AIG reportedly channeled funds from its California companies into a lending program that put over $75 billion of AIG insurance assets at risk, using the companies’ bonds and investments to speculate in high risk real estate mortgage securities. According to the suit, AIG lost the gamble and taxpayers have paid over $180 billion. The suit charges that AIG is draining funds from its California insurance companies in a futile effort to keep the financial side of the firm afloat.
Also named in the suit is AIG's decade-long auditor PricewaterhouseCoopers. The accounting firm is charged with reportedly systematically providing AIG with phony audit opinions that were filed with the State Insurance Commission.
- Ventura County (Calif.) District Attorney Gregory Totten announced that the Ventura County District Attorney's Office Auto Insurance Fraud Unit arrested and charged Jose Herrera, 29, of Canoga Park, with one count of felony auto insurance fraud.
It is alleged that on Dec. 15, 2008, Herrera committed auto insurance fraud when he contacted his Ventura-based insurance carrier, Alliance United, and falsely reported that someone had stolen his 1997 Jeep.
Herrera could be sent to state prison for up to five years if convicted of felony auto insurance fraud.