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After 11 Years, Accounting Fraud Case Against Former-AIG Chief To Begin


And it's taken 11 years, but Hank Greenberg is heading to court this afternoon. Greenberg is the former head of AIG, the mega insurance company and something of a legendary figure on Wall Street. Back in 2005, he was accused of accounting fraud in order to boost stock prices. Charles Lane from member station WSHU has the story.

CHARLES LANE, BYLINE: At the age of 91, Maurice Hank Greenberg is a legend. Over the last 40 years, he revolutionized the insurance industry and built one of the largest companies in history. And then in the early 2000s, he presided over an accounting scandal. Several of those claims were settled without an admission of wrongdoing, but the case against Greenberg is still with us. Prosecutors say they are just enforcing the law, but many on Wall Street see the case as a vendetta against Greenberg.

MICHAEL WEINSTEIN: It is an epic battle. I mean - and they've had a lot of battles getting to this point.

LANE: Michael Weinstein is a former federal prosecutor who now specializes in white collar defense. He says Greenberg's legal team has a lot of work to do.

WEINSTEIN: The government and the attorney general can come back with a lot of examples of when he was a very ruthless businessman. In the public's eye, ruthless when all the things happened during the financial crisis can really be a negative.

LANE: Greenberg has spent about $25 million over the last 10 years on his defense team. Oscar Chase is a legal scholar at NYU. He says the reason this case has taken 11 years is because Greenberg's attorneys appealed a total of nine pre-trial motions, each appeal meant months of waiting.

OSCAR CHASE: In fact in this case, I calculated that something like seven and a half years was used just waiting.

LANE: It's like doing a video replay on every decision the umpire makes. Twice Greenberg asked a higher court to throw out the case without even a trial.

CHASE: That took up a number of months. in a couple of cases. Those were unnecessary in my view.

LANE: Greenberg's lawyer David Boies denies that his client is using his wealth to delay justice.

DAVID BOIES: Hank Greenberg is 91 years old. He's trying to build a new business. He's got no interest in delaying the resolution of this case.

LANE: In fact, Boies says Greenberg repeatedly tried to settle the case. But New York's attorney general refused. Boies calls this case a waste of taxpayer money, but state regulators have a lot at stake, too. To bring the case against Greenberg, New York used a very old and sweeping law called the Martin Act. State prosecutors like it because it doesn't require them to prove any intent to commit fraud. They just have to prove that fraud happened. And here again, is Michael Weinstein the white collar lawyer.

WEINSTEIN: If they are successful against Greenberg in arguing that the Martin Act applies, then they're able to roll it out and use it against similar people in the future.

LANE: So for the government, this case is not just about Greenberg. It's about policing the future titans of Wall Street. For NPR News, I'm Charles Lane. Transcript provided by NPR, Copyright NPR.

Charles is senior reporter focusing on special projects. He has won numerous awards including an IRE award, three SPJ Public Service Awards, a National Murrow, and he was a finalist for the Livingston Award for Young Journalists.