Sources quoted by the Wall Street Journal said that attorneys from New York Attorney Eliot Spitzer’s office began presenting evidence to the grand jury about the activities of several people. AIG senior executive Joseph Umansky, who has already agreed to a deal for his testimony in exchange for immunity, has already appeared before the investigatory panel, the Journal sources said.
The New York insurer, whose accounting is the focus of multiple probes by state and federal authorities, isn’t a criminal target of the grand jury, which is expected to continue meeting for about a month, according to the Journal sources.
Grand jury targets include former AIG Chairman and Chief Executive Officer Maurice “Hank” Greenberg and former Chief Financial Officer Howard Smith, the Journal sources said. Greenberg abruptly resigned as chief executive in March as regulatory pressure on the insurer intensified (See Report: AIG’s Greenberg to Step Down ). Also in March, Smith was fired for not cooperating with investigators (See AIG Executives Canned For Failing to Cooperate With Investigators ).
Authorities are probing whether AIG officials made questionable financial moves in recent years to enhance the company’s results. State and federal investigators also are looking into whether Greenberg ordered an AIG trader to make an improper purchase of the insurer’s stock when the probes first surfaced on Valentine’s Day, according to people familiar with the matter.
Spitzer’s office and the New York State Insurance Department are continuing to draft a civil complaint against AIG that is expected to cite as many as a dozen questionable or improper financial moves allegedly designed to burnish AIG’s financial results and potentially mislead investors, according to the Journal. The complaint is at least a week or two away from being completed, the people said.
« Fraud Facilitated by Advance Copies of BusinessWeek