Greenberg Refuses to Answer Deposition in Gen-Re Case
Former American International Group Inc. Chairman Maurice R. Greenberg has refused to answer questions in a deposition by lawyers for the New York Attorney General's office about a sham 2000 reinsurance deal between AIG and General Re Corp., Mr. Greenberg's lawyer confirmed.
In the last of four days of testimony, Mr. Greenberg last weekend invoked his Fifth Amendment right against self-incrimination, declining to answer Gen Re-related questions arising from the attorney general's civil fraud lawsuit against him, said Robert Morvillo, a criminal defense lawyer representing Mr. Greenberg.
Mr. Greenberg had previously answered questions about several other AIG transactions unrelated to Gen Re that are cited in the attorney general's complaint, Mr. Morvillo noted. The complaint, originally filed in a New York state court in 2005, charges that Mr. Greenberg orchestrated a variety of transactions to manipulate AIG’s financial results.
Five former executives of Gen Re and AIG are awaiting sentencing in a Hartford, Conn., federal court after their convictions earlier this year in a separate criminal fraud case related to the 2000 transaction. Prosecutors alleged that the deal—initiated by a call from Mr. Greenberg to former Gen Re Chief Executive Officer Ronald E. Ferguson—transferred no risk and was designed only to inflate AIG's loss reserves to placate stock analysts.
Mr. Greenberg, whom prosecutors identified as an unindicted co-conspirator in the case, has denied any wrongdoing in the transaction.
"The continued investment of resources for the last three and a half years by the U.S. Department of Justice in a reinsurance transaction between AIG and General Re which had no impact on the earnings or revenues of either company and which took place eight years ago, in the current atmosphere of huge corporate defalcations and misdeeds threatening the economic security of the United States, indicates a troubling lack of perspective," Mr. Morvillo said in a statement.
"As a result, I have advised Mr. Greenberg that he should decline to testify on this subject matter until such time as a semblance of fairness is injected into the process," he said.
Federal prosecutors handling the Gen Re criminal case said earlier this year that the investigation is continuing and that they intended to go "up the ladder" against other possible defendants.
Mr. Morvillo said that prosecutors have not been in touch with him so far regarding Mr. Greenberg.
Source: Source: Business Insurance | Published on October 17, 2008
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