Government Still Pursuing Greenberg Case 9 Years Later

, New York Law Journal

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Maurice Greenberg
Maurice Greenberg arriving at a meeting for AIG's board of directors in 2013. In background is David Boies, lead counsel for Greenberg.

Editors' Note: This article has been updated to reflect a Correction.

 

ALBANY - After nine years of litigation pursued by three different attorneys general and recent court rulings that seem to lift any remaining barriers to a trial, the end of the civil fraud case against business titan Maurice "Hank" Greenberg is still nowhere in sight.

In fact, it's barely begun.

Greenberg and his attorneys have battled a succession of attorneys general, beginning with Eliot Spitzer, who started it all in 2005, and his successors, Andrew Cuomo and now Eric Schneiderman.

See Timeline of Dispute Between Ex-AIG Executives and State.

Greenberg, the former chief executive officer of American International Group (AIG), has successfully knocked out seven of the original state claims against him and his co-defendant, former AIG chief financial officer Howard Smith. And by settling a parallel federal action for $115 million, they took state damages, as well as New York's far-reaching Martin Act, out of the picture.

But they've lost key battles at the trial level, in the mid-level appellate court and in the state Court of Appeals. And they recently failed in a spirited attempt to get the trial judge, Manhattan Supreme Court Justice Charles Ramos, removed for alleged bias (NYLJ, Feb. 5) on the grounds that he has been "aggressive and argumentative" toward the defense and has betrayed favoritism in his courtroom comments.

Neither side expects the case to come to trial in 2014. Rather, they assume it will spill over to 2015, a full decade since Spitzer boldly—critics say recklessly—accused the leaders of what was the world's largest insurance conglomerate of "fraudulent transactions designed to portray an unduly positive picture of AIG's loss reserves and underwriting performance." (AIG settled with the state long ago and is not a party in the case.)

It is, without question, a complicated case that once potentially put billions of dollar at stake. But complicated, high stakes cases are not uncommon, and few of them have dragged on as long as People v. Greenberg, 401720/05.

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