OUCH, THAT HURT! But Gen Re Fraud Trial Judge Turns Down Mistrial Motion

U.S. District Judge Christopher Droney denied Defendant Christopher Garand’s motion for mistrial Friday in the Gen Re fraud trial, currently taking place in Connecticut. The motion was based on the prejudicial nature of a taped conversation played to the jury. In the conversation, between former Cologne Re Dublin CEO John Houldsworth and then-Gen Re Senior VP Garand, Houldsworth asks Garand “How much cooking goes on there [at AIG]?” Garand answers, “Quite a bit. They’re fairly aggressive. They’ll do whatever they need to do to make their numbers look right.” Garand’s attorney, Jonathan Rich, complained that the reference to AIG book-cooking constituted “exceptionally inflammatory language.” Droney disagreed. Of course, anything that hurts your client is, ipso facto, prejudicial. The testimony here, however, seems to go to the heart of the government’s primary allegation–that the former Gen Re executives on trial helped AIG cook the books on two reinsurance transactions. Evidence must be relevant to be admissible, and the prejudicial nature of the evidence must outweigh its probative value before a judge can exclude it. Here it appears that Judge Droney not only denied a mistrial, but also refused to strike the tape evidence in the first place. The trial is expected to last two more weeks. The AP story, carried in the Houston Chronicle’s chron.com, is here.