At an age where most people of his age are thinking about moving to a nursing home, former AIG CEO Maurice “Hank” Greenberg is embroiled in a $US20 billion ($22 billion) fraud case, and he probably couldn’t be happier.

The combative Mr Greenberg, who in 38 years built AIG into the world’s largest insurer and sixth-largest company, is facing allegations of misusing subsidiary company Starr International. He and six other former executives took over the company when they were ousted from AIG in March 2005 in the midst of the Spitzer inquiry.

Over 30 years Starr International built up a 9.7% shareholding in AIG through a series of deals related to management incentives and the need to hold stock in reserve to block takeover bids. The company’s AIG shares are now worth $US20 billion, making Starr International AIG’s largest shareholder.

In a lawsuit filed in New York on March 28, AIG says Mr Greenberg – who will celebrate his 83rd birthday on May 4 – has a fiduciary duty to use the shares acquired by Starr International for the benefit of AIG. But Mr Greenberg insists there is no agreement to stop him running Starr International as he sees fit.

AIG says Starr International is being used as a venture capital and private equity firm. It recently invested in a Chinese private equity venture and is also buying real estate in Russia.   

On March 15, 2005 AIG’s board forced Mr Greenberg to resign as Chairman and CEO of AIG as New York Attorney-General Eliot Spitzer closed in on the company over financial reinsurance deals that inflated its financial returns.

While criminal charges filed against Mr Greenberg and others were later dropped, the New York Attorney-General’s office is still pursuing a civil case against Mr Greenberg on many of the same charges.

He has always maintained his innocence, and has accused Eliot Spitzer of conducting a high-profile witch-hunt in the interests of furthering his political ambitions. (Mr Spitzer resigned last month as Governor of New York after becoming embroiled in a prostitution scandal.)

While Mr Greenberg fights on, his power as a leading business figure in the US is waning. The man who once counted people like Henry Kissinger as friends and reputedly had a direct line to the White House no longer reigns over the New York business scene.

His sons once held senior positions in AIG but left long before scandal struck. Eldest son Jeffrey was forced out as Chairman and CEO of Marsh & McLennan in the Spitzer blitz, while Evan is now the President and CEO of Bermuda-based Ace Insurance.