MANHATTAN (CN) – American International Group defrauded the United States by failing to disclose that it was selling insurance without a license during negotiations over the bailout it received during the global financial crisis, a former executive claims in a federal lawsuit.
Alex Grabcheski, the former worldwide director of human resources at an AIG subsidiary, originally filed his lawsuit under seal in May 2010.
On Tuesday, May 13, U.S. District Judge George B. Daniels unsealed the case,granting Grabcheski leave to file an amended complaint, after the United States declined to join the action.
Grabcheski claims the insurance giant defrauded the United States in 2009 by failing to disclose the unlicensed status of two of its life insurance units when it negotiated a $25 billion reduction it owed the Federal Reserve Bank of New York as part of the bailout.
Grabcheski based his allegations on the “inside view” his position gave him to senior management of AIG’s Global Life companies and the firm as a whole, and that he was on hand when AIG “suffered a spectacular liquidity crisis” in September 2008, he says in the lawsuit.