Former AIG chief Hank Greenberg finally goes on trial

Tue Sep 13, 2016 6:37pm EDT
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By Karen Freifeld

NEW YORK (Reuters) - Opening arguments began on Tuesday in the trial of former American International Group Inc chairman Maurice "Hank" Greenberg over accounting fraud at the insurance giant some 16 years ago.

Greenberg, 91, is facing civil charges from the New York Attorney General's Office of orchestrating a $500 million transaction to inflate the insurer's reserves and a $200 million transaction to hide underwriting losses. Former AIG Chief Financial Officer Howard Smith is also named as a defendant.

The two men "designed, created, negotiated and implemented every major aspect" of the two fraudulent transactions in the case, Assistant Attorney General David Ellenhorn said in his opening statement.

Greenberg, who sat at the defense table in New York state court in Manhattan, is expected to testify during the trial.

David Boies, Greenberg's lawyer, said in his opening that the attorney general's office would not be able to prove any wrongdoing.

"This case is devoid of any admissible evidence that ties Mr. Greenberg to anything improper in either of these transactions," Boies said.

Vincent Sama, who represents Smith, will give his opening on Wednesday.

The case, filed by then-New York Attorney General Eliot Spitzer in 2005 and continued by Attorney General Eric Schneiderman, did not go to trial for more than a decade, due to legal wrangling that twice made its way to the Court of Appeals, the state's highest court.   Continued...

Former CEO of American International Group Inc.,  Maurice "Hank" Greenberg, (C) leaves a building in downtown New York after being deposed by the Attorney General's office March 10, 2010. REUTERS/Jessica Rinaldi