Mr. Greenberg was sued in 2005 by Eliot Spitzer, then attorney general, for his alleged role in some of the insurer's accounting mistakes. One issue was a fraudulent reinsurance transaction that AIG entered into with Berkshire Hathaway Inc.'s General Reinsurance Corp.
Mr. Greenberg said at a March deposition that he didn't ask GenRe to enter into a fraudulent reinsurance transaction with AIG, according to documents filed in New York state court. He also said he didn't authorize anyone at AIG to enter into such a deal with GenRe, the court papers say.
Mr. Greenberg previously had declined to testify about the transaction in the attorney general's case because of a continuing investigation by Justice Department prosecutors, people familiar with the matter said. But the statute of limitations for bringing a federal criminal charge has expired, these people said.
Several former GenRe executives and a former AIG executive were convicted in 2008 on charges that in 2000 and 2001 they helped AIG improperly inflate its loss reserves, a key indicator of financial health, by $500 million. Federal prosecutors identified Mr. Greenberg as an unindicted co-conspirator, which means they believed he took part in the fraud scheme but didn't have enough evidence to charge and convict him.
A federal judge presiding over that criminal case said after the trial that prosecutors had presented "sufficient evidence" for a jury to conclude that the conspiracy started with a phone call by Mr. Greenberg to a GenRe executive, before the transaction was structured.
Mr. Greenberg, 84 years old, publicly maintained his innocence and was never criminally charged. Last year, he agreed to pay $15 million to the Securities and Exchange Commission to settle a civil -securities violation allegation arising from the GenRe transaction and other accounting issues from his time at AIG. He didn't admit to wrongdoing. He has also denied wrongdoing in the attorney general's case.
The "public should ask why the Attorney General is continuing to waste substantial sums of government money pursuing discredited allegations against Mr. Greenberg," said Lee Wolosky, his lawyer, in a statement Monday.
The attorney general's office, in a court filing on Friday, cited the federal judge's post-trial comment and evidence from the federal trial in an attempt to buttress its civil case.
On Monday, a spokesman for the attorney general declined to comment.
Another defendant in the lawsuit, Howard Smith, chief financial officer of AIG at the time of the GenRe transaction, made similar statements in a March deposition, according to documents filed Monday by his lawyers. Mr. Smith currently works with Mr. Greenberg at closely held C.V. Starr & Co., an insurance firm. He also has denied wrongdoing in the case.
The parties are expected to make oral arguments before a court ruling is issued.