2005.

Also charged was Christian Milton, AIG's vice-president of reinsurance from about April 1982 until March 2005.

Ferguson, Monrad, Milton and Graham each face up to 230 years in prison and a fine of up to $46 million. Garand faces up to 160 years in prison and a fine of up to $29.5 million.

Each declined to comment when they left the courtroom. They remained free on $1 million bond and are to be sentenced May 15.