| NEW YORK, Sept 13
NEW YORK, Sept 13 Opening arguments are set to
begin 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 of orchestrating a
$500 million transaction to conceal the insurer's financial
difficulties from shareholders. He is expected to testify during
The case, filed by then-New York Attorney General Eliot
Spitzer in 2005 and which also names former AIG chief financial
officer Howard Smith as a defendant, did not go to trial for
more than a decade, thanks to legal wrangling that twice made
its way to the Court of Appeals, the state's highest court.
New York Attorney General Eric Schneiderman has said he
continued to pursue the case to show "no one, no matter how rich
or powerful can evade responsibility for misconduct."
David Boies, Greenberg's lawyer, plans to argue the lawsuit
was politically motivated.
"This case was brought by Eliot Spitzer expressly because he
was angry at Hank Greenberg," Boies said in an interview on
Monday. He plans to enter evidence that Spitzer was irate about
statements Greenberg made about the attorney general's overly
aggressive approach towards alleged corporate misconduct.
Greenberg and Smith tried for years to have the case thrown
out as having no merit, but the Court of Appeals said there was
enough evidence to proceed to trial.
Greenberg nearly settled the case in 2008 with a $100
million gift to charity, Boies said, but the market crashed that
September along with the value of Greenberg's AIG stock
Damages are no longer on the table after Greenberg, Smith
and other executives separately reached a $115 million
settlement with AIG shareholders, but the Court of Appeals ruled
in June that Schneiderman could seek to recoup millions in
bonuses paid to the defendants during the time the alleged fraud
Justice Charles Ramos of New York state court in Manhattan
will decide the non-jury case, which may run into early next
year with breaks between trial dates. Some 20 to 25 witnesses
are expected to testify, according to Boies.
Greenberg led AIG for four decades before he was ousted in
2005. The following year, AIG paid $1.64 billion to settle
federal and state probes into its business practices.
The case is People v Greenberg et al, New York State Supreme
Court, New York County No. 401720-2005.
(Reporting By Karen Freifeld; Editing by Anthony Lin)