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Understanding the Defendants’ Takeover of AIG. In support of Plaintiff’s Motion to Compel Defendant Geithner’s Deposition Testimony. © Law Offices of David Yerushalmi, P.C. All rights reserved. $40 billion TARP credited to AIG. Absolute FED Control: § 1.03 Trust Agreement.

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understanding the defendants takeover of aig

Understanding the Defendants’ Takeover of AIG

In support of Plaintiff’s Motion to Compel Defendant Geithner’s Deposition Testimony

© Law Offices of David Yerushalmi, P.C. All rights reserved.

slide2

$40 billion TARP credited to AIG

Absolute FED Control: § 1.03 Trust Agreement

Fiduciary Duty to U.S. tax payers!

Fiduciary Duty to a bank account?

Trustee A Trustee B Trustee C

AIG Credit Facility Trust

AIG $$ Principal + Interest Payments

Transfer of Beneficial Interest in 77.9% of AIG Equity + Voting

Federal Reserve Bank

of New York

(President Geithner)

U.S. Department of the Treasury (Sec. Geithner)

FED

§ 13(3) Fed. Res. Act

(Rule 30(b)(6) Deponent)

The FED calls upon the “unusual and exigent circumstances” of FRA to permit non-member bank AIG to borrow FED funds from FRBNY

But the Fed and the FRBNY wanted more than a debt deal; they wanted absolute control over AIG and needed to come up with a way to take almost 80% of AIG’s equity and voting rights. So they decided to use $40 BN of the Credit Facility as “Placeholder” funds to accomplish through the artifice of the AIG Trust what they could not do legally. . .

U.S. Treasury

Collateral:

≈100% of AIG Assets via

Stock Pledges/Liens

$85 BN Debt

Credit Facility

And this leaves the final tranche of the disguised “Placeholder” structure where the “US. Tax Payer”, at the hands of the Treasury Dept., sends $40 BN to the FRBNY as a credit to AIG, which is in reality “payment” for the 77.9% of AIG received through the Credit Facility and Trust structure.

While it made no sense to “fix” AIG’s debt-driven crisis by giving it $85 BN of more debt, the Credit Facility up to this part of the structure was typical and made at least structural sense.

Transfer of Legal Interest in 77.9% of AIG Equity + Voting

And that is why the Treasury Department’s deponent testified that the real beneficiary is the Treasury Department and why everyone agrees that the ultimate beneficiary is the U.S. tax payer.

Geithner, FRBNY, Fed, and Treasury Dept: “The FRBNY created a truly independent Trust with non-governmental Trustees to take legal title to 77.9% of AIG’s shares to avoid illegalities and any conflicts-of-interest.”

A second problem with the Trust:

Q: Was it proper for the FRBNY to name a bank account—the U.S. Treasury—as a beneficiary when it cannot own anything?

A: No; the Trust is invalid on its face!

But how is the Trust and its Trustees “independent” of the U.S. Government when § 1.03 of the Trust Agreement gives the Fed absolute and unfettered control over the Trust’s existence and its terms???

HOW THE U.S. GOVERNMENT TOOK OVER AIG--SUPPORTING AND FUNDING ITS SHARIAH-C0MPLIANT INSURANCE BUSINESS--THROUGH WHAT IS ARGUABLY AN ILLEGAL ARTIFICE

Geithner runs to the FED

AIG in crisis runs to Geithner at FRBNY

Debt-driven credit rating downgrade

Credit Rating Agencies

AIG

$$$

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slide3

Federal Reserve Bank

of New York

(President Geithner)

U.S. Department of the Treasury

$40 billion TARP credited to AIG

FED

Transfer of 77.9% Interest in AIG Equity + Voting

§ 13(3) Fed. Res. Act

$40 billion TARP paid to FRBNY but credited to AIG

Now we eliminate the $40 BN “Placeholder” funds provided by the FRBNY Credit Facility and the bottom line deal with the true flow of the real deal’s “consideration” comes into plain view . . .

$40 BN Portion of Debt Credit

Facility

And now we’ll see the same illegal Placeholder transaction but without the artifice of the “independent” Trust . . .

Debt-driven credit rating downgrade

Credit Rating Agencies

AIG

$$$

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understanding the defendants takeover of aig1

Understanding the Defendants’ Takeover of AIG

Under § 1956(c)(7)(D), “specified unlawful activity” is defined as a violation of § 1005.

§ 1956. Laundering of monetary instruments

(3) Whoever, with the intent—

(A) to promote the carrying on of specified unlawful activity;

(B) to conceal or disguise the nature, location, source, ownership, or control of property believed to be the proceeds of specified unlawful activity; or

(C) to avoid a transaction reporting requirement under State or Federal law,

conducts or attempts to conduct a financial transaction involving property represented to be the proceeds of specified unlawful activity, or property used to conduct or facilitate specified unlawful activity, shall be fined under this title or imprisoned for not more than 20 years, or both. For purposes of this paragraph and paragraph (2), the term “represented” means any representation made by a law enforcement officer or by another person at the direction of, or with the approval of, a Federal official authorized to investigate or prosecute violations of this section.

© Law Offices of David Yerushalmi, P.C. All rights reserved.

understanding the defendants takeover of aig2

Understanding the Defendants’ Takeover of AIG

This “any other company” is AIG, which was forced by the FRBNY and the FED to give up 80% of its equity/voting rights when it was illegal for the FRBNY to even hold equity.

§ 1005. Bank entries, reports and transactions

Whoever makes any false entry in any book, report, or statement of such bank [FED member bank], company, branch, agency, or organization with intent to injure or defraud such bank, company, branch, agency, or organization, or any other company, body politic or corporate, or any individual person, or to deceive any officer of such bank, company, branch, agency, or organization, or the Comptroller of the Currency, or the Federal Deposit Insurance Corporation, or any agent or examiner appointed to examine the affairs of such bank, company, branch, agency, or organization, or the Board of Governors of the Federal Reserve System;

© Law Offices of David Yerushalmi, P.C. All rights reserved.

understanding the defendants takeover of aig3

Understanding the Defendants’ Takeover of AIG

§ 1956. Laundering of monetary instruments

(3) Whoever, with the intent—

(A) to promote the carrying on of specified unlawful activity;

(B) to conceal or disguise the nature, location, source, ownership, or control of property believed to be the proceeds of specified unlawful activity; or

(C) to avoid a transaction reporting requirement under State or Federal law,

conducts or attempts to conduct a financial transaction involving property represented to be the proceeds of specified unlawful activity, or property used to conduct or facilitate specified unlawful activity, shall be fined under this title or imprisoned for not more than 20 years, or both. For purposes of this paragraph and paragraph (2), the term “represented” means any representation made by a law enforcement officer or by another person at the direction of, or with the approval of, a Federal official authorized to investigate or prosecute violations of this section.

© Law Offices of David Yerushalmi, P.C. All rights reserved.

slide7

$40 billion TARP credited to AIG

Fiduciary Duty to U.S. tax payers!

Fiduciary Duty to a bank account?

Trustee A Trustee B Trustee C

AIG Credit Facility Trust

AIG $$ Principal + Interest Payments

Transfer of Beneficial Interest in 77.9% of AIG Equity + Voting

Federal Reserve Bank

of New York

(President Geithner)

U.S. Department of the Treasury (Sec. Geithner)

FED

§ 13(3) Fed. Res. Act

(Rule 30(b)(6) Deponent)

It is at this point, that this Placeholder artifice becomes a money laundering scheme in violation of Title 18 § 1956 of the federal criminal code. How? Because the FRBNY and the FED want absolute control of AIG (meaning its equity and voting rights), but neither they nor the Treas. Dept. have any legal authority, to do so. The taking of 77.9% of AIG is the “specified unlawful activity” and the Trust is the fraud to accomplish it.

The FED calls upon the “unusual and exigent circumstances” of FRA to permit non-member bank AIG to borrow FED funds from FRBNY

Absolute FED Control: § 1.03 Trust Agreement

U.S. Treasury

Collateral:

≈100% of AIG Assets via

Stock Pledges/Liens

The Credit Facility was also perfectly legal, albeit stupid. Giving debt to a company drowning in debt simply makes no sense unless it was a necessary step to accomplish that which the FED could not accomplish directly.

$85 BN Debt

Credit Facility

This emergency action was perfectly legal and understandable.

Transfer of Legal Interest in 77.9% of AIG Equity + Voting

Geithner runs to the FED

AIG in crisis runs to Geithner at FRBNY

Debt-driven credit rating downgrade

Credit Rating Agencies

AIG

$$$

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