AIG'S FALL: BAD BUSINESS OR CRIMINAL ACTS - CBS NEWS -- The Catbird's Forum

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Date Posted: 04:04:32 04/28/09 Tue
Author: Bobby N. Harmon
Subject:

AIG'S FALL: BAD BUSINESS OR CRIMINAL ACTS - CBS NEWS

CV05-00030 - U.S. Dept. of Justice, David C. Farmer, Trustee vs Harmon - Exhibit: "AIG's Fall: Bad Business Or Criminal Acts: CBS News"�

From: Bobby N. Harmon, CPCU, ARM

Sent: Tue 4/28/09 1:34 AM

To: President Barack Obama (president@whitehouse.gov); U.S. Attorney General Eric Holder (AskDOJ@usdoj.gov); David Farmer (farmerd001@hawaii.rr.com); Steven Guttman (sguttman@kdubm.com); Carol K. Muranaka (ustp.region15@usdoj.gov); Judge David A. Ezra (theresa_lam@hid.uscourts.gov); Judith Neustadter (Judy@tiki.net); Judge Kevin S.C. Chang (shari_afuso@hid.uscourts.gov); Judge Barry M. Kurren (tammy_kimura@hid.uscourts.gov); Securities & Exchange Commission Enforcement Division (enforcement@sec.gov); U.S. Treasury Dept. Office of Inspector General (hotline@oig.treas.gov); Office of Inspector General US Dept of Justice (oig.hotline@usdoj.gov); Executive Office for U.S. Trustees (ustrustee.program@usdoj.gov); Judge Robert Faris (hib@hib.uscourts.gov); SEC Office of The Inspector General (oig@sec.gov); Hawaii State Bar Association (info@hsba.org); Charles Goodwin (HONOLULU@FBI.GOV); Hugh Jones (hugh.r.jones@hawaii.gov); Insurance Division Fraud Branch (insfraud@dcca.hawaii.gov); Lawrence Reifurth (dcca@dcca.hawaii.gov); Linda Lingle (governor.lingle@hawaii.gov); Jo Ann Uchida (rico@dcca.hawaii.gov); Office of Inspector General Civil Rights Complaints (inspector.general@usdoj.gov); Mark Bennett (hawaiiag@hawaii.gov)

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http://www.cbsnews.com/stories/2009/04/27/cbsnews_investigates/main4972588.shtml

AIG's Fall: Bad Business Or Criminal Acts?

CBS Exclusive: Investigators Digging Into Whether Execs Of Failed Financial Giant Misled The Public

NEW YORK, April 27, 2009

(CBS) A $5 million Connecticut mansion. A $4 million London townhouse. A $7 million English estate. The houses are owned by three men CBS News has learned are now the subjects of a Justice Department criminal investigation into how AIG crumbled.

Sources say investigators are digging into whether Joseph Cassano, the former head of London-based AIG Financial Products, and two of his top deputies - Andrew Forster, an executive vice president, and Thomas Athan, a managing director - committed securities fraud and other federal crimes, reports CBS News chief investigative correspondent Armen Keteyian.

At issue: whether they intentionally provided false information about the size of AIG's loses in the mortgage-backed securities market to the public and auditors.

"They would look at the email traffic to try and see who was saying what to whom," said John Laperla, a former fraud investigator for the U.S. Postal Inspection Service.

"The criminality would be if someone willfully intended to basically put in false information and ultimately defraud the general public and the stockholder," Laperla said.

CBS News has learned investigators are honing in on statements like one in a September 30, 2007, quarterly report, where potential accounting losses tied to its Cassano's unit, known as AIGFP, were $352 million. And the company said it was "highly unlikely..{it} will be required to make payments." To clients, it was an indication the company was saying it was healthier than it actually was.

Also under scrutiny is a November 7 press release where AIGFP upped that potential accounting loss to $550 million.

But by the end of the year the potential losses became real and devastating, ballooning to more than $11.5 billion.

"That's a significant red flag," said Patricia Pileggi, a former federal prosecutor. "I mean a jump like that in three months raises real questions."

In a statement AIG told CBS News: "To date, neither AIG nor AIGFP is aware of any fraud or malfeasance in connection with the underwriting and creation of the multi-sector CDS portfolio, as opposed to what, with hindsight, turned out to be bad business decisions. AIG and AIGFP are, however, aware of ongoing investigations by the Department of Justice and the SEC with respect to the subsequent valuation of the multi-sector CDS portfolio under fair value accounting rules and related disclosures. We have cooperated fully with these investigations and will continue to do so."

A senior AIG official told us: "Everyone at the corporate office was stunned when the problems with valuing the CDS portfolio came to light in February of 2008. It became clear immediately that the potential losses on the swaps were far greater than anyone imagined. That�s when (Martin) Sullivan asked (Joseph) Cassano to resign."

Through their attorneys for both Cassano and Forester declined comment on our story. Athan's attorney said his client arrived at AIGFP after it "sustained substantial losses" and was working "to help minimize the continuing risk."

And now CBS News has learned that Athan and Forster pocketed bonuses paid out by AIG just two months ago - in the midst of a federal investigation. Sources say they are now negotiating a way to pay them back.

# # #

References:
http://www.kycbs.net/
http://www.kycbs.net/ACE.htm
http://www.kycbs.net/AIG.htm
http://www.kycbs.net/AIPAC.htm
http://www.kycbs.net/Allied-World-Assurance.htm
http://www.kycbs.net/Bailing-Out-Wall-Street.htm
http://www.kycbs.net/ChubbGroup.htm
http://www.kycbs.net/CITIGROUP.htm
http://www.kycbs.net/CV05-00030-OUST-vs-Harmon.htm
http://www.kycbs.net/CV05-00030-Witness-Campaniano-Robin.htm
http://www.kycbs.net/CV05-00030-Witness-Farmer-David.htm
http://www.kycbs.net/CV05-00030-Witness-Gotbaum-Joshua.htm
http://www.kycbs.net/CV05-00030-Witness-Greenberg-Ace.htm
http://www.kycbs.net/CV05-00030-Witness-Greenberg-Hank.htm
http://www.kycbs.net/CV05-00030-Witness-Greenberg-Jeffrey.htm
http://www.kycbs.net/CV05-00030-Witness-Paulson-Henry.htm
http://www.kycbs.net/CV05-00030-Witness-Rubin-Robert.htm
http://www.kycbs.net/CV05-00030-Witness-Silverstein-Larry.htm
http://www.kycbs.net/Freedom-To-Sing.htm
http://www.kycbs.net/GoldmanSachs.htm
http://www.kycbs.net/Henry-Paulson.htm
http://www.kycbs.net/MarshBirds.htm
http://www.kycbs.net/JUSTICE.htm
http://www.kycbs.net/No-Bailout-for-Billionaires.htm
http://www.kycbs.net/PriceWaterhouse.htm
http://www.kycbs.net/SLAPP.htm
http://www.kycbs.net/Treasury.htm
http://www.kycbs.net/XL.htm
http://www.kycbs.net/Zurich.htm

April 28, 2009

Dear President Obama, Attorney General Holder, Mr. Farmer; Mr. Guttman; Ms. Muranaka; Judge Ezra, Judge Chang, Judge Kurren, and All Concerned:

Due to the discovery of NEW FACTS in this case, I am adding the subject Exhibit as it relates to your lawsuit which violates my Constitutional Rights of Free Speech and a Fair Trial by a jury of my peers, and to Federal and Hawaii Anti-SLAPP statutes.

In view of all the facts that I have presented in this and hundreds of other Exhibits and witness descriptions, it is beyond comprehension that former Attorney General Alberto Gonzales; Assistant U.S. Trustees Curtis Ching, Gayle Lau and Carol Muranaka; Judges Eden Hifo (fka Bambi Weil), Kevin Chang, David Ezra, Barry Kurren, Lloyd King and Robert Faris, and Trustees Mary Lou Woo, James Nicholson and David C. Farmer; the American Arbitration Association arbitrator Judith Neustadter Fuqua, and attorney Steven Guttman can still claim that they were non-conflicted, fair, impartial, and unbiased in this case.

In spite of all this factual evidence (not just "political opinions" or "conspiracy theories" as you have alleged before), I am again asking that we attempt to reach a global settlement of this matter through confidential negotiation or mediation rather than continuing these costly and seemingly-endless court proceedings.

If you, and your insurance carriers, are still NOT willing to attempt to negotiate or mediate a settlement, then I ask that you perform your mandated review of this new Exhibit in accordance with Judge Ezra's Order, and advise me if you find it contains any so-called "protected subject matter", and whether or not you intend to OBJECT to my filing a Motion to reopen this case.

Mr. Farmer, I respectfully request your immediate reply. If I do not receive a response from you or your insurance carrier within 15 days, I will assume that you have found no "PSM" in these updated pages, and that you will NOT file any objections to my Motion.

Very truly yours,

Bobby N. Harmon, CPCU, ARM

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