A long case of fraudulent transaction in AIG has reached settlement. Two former executives of the AIG, CEO Hank Greenberg and CFO Howard Smith have agreed to pay $9.9 million settlement to New York Attorney General office.
According to CNBC, the settlement is agreed over the role of Greenberg and Smith to misinterpret the company’s finances. They have to return the money they had received as performance bonuses between 2001 and 2004 when the fraudulent transactions occurred.
For 12 years, the New York Attorney General has focused to uncover the fraudulent reinsurance deal committed by AIG in the early 2000s. Greenberg has denied the allegation of the fraudulent transactions in two reinsurance transactions which reflected in the inaccurate financial statement of the insurance company.
The New York Attorney General Eric Schneiderman expressed his pleasure with the settlement. The Office of the New York Attorney General is pleased because both Greenberg and Smith have finally acknowledged their role in the AIG accounting fraud case that they have denied for 12 years. Greenberg himself will pay $9 million and Smith pay $900,000 to the state of New York.
“We are pleased that Mr. Greenberg has finally admitted to his role in these fraudulent transactions," Attorney General Schneiderman said in the statement as quoted by USA Today. However, Greenberg attorney David Boies stated the characterization of the case by Schneiderman as misleading and false. Boeis said that the New York Attorney General does not have any single evidence that Greenberg was aware of the two fraudulent transactions targeted by the New York Attorney General.
Greenberg himself issued the statement as part of the settlement, saying the transaction was conducted to increase loss reserves of AIG. He also said that he initiated, participated and approved those transactions.
AIG is also part of the defendant in the original case in 2005 which was pursued by Eliot Spitze, then attorney general. After three successive attorney general worked on the case, AIG reached the settlement last year for $1.6 billion. Watch the Fox News interview with Greenberg regarding the $9.9 million settlemen with the state of New York below:
