By LINDA KRESTANOVA
Maurice “Hank” Greenberg, 91, mumbled page numbers to himself as he leisurely shuffled through pages of documents he was asked to read, only to answer repeatedly, “I don’t recall.”
Wearing a blue suit and gold-rimmed reading glasses, the ex-CEO of AIG appeared relaxed Thursday at Manhattan Civil Court during his third day on the witness stand, where he defended himself against claims that he had orchestrated sham transactions to hide insurance losses. At stake was an estimated $55 million.
At one point, he even chuckled at an objection made by his own lawyer.
“This is very soothing,” New York State Supreme Court Justice Charles E. Ramos jokingly said, “but I really wish we’d move this along. I do have 350 other cases.”
During Greenberg’s testimony, the state kept the focus on fraud allegations regarding an auto-warranty program of 2000, specifically AIG’s former senior vice president Joseph Umansky’s decision to search for investors for CAPCO Reinsurance Co. in Switzerland. CAPCO, a Barbados-based company, had allegedly been utilized in unloading losses from the auto-warranty program.
The case against Greenberg, AIG’s former chief executive, was first filed in May 2005 by former New York Attorney General Eliot Spitzer. The defendants, Greenberg and Howard I. Smith, AIG’s former chief financial officer, were accused of orchestrating fake deals in 2000 and 2001 that concealed insurance losses worth hundreds of millions of dollars from shareholders.
Despite denying the allegations, Greenberg and Smith paid $16.5 million to settle failure-to-supervise charges. The state is now seeking to bar the two men from serving in the securities business or as executives of any public company. It is also seeking damages of over $50 million, an amount based on what the two men received in bonuses, with interest, after the transactions under scrutiny.
Greenberg arrived early and sat in silence, leaning back in his chair while his lawyers conversed. Later, during a break, he strolled through the courtroom and initiated numerous conversations, at times smiling to himself as he looked around.
The trial, which is being heard without a jury, was scheduled to resume on Oct. 3, where Greenberg is set to continue his testimony.
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