Former AIG exec draws scrutiny - Federal prosecutors and FBI investigating AIG's Cassano

MarketWatch ^ | March 31, 2009 | UPI

[Jim Robinson]

WASHINGTON, Mar 30, 2009 (UPI via COMTEX) -- U.S. investigators are looking into possible criminal fraud by a former American International Group Inc. executive, ABC News reported Monday.

Federal prosecutors and FBI agents are investigating Joseph Cassano, 54, who ran AIG's Financial Products Division, the U.S. network reported. The department lost hundreds of billions of dollars and Rep. Jackie Speier, D-Calif., told ABC Cassano "almost single-handedly is responsible for bringing AIG down and by reference the economy of this country."

ABC said its own investigation determined Cassano set up dozens of companies -- some off-shore -- to keep transactions off AIG books and hidden from U.S. and British regulators.

Cassano was paid more than $300 million to run the AIG Financial Products Division, through which AIG insured junk quality loans valued at more than $1 trillion, ABC said. He was fired in 2008 after the losses were reported, but he continued to draw $1 million a month until Congress took up a bailout of AIG, using $180 billion in public funds.

"They basically took peoples' hard earned money and threw it away, gambled it and lost everything," Speier said.

Tax law specialist Jack Blum told ABC the deals worked by Cassano's division were "absolutely toxic and most of the people who were dealing in it knew how toxic it was."

ABC News approached Cassano outside of his home in London but he would not discuss the allegations.

[Eric Blair 2084]

Great post. Dodd, Hussein Osama can lie.

Facts and numbers don’t. I’m sure this will be reported in the NY Slimes tomorrow. Right after a pig flies over my roof and eats the turkey vultures who are there every day and poop on my deck.

[Steelfish]

“My name’s not Elgin, Merlin, Finn or Larkin!
My secret name is Rumplestiltskin!”

This was the guy who was spinning gold from bales of straw for all of AIG and they all colluded in this and were aided and abetted by their agents in Congress. Taxpayers got the coal.

[lodi90]

It would be interesting to see the total campaign “donations” from all connected to AIG to zero. Will he be returning the money?

[Eric Blair 2084]

ABC said its own investigation determined Cassano set up dozens of companies -- some off-shore -- to keep transactions off AIG books and hidden from U.S. and British regulators. Cassano was paid more than $300 million to run the AIG Financial Products Division, through which AIG insured junk quality loans valued at more than $1 trillion, ABC said.

This falls under the category of: Don't believe everything you read in the newspaper, prosecutorial brief by an ambitious prosecutor or police report by a cop who beat the snot out of a citizen. They all have reasons to lie.

This guy is probably guilty of something. Stupidity probably. That's not an indictable offense.

However, this story doesn't explain what happened. Lazy MSM reporter looking for a headline. It's actually pretty simple. AIG had a AAA rating. They issued Credit Default Swaps which were an UNREGULATED type of insurance product to insure big banks against the possible, probable, likely risk of default by loaning hundreds of thousands of dollars for waitresses, illegal immigrants who claimed to make 200k per year on a liar loan in order to buy a house they couldn't possibly afford. AIG collected the premiums to insure 5 trillion dollars worth of loans even though they only had 2 billion in reserves. Who thought this could happen except sane taxpaying American citizens.

The banks didn't care. They sold the loans to someone else like Fannie and Freddie where Barney the homosexual lisping dinosaur was dating some dude in the underwriting department.

Don't hold your breath waiting for Barney or Dodd to convene a congressional subcommittee investigation of themselves.

[P-Marlowe]

Tax law specialist Jack Blum told ABC the deals worked by Cassano's division were "absolutely toxic and most of the people who were dealing in it knew how toxic it was."

I for one am getting pretty sick of the word "toxic."

[LibertyRocks]

I’m glad to hear there are investigations going on. This is how things are supposed to work vs. using the legislature to penalize people for crimes...

I have to say that this had better be an “equal opportunity” investigation on the FBI’s part. When looking at the names and the players one can’t hardly believe that there are not just as many Congresspeople as there are AIG executives (and other Corporation Execs) who are guilty of fraud in one way or another as a result of this bailout...

The FBI itself said that because of the bailout economic crimes would skyrocket. I just hope they have enough agents to protect us from the criminals within our government without putting us at risk for outside threats!

[DISCO]

Bush’s fault. Sorry. Just thought it fit.

[bobaloobob]

Yeah!! They found the SCAPEGOAT..the patsy..the sure-nuff fall guy...

I'm so happy now that US investi”gaters” have actually found the one criminal fraud Expert that made the whole world collapse..whew!

You know, I was beginning to think it was some of our good folks in WASH-in-DC.I sure was wrong to think that, I don't know what came over me.Wow! he's even in a foreign country now..he must have made a run for it.I guess our guys are off the hook now.

He was even siphoning $1million a month from AIG even after he left everyone else holding the bag...smart man...wonder how much that is..by the hour? Well..Geithner and Dodd and the others can rest easy now...especially since all the attention will shine on him...I secretly was thinking it had to be a foreigner to have done that to Americans...like collapsing all those retirement accounts.. an American would could never have done that.

Goodnite to...who evers left here.

[browardchad]

Well, yes, I feel better now, too. I was kind of worried that maybe some people, or maybe even a lot of people, in our government were dirty crooks, but I know better now -- it was one incredibly evil guy behind the whole thing.

All is well with the world.

[maggief]

http://www.nytimes.com/glogin?URI=http://www.nytimes.com/2008/09/28/business/28melt.html&OQ=_rQ3D2&OP=1c124185Q2FQ3Ar_Q3FQ3AVaLqgaapQ27Q3AQ27mmGQ3Am4Q3AQ27GQ3AQ3Fyqi._qqQ3AQ27Gh_-pQ25Q20ph-

Behind AIG ‘s crisis, a blind eye to risks
Bulletin, The (Bend, OR) - Sunday, September 28, 2008
Author: Gretchen Morgenson The Bulletin

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3225213/AIG-trail-leads-to-London-casino.html

AIG trail leads to London ‘casino’
Since 1987 the American financier Joseph Cassano has divided his time between London and Connecticut, where AIG, the world’s largest insurance company, runs a subsidiary called AIG Financial Products.

[theDentist]

”They basically took peoples’ hard earned money and threw it away, gambled it and lost everything,”

Hey!! That sounds like they were treading on Government grounds!

[SkyPilot]

All the big DNC contributors are getting mug shots taken.

Taking people's money and gambling it away?

There are just so many thieves.

[EBH]

The department lost hundreds of billions of dollars and Rep. Jackie Speier, D-Calif., told ABC Cassano "almost single-handedly is responsible for bringing AIG down and by reference the economy of this country."

Many people will become 'useful idiots' of the administration. Congress Critters making statements like Speier's has made here are jumping on the burning bandwagon. Prosecute this guy according LAW, not in the DEMOCRAT's court of public opinion. Which means we should see others taking the perp walk right alongside him.

Absolutely we should seek justice under the LAW, but is there not a buyer's beware clause in purchasing some of these financial instruments? And how does part of the responsibility get laid at the feet of the buyer too? As someone pointed out up thread, what to make of those who committed the crime of fraud in the first place? Meaning those who lied on their loan applications.

You see I view what this guy did as contemptible, but he is not wholly guilty nor innocent. There are a lot of rungs on this ladder that are broken and each contributed to the fall.

Greed, it is all greed when it comes down to basic facts. Greed of how much of a loan I can scam from the bank to how can I scam the market on the failed productivity of the home buyer.

We must use caution in our own judgment and thinking. We must be aware of the propaganda being spewed from by the MSM and Congress. If we are to remain a nation of laws, we must assure that investigations remain in the real Courts and do not make it to the kangaroo court of congressional hearings.

[classified]

Rather play it safe and keep it as juggler!

[grey_whiskers]

Wouldn’t it be great if the investigation into Cassano’s dealings took the feds to Soros?

Or even better, Pelosi, Reid, and Obama? /sarc>

[Diogenesis]

---

"Top 20 Recipients of AIG Contributions in 2008"

---

"Sen Dodd (D-Conn) is THE lawmaker who legislated US government protection for AIG bonuses via the bailout package."

"Sen. Dodd has been rewarded in the 2008 election cycle with $7.65 million in campaign contributions
he took in $11.7 million in all — from the securities, insurance, real-estate and commercial-banking industries...
Citigroup, $310,294; SAC Capital Partners, $282,000; United Technologies, $263,400; AIG, $224,678; Bear Stearns, $205,600; St. Paul Travelers, $205,400; Royal Bank of Scotland, $203,750;
Goldman Sachs, $175,600; Morgan Stanley, $155,000; Credit Suisse, $154,550; Merrill Lynch, $134,950; The Hartford, $94,350; Bank of America, $91,300;
JPMorgan Chase, $129,150; USB, $101,900; Hartford Finance Services, $101,500, Lehman Brothers, $128,400; KPMG, $113,100; General Electric, $108,250; Deloitte Touche, $108,000
With $165,400, Sen. Dodd also tops the list of members of Congress who took campaign cash from Fannie Mae and Freddie Mac since 1989.
Sen. Barack Obama, the self-styled agent of change, is a distant second at $126,000...."

---

"AIG's Small London Office May Have Lost $500B"
Ground zero for AIG's spectacular implosion, which has soaked up more federal bailout money
than any other entity, appears to have been a small London branch office
that may have lost nearly half a trillion dollars in bad deals."

---

Obama Received A $101,332 Bonus From AIG

AIG chiefs pressed to donate to Dodd
As Democrats prepared to take control of Congress after the 2006 elections,
a top boss at the insurance giant American International Group Inc. told colleagues that Sen. Christopher J. Dodd
was seeking re-election donations and he implored company executives and their spouses to give.
The message in the Nov. 17, 2006, e-mail from Joseph Cassano, AIG Financial Products chief executive, was unmistakable:
Mr. Dodd was "next in line" to be chairman of the Senate Banking, Housing and Urban Affairs Committee, which oversees the insurance industry,
and he would "have the opportunity to set the committee's agenda on issues critical to the financial services industry.

"There are two sets of rules.
One set for the rulers and another for the rest of us."

—Richard Yancey, former IRS tax collector

[livius]

This is being done to distract attention from the fact that the people Barry attacked did nothing criminal and in fact there was no suggestion that they had done anything criminal in their running of AIG, something that observers commented on at the time.

I certainly think this should be investigated, because fraud is a serious threat and sometimes a serious problem in all huge diversified financial companies; but it’s not the thing that brought down AIG. Barry’s just using this to cover his backside.

Sarbanes-Oxley, btw, is probably a contributing cause of fraud, because it made things so complicated that they became virtually impossible to really control. Even the law’s own authors weren’t clear about the meaning of some of its provisions. I bet you’d find that fraud actually rose within the years after SOX.

[sitetest]

My understanding is that much of what AIG did in derivatives wasn’t permitted under American regulation, and so the work was done out of their London office, because the Brits were willing to turn a blind eye.

[demshateGod]

Does anyone smell a scapegoat?

[Mojave]

Federal prosecutors and FBI agents are investigating Joseph Cassano, 54, who ran AIG's Financial Products Division, the U.S. network reported... Tax law specialist Jack Blum told ABC the deals worked by Cassano's division were "absolutely toxic and most of the people who were dealing in it knew how toxic it was."

But Jake DeSantis, the executive vice president of the American International Group’s financial products division, claims he didn't know a thing about it in his self serving letter spread around the web. So Jake is either a blatant liar or an incompetent of epic proportions.