Ignoring the request of a federal prosecutor, a New York judge has given a previously secret internal report on accounting infractions at American International Group to AIG's ousted chairman Maurice Greenberg.
Attorneys for Mr. Greenberg, who faces civil fraud charges in a lawsuit by New York Attorney General Eliot Spitzer, obtained the bulky document last night, according to a spokesperson for Mr. Greenberg's legal team, Brooke Parker.
The material, which Ms. Parker said was more than 100 pages, was ordered turned over by New York Supreme Court Justice Charles E. Ramos, who had earlier denied the company's request to keep it from Mr. Greenberg.
Before the transfer took place, Paul McNulty, U.S. Attorney for the Eastern District of Virginia in Alexandria, Va., had written Judge Ramos that releasing the report could be harmful to the U.S. Justice Department's prosecution of a former AIG executive and three former Berkshire Hathaway Inc. executives.
The U.S. Attorney's Office in Virginia has been unwilling to comment about Mr. McNulty's request. Ms. Brooke would say nothing else about the report and neither would Mr. Spitzer's office. Chris Winans, an AIG spokesman, had no comment.
Mr. Greenberg's attorney, Nicholas Gravante, prior to obtaining the AIG internal report contended in court that it was biased and designed to throw all the blame for accounting irregularities on Mr. Greenberg and shield current officers of AIG.
He argued that the “flawed” report was used by Mr. Spitzer's office to decide who to charge, what to charge them with and who not to charge.
In addition to former AIG vice president of reinsurance Christian Milton, the federal criminal case charges three former officers of the reinsurance unit of Warren Buffett's Berkshire Hathaway in a $500 million accounting fraud designed to pump up AIG's reserves by disguising a loan as a finite reinsurance transaction.
The AIG internal report, written last spring by lawyers for the insurance giant, was given to Mr. Spitzer before he filed his civil action charging Mr. Greenberg with accounting fraud to improve the company's financial picture and boost AIG's stock price.
AIG, as a company, also was charged in the attorney general's suit, but it settled the case by agreeing to pay $1.64 billion and make a variety of changes in its operations.
Mr. Greenberg, who was ousted from the company last March, has vigorously denied any improper activity and no criminal charges have been brought against him, but two potential witnesses in the ongoing Virginia case have identified him as the impetus behind the allegedly fraudulent reinsurance transaction.
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