Former American International Group Chairman Hank Greenberg admitted to participating and approving two fraudulent reinsurance deals as part of a settlement over a decade-old fraud lawsuit, said New York Attorney General Eric Schneiderman.
The settlement, announced Friday, resolves a bitter court fight in which Greenberg and his lawyer David Boies squared off against three successive state attorneys general over 11 years.
“Today’s agreement settles the indisputable fact that Mr. Greenberg has denied for twelve years — that Mr. Greenberg orchestrated two transactions that fundamentally misrepresented AIG’s finances,” Schneiderman said in a lawsuit.
Greenberg was fighting allegations that he used two sham transactions to hide the insurer’s true financial condition. The trial began in September, more than 11 years after former New York Attorney General Eliot Spitzer filed suit.
Greenberg stepped down as CEO of AIG in 2005 after building it into the world’s largest insurer over four decades. Shortly thereafter, the company said one of its transactions was improper, restated its earnings by $3.4 billion and paid $1.6 billion to settle claims by regulators.
