HARTFORD, Connecticut (AP) — The former chief executive of General Re Corp. was sentenced yesterday to two years in prison and fined $200,000 for his role in a scheme that cost shareholders of American International Group Inc. more than $500 million.

Ronald Ferguson, 66, of Fairfield, was convicted in February of conspiracy, securities fraud, mail fraud and making false statements to the Securities and Exchange Commission. He also must serve two years of supervised release after the prison time.

US District Judge Christopher Droney said he considered Ferguson's history of community service and volunteerism in setting a sentence far below federal guidelines. Ferguson could have received what would have amounted to a life prison term.

"This case is a tragedy, especially for Ron Ferguson," Droney said. "We will never know why such a good man did such a bad thing."

Ferguson was among four General Re executives convicted earlier this year, along with a former AIG official.

Prosecutors say the accused participated in a scheme in which AIG paid Gen Re in a secret side agreement to take out reinsurance policies with AIG in 2000 and 2001, propping up AIG's stock price and inflating reserves by $500 million.

In November, the judge ruled that the scheme cost AIG shareholders between $544 million to $597 million, based on a study produced by a financial expert hired by prosecutors.

Support for Ferguson came from some prominent insurance executives, including at least two from Bermuda-based companies - Ironshore president Robert Deutsch and Constantine Iordanou, the president and CEO of Arch Capital.

Ferguson and his attorneys maintained throughout the case that he was only peripherally involved, largely because of a one-hour phone conversation with one of the principal players.