Ex-CEO of GenRe unit gets probation in fraud scheme

LOS ANGELES, June 16 (Reuters) - A former General Re Corp executive who helped convict five former colleagues was sentenced on Tuesday to probation for his role in a scheme to mislead investors about American International Group Inc's (AIG.N) financial health, prosecutors in Connecticut said.

U.S. District Judge Christopher Droney sentenced John Houldsworth, 50, of Dublin, Ireland to two years' probation and ordered him to pay a $5,000 fine and perform 400 hours of community service.

Houldsworth, 50, pleaded guilty on June 9 to one count of conspiring to commit securities fraud. He gave "extraordinary assistance" in the investigation and prosecution of his five co-conspirators, including testifying at their trial, prosecutors said.

The five other executives at Berkshire Hathaway Inc's (BRKa.N) General Re unit were found guilty of all charges against them last year and were sentenced to prison terms.

Houldsworth, the former CEO of Gen Re subsidiary Cologne Re Dublin, helped Gen Re executives structure a sham reinsurance transaction that allowed its client, AIG, to appear to boost its loss reserves by $500 million in 2000 and 2001, prosecutors said. AIG restated the transactions in 2005.

AIG acknowledged accounting improprieties and restated $3.9 billion in earnings from 2000 through 2004, and agreed to a $1.64 billion regulatory settlement in 2006.

In February, General Re agreed to pay $72 million to settle investor claims about its role in a fraudulent transaction involving AIG. (Reporting by Gina Keating; Editing by Phil Berlowitz)