Skip to comments.FEDS HIT 4 EXECS FOR FRAUD (AIG finagling circa 2006)
Posted on 05/22/2009 9:23:53 AM PDT by Liz
February 3, 2006: The DOJ indicted ex-AIG honcho Maurice Greenberg's former execs in a probe of complex reinsurance deals. General Re, a crown jewel in the portfolio of Warren Buffett's Berkshire Hathaway had three of its senior execs indicted. Christian Milton, former head of AIG's massive reinsurance operations, indicted on 13 counts of aiding and abetting securities fraud; former General Re CEO Ronald Ferguson, former CFO Elizabeth Monrad and Robert Graham, assistant general counsel. "The scheme was designed to mislead analysts and the investing public," said an assistant US attorney. Federal prosecutors said AIG paid General Re $5.2M via an undisclosed side agreement to boost its then-sagging stock price by covering up declines in its claims reserves. According to prosecutors, sham transactions that added $500M in "phony loss reserves" to AIG's balance sheet were used. AIG's Greenberg initiated the deal with a phone call to General Re's Ferguson in late 2000 to satisfy Wall Street analysts concerned about AIG's reserve levels.
(Excerpt) Read more at nypost.com ...
AIG is at the eye of the hurricane b/c its global Financial Products division "insured" more than a $trillion dollars in virtually worthless bank loans....and could not payoff claims. AIG's Financial Products division "insured" more than a $trillion dollars in virtually worthless bank loans.........these loans were "securitized and packaged" as profit-making financial instruments-----BUT they were built on the now-infamous subprime mortgages---mortgages that people could not payback and should never have received. AIG is an insurance company and is SUPPOSED to hold in reserve monies that the insured might rightfully request in the form of "claims." Some of the insured might never put in a claim.....but the money has to be there....just in case.
When the house of cards collapsed---AIG did not have the money to pay all the claims the insured were demanding. That's why US tax monies are going to foreign companies-----b/c they were "insured" by AIG.
Keep in mind that insurance policies are based on "faith" that the insurer respects its "moral" obligation to payoff claims. A discussion should ensue that this debacle was facilitated by the self-absorbed, carefree, no-responsibility "Age of Moral Relativity"----wherein it's everybody's fault but mine. But don't hold your breath.
As FReeper Just mythoughts posted: At the heart of everything Bama and Company are doing, and not doing, is laying the ground work for the up coming elections. (2010 -2012) AND what ever it takes to keep their campaigns flush, which when all is said and done might just end up with lord McCain revisiting his legislation to make campaign financing universal as well. NOW if it turns out that the EX needs some public attention then I expect him to be frog marched into some court. However, it may well serve them that he be ignored as though he never existed. Time will tell what works best for their next campaign slogans. NOTE We need to know what COS Rahm Emanuel knew while he was making bundle on Wall Street. Now he's figuring out the equations to buy a permanent Dem majority.
Too bad the feds don’t hit their own the way they do private citizens. Geithner, Daschle, Richardson . . . . . .
How about Liddy?
GE is the new replacement for Enron. They and the corrupt guy who runs GE (I forget his name - Jeffrey Imelt? Emelt?) is next.