Calif. Lawsuit Accuses AIG Of Inflating Bonuses

Associated Press
April 1, 2009

LOS ANGELES (AP) - A lawsuit filed in Los Angeles Superior Court accuses insurance giant American International Group Inc. of artificially inflating salaries and lying to lawmakers about the bonuses given to officers and employees.

The lawsuit filed Wednesday on behalf of an AIG shareholder names several Southern California-based executives of the company as defendants.

It says the company overpaid workers by basing salaries on falsely inflated revenue.

It also accuses the company of falsely claiming the payments were necessary to keep employees from leaving, although $57 million was set aside as retention pay to employees that AIG had already decided to fire.

The lawsuit, filed by retired California Judge John Bible, seeks unspecified damages.

An AIG spokeswoman had no comment.

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