AIG's Greenberg says cannot be charged

NEW YORK (Reuters) - Maurice “Hank” Greenberg, the former chief executive of American International Group Inc, believes he no longer faces possible criminal charges over a sham transaction involving the insurer and a unit of Warren Buffett’s Berkshire Hathaway Inc.

Hank Greenberg, who was chief executive of Insurer American International Group (AIG) from 1967 until 2005, appears on the Fox News Channel's "Your Money" in New York, September 17, 2008. REUTERS/Mike Segar

In a March 2 affidavit filed with the New York State Supreme Court in Manhattan, Greenberg said the statute of limitations to prosecute him over the 2000 transaction between AIG and Berkshire’s General Re Corp unit expired on Feb 21.

As a result, he said, he is now prepared to testify about the matter.

Federal prosecutors have already obtained five convictions and two guilty pleas of former General Re and AIG officials over the transaction, which boosted AIG’s loss reserves by $500 million without transferring risk. Among those convicted was onetime General Re Chief Executive Ronald Ferguson.

Greenberg said that in October 2008, he invoked his constitutional right against self-incrimination about the transaction, as he was giving testimony in a civil fraud lawsuit originally filed in 2005 against him and former AIG Chief Financial Officer Howard Smith.

But with the statute of limitations apparently having run, Greenberg said in his March 2 affidavit: “I am prepared to testify regarding the Gen Re transaction and to be heard on the issues concerning the Gen Re transaction. I therefore withdraw my earlier invocation of my Fifth Amendment rights.”

Eliot Spitzer, then New York’s attorney general, filed the civil fraud lawsuit against Greenberg and former AIG Chief Financial Officer Howard Smith in 2005. The case is now being overseen by Andrew Cuomo, Spitzer’s successor.

Representatives of Cuomo’s office and the U.S. Department of Justice had no immediate comment.

In a separate filing, Greenberg’s lawyer, Nicholas Gravante, said the longest potential criminal statute of limitation covering the transaction expires after five years.

He said this period began to run no later than February 21, 2005, when the market learned of matters concerning the General Re transaction.

“Counsel for Mr. Greenberg is now confident that all potential criminal statutes of limitation relating to the Gen Re transaction have expired,” wrote Gravante, a partner at Boies, Schiller & Flexner LLP in New York.

“Limited use of the Fifth Amendment is no longer necessary to exercise prudence in protecting Mr. Greenberg’s innocence,” he added.

New York State Supreme Court Justice Charles Ramos is overseeing the civil fraud lawsuit. He has set a March 8 hearing on Greenberg’s request to reopen his deposition.

The federal government has said Greenberg was an unindicted co-conspirator in their case. Greenberg has consistently denied wrongdoing. Buffett was questioned by investigators about the transaction but was never accused of wrongdoing.

Greenberg was ousted as AIG’s chief executive in March 2005. The General Re is not related to the government’s roughly $180 billion of bailouts of the company, which leave it holding a nearly 80 percent stake.

The case is New York v. Greenberg, New York Supreme Court, New York County, No. 401720/2005.

Reporting by Jonathan Stempel; Additional reporting by Paritosh Bansal; Editing by Tim Dobbyn