Former AIG CEO Maurice Greenberg may struggle in his bid to have a civil suit dismissed after the presiding judge outlined the prosecution’s “devastating” case against him.

New York State Supreme Court Justice Charles Ramos did not rule either way last week on a bid by Mr Greenberg to dismiss the civil charges, but suggested the office of the New York Attorney-General has strong reason to pursue the matter.

The prosecution had “put together a devastating case, a strong case, and we both know it,” Mr Ramos told David Boies, counsel for Mr Greenberg.

New York state prosecutors are pursuing Mr Greenberg and former AIG CFO Howard Smith over a case that dates back to charges laid in 2005 by former Attorney-General Eliot Spitzer.

It’s alleged Mr Greenberg and Mr Smith had central roles in a sham reinsurance deal that improperly boosted AIG loss reserves by up to $US500 million ($536 million).

Current New York Attorney-General Andrew Cuomo continues to vigorously pursue the matter, while Mr Greenberg claims he never authorised the sham transaction.

Last week Mr Ramos indicated that evidence of discussions between the former AIG CEO and former Gen Re CEO Ronald Ferguson may prove crucial to the case.

The conversations are alleged to have sealed the sham transaction undertaken between AIG and Gen Re in 2000, which led to the conviction of five former executives in 2008.

In 2006, AIG agreed to pay more than $US1.6 billion ($1.7 billion) to settle accounting fraud charges laid by the Attorney-General’s office and the Securities Exchange Commission.

Mr Ramos says it could be some time before an outcome is reached.