A former AIG executive warned Maurice “Hank” Greenberg that business associates had “cause for concern” over one of the transactions at the center of an 11-year-old fraud case against the insurance industry legend.
In a July 2002 memo to Greenberg, Christian Milton said the transaction “was giving [Gen Re executive Richard Napier] some cause for concern.”
AIG and General Re engaged in a $500 million “low risk” deal aimed at lowering AIG’s liabilities.
State prosecutors claim Greenberg knew the deal carried no risk and was therefore a sham.
Greenberg’s legal team claims the ex-CEO structured a proper deal but that subordinates twisted it into something less than proper.

Assistant Attorney General Manisha Sheth questioned Milton, the first witness in the trial, to show the court that Greenberg should have known something wasn’t kosher with the deal.
But when Sheth asked Milton what specifically concerned Napier, Milton said he couldn’t remember.
“I picked up a tone, I believe, in Mr. Napier’s voice,” he said.
Milton, 67, was one of four insurance executives in 2008 who were found guilty of spearheading the fraud.
The conviction was overturned on appeal in 2011. A second trial was thrown out the next year as part of a deferred prosecution agreement.
Greenberg orchestrated the deal with General Re, a reinsurance company owned by Warren Buffett’s Berkshire Hathaway, in 2000.
Ex-AIG CFO Howard Smith is also charged in the case. Smith’s lawyers also claim their client knew nothing about how the deal eventually turned out.
The trial, before Justice Charles Ramos in Manhattan state court, is expected to last up to six months.
The case has received plenty of pre-trial publicity because of the animus between then-Attorney General Eliot Spitzer and Greenberg, one of the most respected executives on Wall Street.

Memo to Maurice Greenberg from Christian Milton by New York Post on Scribd