Whistleblower Accuses AIG, Banks Of $137B Bailout Fraud

Law360, New York (May 5, 2011, 3:21 PM EDT) -- A California federal court unsealed a whistleblower suit Wednesday that alleges American International Group Inc. and several major banks defrauded taxpayers by lying to obtain more than $137 billion in bailout loans from the federal government, which they used to pay for failed trades in the collateralized debt market.

With help from Goldman Sachs Group Inc., Merrill Lynch International, Deutsche Bank AG and Societe Generale, AIG duped the Federal Reserve Bank of New York and the U.S. Department of the Treasury into issuing three multibillion-dollar loans...
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